20 KPIs every product manager needs to track

When you release a new product, you hope it will perform well and delight your customers. But, as the marketplace becomes increasingly competitive, hoping for the best or only tracking one or two metrics isn’t usually enough.

Tracking key performance indicators (KPIs) is key to building products that thrive and meet customer expectations. It helps you make the best decisions based on reliable data and insights, not guesswork and assumptions.

So, what are the key KPIs that product managers should focus on? Let’s take a look.

Product management KPIs are metrics that help product managers understand how a product is performing in relation to specific goals and the wider marketplace. They are quantifiable measurements that can help track progress and product performance trends.

As a product manager, you might measure metrics like a website’s monthly visitors, customer churn rate, customer loyalty and satisfaction, user engagement, company market share, product release velocity, and more.

All of these KPIs help build a picture of a product’s success that product managers can use to make data-driven decisions, ensuring they meet customer needs alongside the organization’s objectives.

Before deciding which product KPIs to track, you need to understand the differences between a few interrelated terms:

• KPIs: key performance indicators are quantifiable measurements used to track product success. They are also related to specific goals and help measure progress toward achieving those goals. KPIs are helpful in other contexts beyond product management to track employee performance, business success, and project progress.

• Metrics: these are data points that help identify success, progress, and performance in any given area.

• Objectives and key results (OKRs): OKRs are a methodology for setting goals, boosting performance, and driving organizational change. They operate within a framework that includes a defined goal (or goals) and key results to achieve that goal.

As a product manager, you’ll need to manage the design, development, and release of products. Beyond that, you should deeply understand how they perform post-launch and where you can make key improvements.

These product KPIs can help ensure you release products that will thrive in the marketplace now and in the future, meeting your organization’s objectives:

Business performance KPIs

If you have thousands of customers, you might assume that your business is performing well. However, without measuring progress, there’s no way of knowing precisely how you’re tracking or whether you’re achieving organizational goals.

Product managers (alongside other key roles within the organization) should pay attention to overall business KPIs to ensure product development is helping the business succeed.

1. Monthly recurring revenue

Measure total revenue generated from product sales and subscriptions to gain an accurate understanding of the revenue stream.

Setting specific goals around revenue is helpful as it enables you to measure KPIs against actual performance.

Example KPI: increase product sales by 5% in the next six months.

2. Percentage of revenue from new products

Gaining insights into your overall organizational revenue is important, but it’s also essential to understand how new products are performing. This can help teams determine whether the new products align with the KPIs as hoped or whether they need to make new decisions about products and new releases.

Example KPI: increase revenue from new products by 3.5%.

3. Average revenue per user

You don’t necessarily need to focus exclusively on increasing your customer base to stay competitive. Another tactic is increasing the value of the customers you already have.

Calculating the average revenue generated per user can help your team understand users’ value and make data-driven decisions to increase those figures over time.

Example KPI: increase average monthly revenue by $5 per user in the next 12 months.

4. Net promoter score (NPS)

The NPS can help teams understand their customers’ loyalty (or lack thereof). It’s a question, or series of questions, that asks participants to tell you how likely they are to recommend your product or service to someone they know.

The final score can offer insight into how customers react to your products and services.

Example KPI: improve the NPS score by 4% within six months.

Customer and user engagement KPIs

For product managers, clearly understanding customer metrics is essential to make informed decisions about products.

Everything links back to the customer. People won’t buy and use your products if they are challenging to use, don’t solve real-world problems, or don’t fit their personal preferences.

5. Conversion rate

The conversion rate KPI measures the percentage of users who take a desired action within your product offer or marketing materials. For example, this might be a click, download, or sign-up.

KPIs linked to conversion rate will help your team understand what’s working well and where improvements can be made to encourage more users to take key actions.

Example KPI: increase the percentage of customers who have downloaded the app to 60%.

6. Customer lifetime value

Customer lifetime value (CLTV, or LTV) is a KPI that tracks an estimate of the revenue an organization can expect from a single customer over time.

Measuring the CLTV can ensure your team makes informed, data-led decisions about retention, profitability, and customer loyalty.

Example KPI: improve the CLTV by 5% over the next 12 months.

