17 Product Management KPIs and Metrics You Need to Know

Looking for the key product management KPIs and metrics to measure your product’s performance?

As a product manager, you will have to know your product health—if there are any issues concerning your product, how your team works on it, and a lot more.

However, you have a lot of data to assess so that you can improve your product and make it more desirable. To make sense of the numbers, you can use certain metrics that measure the product’s performance.

That’s why finding the right Product Management KPIs and metrics is pivotal to having a successful product strategy in place.

Measuring the KPIs will help you understand if you are on the right track when it comes to reaching your business goals and seeing if your product strategy is working.

In this article, you’ll read about

• What are product KPIs?
• 17 product management metrics to track (with formulas)
• How to choose the right product management KPIs

What Are Product Management KPIs and Metrics?

Product Management KPIs, or Key Performance Indicators, are measurable metrics that product management teams, marketers, and company CEOs use to assess the success and effectiveness of their products.

These indicators help product managers track and evaluate the performance of their products, make data-driven decisions, and align their efforts with the overall business goals.

Remember that the product management metrics that you choose should align with your business goals – getting more leads, increasing website performance, getting inputs for new features, and so on. But, in the process of measuring and tracking the kpis, you may get lost in the numbers. So, instead of trying to measure everything, just focus on things that matter the most to the stage your company is at.

There are different types of product management KPIs and metrics. The types can vary based on the product’s stage, industry, company goals, and other factors. However, we are categorizing them into four broad types:

User Engagement and Experience KPIs – These KPIs focus on how users interact with the product and their overall experience. They provide insights into the product’s usability, user satisfaction, and areas of potential improvement.

• Net Promoter Score (NPS)
• Customer Satisfaction Score (CSAT)
• Retention Rate
• Churn Rate
• User Engagement & Retention
• Bounce Rate

Revenue and Monetization KPIs – These metrics are tied directly to the financial performance of the product. They help product managers understand the product’s contribution to the company’s bottom line.

• Monthly Recurring Revenue (MRR)
• Average Revenue Per User (ARPU)
• Customer Lifetime Value
• Number of Customers Acquired
• Customer Acquisition Cost

Market and Acquisition KPIs – These metrics focus on the product’s market presence, its reach, and how effectively it acquires new users or customers.

• Organic Traffic vs Paid Traffic
• Number of Active Users
• Customer Conversion Rate

Innovation and Growth Metrics – These metrics evaluate the product’s capacity for innovation and its potential or actual growth. They help in understanding how the product evolves over time and its future prospects.

• Time to Market
• Feature Adoption
• Quality Metrics

17 Product Management KPIs And Metrics To Track (With Formulas)

Here are 17 of the best product management KPIs that you need to know:

1. Net Promoter Score (NPS)
2. Customer Satisfaction Score (CSAT)
3. Retention Rate
4. Churn Rate
5. User Engagement & Retention
6. Bounce Rate
7. Monthly Recurring Revenue (MRR)
8. Average Revenue Per User (ARPU)
9. Customer Lifetime Value (CLTV)
10. Number of Customers Acquired
11. Customer Acquisition Cost (CAC)
12. Organic vs Paid Traffic
13. Number of Active Users
14. Customer Conversion Rate
15. Time to Market
16. Feature Adoption
17. Quality Metrics

User Engagement and Experience KPIs

1. Net Promoter Score (NPS)

This is one of the key product KPIs to measure customer satisfaction and loyalty. It asks the customers a simple question.

1. Customers who give a rating between 0 and 6 are considered detractors, and they are most likely to churn.
2. Customers who give a rating of 7 or 8 are most likely to jump ship when they see a better product. They will stay with you for now since the product meets their minimum expectations, but they are not extremely excited about it.
3. The ones who will stay true to you are customers who give you a rating of 9 or 10. They are called promoters or advocates and they will be the ones singing paeans about your brand.

You can’t exactly pinpoint what is a good NPS score because there is no right NPS number. It varies depending upon the industry. An electronics company might have a relatively higher NPS value than a company in the telecommunications industry.

There are companies that have NPS value in the negative too. If you have a negative NPS score, it means that you have more customers who hate your brand and will move to a competitor soon.

Ensure that everyone in the organization knows about NPS and your score. Motivate them enough to make them take steps that will help improve the NPS score. When NPS awareness spreads throughout the organization, employees become motivated to provide more value, boost office morale, and proactively address detractors.

You can sign up to try our NPS survey software for free. 

Actionable Insights

• If NPS is low or declining, gather feedback to understand customer pain points and work on improving the product or service.
• If NPS is high, identify what you’re doing right and ensure you maintain those standards. Consider leveraging positive feedback in marketing campaigns.

2. Customer Satisfaction Score (CSAT)

CSAT is a product management KPI that measures the satisfaction of a specific product or service. While NPS measures the overall satisfaction, CSAT measures the satisfaction level of just one feature or service.

CSAT is measured through a customer satisfaction survey. In this type of survey, customers are asked to provide their satisfaction levels with a specific product/service on a Likert scale. The scale could be from 1-3, 1-5 or 1-10. Then the scores are totaled and divided by the number of respondents.

Use CSAT at regular intervals so that you can always get to know from the customer how they like using a particular feature. Ensure that you work on their complaints based on the feedback so that you will give them enough reasons to renew the product.

Actionable Insights

• If CSAT is low, delve deeper into customer feedback and address common complaints.
• If CSAT is high, maintain the good work and consider showcasing positive reviews.

3. Retention Rate

It is the percentage of customers who continue doing business with you after a certain time period. Using this KPI in product management, you can measure how long you will be able to retain your customers. And if there is a decline in the number of customers leaving, you need to find out if there are measures taken regularly to retain customers.

Without a retention strategy in place, it is normal for businesses to only spend time on acquiring new customers while completely ignoring the existing ones.

Another method that you can use to increase the retention rate is to talk to your previous customers and ask them why they decided to leave you.

Always remember that getting new customers is much more difficult than keeping your existing customers happy. Your old customers tend to spend more on you versus new customers.

Actionable Insights

• If retention is low, identify pain points and address them.
• Consider focusing more on loyalty programs or engagement campaigns.

More on Customer Retention – All You Need To Know About Customer Retention – The Ultimate Guide

4. Churn Rate

Retention rate and churn rate are the opposite of each other. While retention rate measures the percentage of customers who chose to stay with you, churn rate measures the percentage of customers you have lost.

In fact, there are two types of churn rates:

1. Customer churn: The number of users who have canceled their subscription or stopped working with you.
2. Revenue churn: the amount of revenue that the business has lost because of customer churn.

While we would advise you to concentrate on revenue churn rather than customer churn, the latter is also important because it can tell you a lot about customer satisfaction.

Actionable Insights

• If churn is high, conduct exit interviews or surveys to understand why customers are leaving.
• Address any product or service deficiencies causing churn.

5. User Engagement & Retention

These KPIs measure how actively (and how long) users interact with your product.

For example, engagement metrics like these can help you understand user behavior and product stickiness:

• Daily active users (DAU)
• Monthly active users (MAU)
• User session duration
• Number of user actions per session 

Moreover, product KPIs like these provide valuable insights for product managers into:

1. How users interact with your product
2. Whether they find value in it
3. The level of user interest
4. Areas for improvement
5. Strategies to fix them

Actionable Insights

• If engagement is low, introduce features or content to increase user interaction.
• Consider push notifications or email campaigns to re-engage users.

6. Bounce Rate

Bounce rate is a metric that quantifies the percentage of users who visit a website, but leave after viewing only one page or spending a short amount of time.

By analyzing the bounce rate, you can identify ways to optimize the product so that the visitor will explore more pages and go deeper into the funnel.

By addressing the factors that contribute to a high bounce rate, product managers can:

• Improve the overall user experience.
• Increase user engagement.
• Drive better conversion rates.

Actionable Insights

• If the bounce rate is high, assess the user experience on landing pages.
• Consider A/B testing to identify better page layouts or content.

Revenue and Monetization KPIs

1. Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) is a product metric that quantifies the total revenue generated by a product within a month.

To calculate MRR, you need to:

1. Consider the starting MRR
2. Add revenue from new customers
3. Subtract the revenue lost due to customer churn

This measurement is particularly applicable to subscription-based businesses like SaaS. SaaS companies can still have additional revenue streams – such as upselling customers to higher-tier plans, offering add-ons or extra services, or even one-time purchases. The key distinction is that MRR focuses specifically on the recurring revenue component of the business model.

Actionable Insights

• If MRR is declining, identify the causes (e.g., increased churn) and strategize on customer retention.
• If MRR is growing, identify successful strategies and amplify them.

2. Average Revenue Per User (ARPU)

Average Revenue Per User (ARPU) is a product management KPI that calculates the average revenue generated per user – either on a monthly or annual basis. ARPU is valuable when determining pricing strategies for new products or considering price adjustments for existing ones.

ARPU can be calculated separately for new users and existing users. How? ARPU for new users reflects the metrics after changes in subscription plans or product prices have been implemented. But for existing users, it includes the figures before the price change.

Understanding ARPU enables product managers to make informed decisions regarding pricing. You can use ARPU as a performance indicator if you want to:

• Know how you fare against your competitors.
• Consider various acquisition channels.
• See how you can segment your customers so that you can increase the price.

MRR and ARPU are great for monitoring the overall health of a company, especially for SaaS businesses.