7. Daily/monthly active user count

The daily active user and monthly user counts relate to the number of users who interact with a product or service. This can help indicate how active and engaged your users are and whether they’re finding your products useful.

Tracking and working to improve these KPIs can help boost engagement, loyalty, and retention, as you’ll likely end up offering your customers more value.

Example KPI: increase the number of daily active users by 3%.

8. Session duration

Session duration relates to the time a user spends interacting with your product. Depending on your goals (and the customer’s goals), you might wish to increase or decrease the time the user spends using the product.

If your organization relies on advertising, your team should look to maximize session duration. But, if your organization is looking to streamline the service and make jobs simpler to perform, you might be focused on efficiency and reducing session duration.

Example KPI: decrease session duration by 5% for a specific set of tasks.

9. Number of user actions per session

A user’s actions while active within your product are also key indicators of their engagement. Tracking these metrics allows you to understand user engagement levels and the actions they take while using your product.

KPIs related to user actions could include tracking clicks, heatmaps, specific actions, and feature usage.

Example KPI: increase average user actions within a session by 5%.

Product development KPIs

For product managers, the process of developing products and bringing them to market is critical.

The time it takes to release a product, the speed at which your team can work, and how quickly users adopt new features are all factors to track and optimize.

10. Time to market

In product development, time to market is the length of time it takes for a product idea to be designed, developed, and released. The longer a product takes to get to market, the more it’s likely to cost. As a result, reducing the time to market can increase the chances of working within the allotted timings and budget, which is essential for the overall bottom line.

Example KPI: reduce the average time to market for product launches by five days.

11. Feature adoption

When you launch a new feature, you want your users to love it. But it doesn’t matter how well-made a feature is. It needs to solve a real problem for customers.

Understanding whether your features are helping your user and meeting their expectations is essential to measuring product success and improving your offering over time.

Example KPI: increase new feature adoptions by 15%.

12. Team velocity

Regardless of whether you’re using the agile methodology, a waterfall approach, or a product management method designed specifically for your team, it’s important to understand how efficiently your team is working and completing tasks.

Your team’s velocity impacts both customers and the organization as a whole, so measuring and optimizing this KPI are essential.

Example KPI: increase sprint efficiency by one day on average.

Product usage KPIs

How readily your customers adopt your products and whether or not they stick around are key metrics every product manager needs to stay aware of.

Customer churn, drop-offs, and high acquisition costs all have a big impact on the bottom line, so you’ll need to track and streamline them.

13. Trial drop-off rate

If you offer potential customers a trial for free or a reduced fee, it’s important to measure how many of those users become customers and how many drop off after the trial stage. 

These metrics can offer insights into your trial’s usefulness, cost, and relevance, helping you improve conversion rates over time.

Example KPI: to reduce trial cancellations by 7%.

14. Customer acquisition cost

Onboarding customers isn’t a matter of luck. You need to attract new customers to your organization and products, and that happens through various channels—marketing, sales, and referrals. All of these actions cost money.

To boost revenue and improve your bottom line, don’t overlook the importance of reducing your customer acquisition cost (CAC). This means attracting new customers in a cheaper way, bolstering your profit.

Example KPI: reduce the cost of acquiring new customers by 10% within the next six months.

15. User churn rate

If users are adopting your product and then dropping off shortly after, it’s essential to know about it and figure out why.

Retention rates impact the bottom line, so they play a key role in the success of your products.

Example KPI: decrease churn rate by 12%.

Product quality KPIs

Releasing products quickly is all well and good, but they won’t satisfy customers if they have bugs and other issues.

Staying on top of product quality and improving it gradually is key to building customer trust and loyalty.

16. Defect density

Bugs and issues in products cause plenty of friction and frustration for users. A user might quit their session, leave a negative review, or turn their back on your organization altogether. 

The quantity of defects in a product is a metric all project managers should track. With this information, they should put measures in place to minimize defects and assess the efficacy of these measures over time.

Example KPI: reduce the number of app defects by 20% for all launches.

17. Testing and velocity

Thoroughly testing products and features before they go out into the world is essential, as is the velocity at which your team can do this. It helps reduce the overall testing costs and keeps your customers happy.

Example KPI: boost app testing velocity by 5%.

18. Defect detection effectiveness

Does your product have an issue? Act now before customers notice and get frustrated.