Actionable Insights

• If ARPU is declining, consider upselling or cross-selling opportunities.
• Explore new features or services that users might be willing to pay for.

3. Customer Lifetime Value (CLTV)

Customer Lifetime Value estimates the total value a customer brings to your business over their lifetime. This product metric takes into account factors such as repeat purchases, upselling, and referrals.

Why is this important? By analyzing CLTV, product managers can:

1. Gain insights into the long-term profitability of their customer base.
2. Identify strategies to maximize customer value.
3. Prioritize efforts to target high-value customers.
4. Find flaws in your product pricing.
5. Help develop personalized marketing and upselling campaigns.
6. Measure how much you can spend on acquiring a customer.
7. Select the best customer acquisition channels and retention strategies.

For example, if the CLTV of a customer is $1000, then spending $20 to acquire one is worth the investment. Just knowing these numbers helps you make smart business decisions, especially for marketing and product pricing.

Actionable Insights

• If CLTV is decreasing, consider strategies to increase the average lifespan of your customers, such as loyalty programs.
• Aim for a higher CLTV to CAC ratio, indicating more value derived from customers compared to the cost of acquiring them.

4. Number of Customers Acquired

It is not a number that is just for your sales and marketing team. In fact, the number of customers acquired is an indicator of the success of your product.

If the number you forecast and the final acquisition number have a huge difference, then there has either been an over-estimation of your capabilities or the product hasn’t been that widely accepted yet.

This is where you find out areas where you can improve the product. Find out more about why your product failed and take immediate steps to rework the product so that there is more acceptance of it. This Product Feedback Survey is a great way to get that information.

Some of the product management KPIs to track under acquisition are:

• New customer acquisition rate over a specific period.
• Number of new users over a specific period.
• Percentage increase in user base over a specific period.

Actionable Insights

• If this number is stagnant or declining, reassess your marketing and outreach strategies.
• Analyze the most effective channels for acquisition and allocate more resources there.

5. Customer Acquisition Cost (CAC)

Every business needs to scale, and responsibly at that. You cannot fancy acquiring customers at $10 a pop while the cost of your product is just $1. That is economic suicide. Acquiring customers is a big cost associated with each business.

Customer Acquisition Cost is the estimated cost of getting one customer for your business. If you are thinking of running a business in the long run, then understanding the need to measure CAC is crucial.

CAC includes the money you spent on marketing, the sales team’s work, overheads, advertising, software used, etc. Monitoring CAC helps product managers assess the efficiency and profitability of customer acquisition strategies, enabling them to optimize resources and allocate budgets effectively.

Actionable Insights

• If CAC is high, review your marketing strategies for efficiency. Perhaps there’s wastage in ad spend.
• Look for organic growth strategies or more cost-effective channels.

Market and Acquisition KPIs

1. Organic vs Paid Traffic

Understanding where you get your traffic from can be an eye-opener as well. When you measure paid traffic, you will be able to know which are the channels that give you the most traction.

If you have a number of channels where you put up content so that you can get organic traffic, you will also be able to understand which works the best and which one doesn’t. Your marketing team will have a field day analyzing this metric.

Actionable Insights

• If paid traffic dominates, consider strategies to improve organic reach, such as SEO or content marketing.
• Ensure the ROI from paid traffic justifies the spend.

2. Number of Active Users

With good marketing efforts, you will be able to acquire a lot of new customers. But are you keeping them engaged? Your users being engaged on the site means that your product is meeting their expectations.

If you see that the engagement rate is low, then you need to find out from the user why there is no active participation. Send surveys to your customers as to where you are lacking and how you can improve their experience so that they will use more of your product.

When creating surveys to find out your NPS, CSAT, or CES score from your customers, employ the services of online survey tools like SurveySparrow for an intuitive survey.

Actionable Insights

• If active users are declining, re-engage dormant users with campaigns or new features.
• If the number is growing, understand what’s working and amplify those efforts.

3. Customer Conversion Rate

This measures the percentage of prospects who successfully convert into customers. Increasing the customer conversion rate can lead to significant revenue growth over time.

Conversion rates provide crucial insights into the success of lead nurturing and sales efforts. But it is also a key product KPI that helps product managers understand the impact of their customer acquisition strategies.

Actionable Insights

• If conversion rate is low, optimize the user journey and reduce friction points.
• Test different CTAs, page designs, or checkout processes.

Related Read – How to Turn More SaaS Leads into Customers with Product Qualified Leads

Innovation and Growth Metrics

1. Time to Market

This metric measures the time it takes to launch a new product or feature from conception to market availability.

Time to Market is a critical metric in product management as it covers all stages of the product development lifecycle – including ideation, design, development, testing, and launch.

By reducing time to market, product managers can gain a competitive advantage, respond to market demands more quickly, and capture opportunities before competitors. Efficient time to market requires:

• Cross-functional collaboration
• Streamlined processes
• The ability to prioritize features and functionalities based on customer needs

Actionable Insights

• If time to market is long, streamline the product development and release process.
• Prioritize features or products based on potential impact and feasibility.

2. Feature Adoption

This product KPI evaluates how well new product features or enhancements are received and adopted by users. It provides insights into the value and impact of the added functionalities.

Feature adoption can be measured through various metrics, including:

• The percentage of users who actively use the new feature.
• Frequency of feature usage.
• User feedback and ratings specific to the feature.

These metrics help identify which features are driving user engagement and satisfaction, as well as those that may require improvement or further promotion.

Actionable Insights

• If adoption for a new feature is low, consider user education through tutorials or guides.
• Reassess the feature’s value proposition.

3. Quality Metrics

These product metrics assess the reliability, stability, and overall quality of your product. There are 3 key metrics you need to track:

1. Defect density measures the number of defects per unit of code or functionality, indicating the overall quality of the product.
2. Customer-reported issues help capture real-world user experiences and identify specific pain points or bugs that need to be resolved.
3. Uptime percentage measures the availability and reliability of the product. This indicates how well it performs and meets user expectations.

By monitoring these metrics, product managers can proactively address any quality issues, prioritize bug fixes, and make informed decisions about the product’s performance and usability.

Actionable Insights

• If bug reports or quality complaints are high, prioritize fixes.
• Consider more rigorous QA processes or feedback loops with users

How to choose the right product management KPIs?

Choosing the right product management KPIs is crucial for understanding how your product is performing and where improvements are needed. The correct KPIs can provide insights into user behavior, product adoption, revenue generation, and overall product health. However, there are a few questions that you need to ask to find right kpis for you.

1. What are your business goals?

Without knowing what your business goals are, you cannot set your product management KPIs. If you are not sure what could be the KPIs that you could take into consideration, then here’s what you can do.

• Write down the features and benefits of the product for someone who is a customer. These are the product management KPIs that you can use.
• Ensure that your goals are measurable so that you can benchmark them for the next time you evaluate them.

2. What product metrics are vanity, and what are of value?

Not all product management metrics are important. Some of them are just for vanity as it doesn’t add any true value. For eg, the number of people who are using the app at a particular time is one of the product management KPIs that is just for vanity. There is not much you can do with this piece of data.

Instead of measuring the number of people using the app currently, you could instead measure the number of subscribers every hour. Just because you have the resources handy, do not measure everything. Some of the metrics are best left untouched.

3. What stage is your company at?

If you are a relatively new company, then you should care about metrics that validate the business model; with product management KPIs being customer reviews, awareness of the brand, stickiness, etc.

Established businesses can think about customer retention, increasing CLV, the number of customers acquired, cost per acquisition, and so on.

4. What are your lagging and leading performance indicators?

Lagging indicators measures events that have already happened- number of sales last month, number of new customers, customers served last month, etc. They are good for measuring results while leading indicators measures inputs, progress and the chances of achieving an output in the future.

For eg, conversion rates, sales volume, etc, are some of the leading product management KPIs. Knowing your leading indicators puts you in a position where you can predict the success of your organization.

5. What trends have you spotted lately?

When you have a variety of data at different time points at your disposal, you can leverage it to understand trends and predict the future. Check out revenue growth, customers accrued, and other important parameters over a time period, it will help you understand the scenario.

For example, if you see that there is a sharp decline in the number of renewals, it is an indication that there is no proper customer retention program in place. If there is a decline in revenue or an increase in costs without any major event happening, then you need to investigate it.

6. What are your indicators for the 3 Ps: Product, Process, and People?

Most businesses are guilty of tracking only financial indicators like revenue, profit, account value, and so on. Or something on the lines of customer satisfaction, referral rates, etc.

While these are important metrics that you should care about, we would suggest that you take a little offbeat route and concentrate on metrics that will tell you about your product and the changes that it might require. Indicators that talk about the motivation and morale of your team are also important.

Wrapping Up

Most of the product managers concentrate only on product features while completely ignoring many other metrics that need as much care, if not more. If you want to create a great product, not only are the features important, you should also be sure about what your customers want. Realizing that your customers wanted something else in the beta stage is not a favorable position to be in. The more you focus on your product, the higher your success rates.

Keep in mind that the product is not only about the benefits that it gives, but it is also about keeping the customers satisfied. To sum it up, the most important KPI in product management is the customer.

Using the above product management KPIs, you can be on top of the business’ performance, product quality, customer satisfaction, customer usage, and so on. This is the foundation of a well-oiled business machine. If you are just starting out, we would suggest you map out the most important metrics based on your goals and monitor them like a hawk. Keep improving the metrics every time you measure them.