Detecting issues and dealing with them quickly can encourage your customers to rely on you and your products.

Example KPI: improve defect-detection systems to reduce customer complaints by 16%.

19. Support ticket escalations

When your customers have a concern or complaint, you’ll want to resolve it as quickly as possible. However, not all concerns and complaints have the same degree of priority. An issue with the payment system, for example, will take precedence over a small bug on a click-through link.

Prioritizing the right tasks can help your team stay efficient and resolve the most important issues first.

Example KPI: resolve “severity level one” issues within 24 hours.

20. Compliance standards

Aligning with compliance standards, such as those linked to accessibility, will ensure your products fit a market need. This can also ensure that your products are inclusive and meet and exceed customer expectations.

Example KPI: ensure all new products and features align with accessibility standards.

The right KPIs for you to track will depend on your product strategy and overall business goals. This will vary between teams and organizations.

Following the steps below can help you choose the most relevant KPIs for your products:

Set business goals and objectives

Consider your key business goals—whether they include boosting overall revenue, attracting new customers, or building a strong brand reputation—and align the KPIs with those goals.

Every objective should align with KPIs that will help you track progress—otherwise, you won’t know whether you have been successful. This will increase motivation and accountability within your team.

Consider the key metrics

Not all KPIs speak to the success of your product or strategy. Some teams, for example, might measure what are known as vanity metrics—metrics that might make things sound successful but don’t necessarily tell your team what needs to improve.

Bear in mind that anything you measure should offer actionable insights that will have a measurable impact on your business and products.

Make KPIs measurable

All the KPIs you track should be measurable. You should be able to review and track them over time to see how you are progressing toward your goals.

You can use SMART goal-setting to help you. SMART goals are specific, measurable, achievable, relevant, and time-based.

Choose a relevant mix

Choosing KPIs that all relate to the same areas may mean your metrics aren’t broad enough. In this case, you’re at risk of missing key insights that could unlock big progress.

It’s best to choose a varied mix of KPIs to ensure you have the essential data and insights you need for success.

Check and revise KPIs over time

Your KPIs will change over time alongside the changes your team and organization undergo. Not all the KPIs you track will stay relevant, so check in on them and regularly revise them to ensure they’re current, useful, and relevant today.

If your team doesn’t track KPIs effectively, your efforts may be futile. Don’t rely on guesswork. Use hard data to track product management KPIs instead.

Fortunately, with advanced technology, there are many ways to streamline, simplify, and automate the process.

• Use analytics tools: analytics tools can provide detailed information about users, session times, drop-offs, and more, allowing you to gain insights into how your products are performing.

• Use real-time dashboards: live dashboards can help you stay abreast of what’s happening right now, ensuring your efforts are always aligned with the latest numbers.

• Product management tools: with advanced tools, there’s no need to lose documents or miscommunicate with team members. Product management tools can help keep you and your team up-to-date and informed.

• House data in one secure platform: use an all-in-one platform to store data easily and securely. An all-in-one data platform like Dovetail enhances efficiency, accuracy, and collaboration by consolidating data management and analytics. It functions as a single source of truth where data can be gathered, stored, and analyzed in a streamlined way.

You may come across some challenges when measuring product management KPIs. It’s helpful to be aware of these potential difficulties so that you’re ready to resolve them.

• Data quality: poor data can prevent you from measuring your KPIs effectively. To avoid this, use reliable data-gathering processes and stringent quality control.

• Information silos: if data isn’t housed in one platform, it can become disparate and disjointed. Using an all-in-one platform is essential to avoid this issue.

• Setting unhelpful KPIs: using KPIs that are inappropriate for your team or project can put emphasis on metrics that won’t impact your bottom line. Aligning KPIs with business goals can help avoid this.

• Data privacy: in this day and age, it’s more important than ever to manage data in highly secure ways. Using advanced platforms with built-in data security and implementing strong data security processes within your organization can make all the difference.

• Focusing on the short term: while it’s important to have short-term goals, it’s often the longer-term goals that matter more to a business. Keeping your KPIs too short-sighted can make you miss the bigger picture.

Product, customer, and overall business metrics are just some of the ways you can measure success as a product manager.

Here are some examples:

• Achievement of product-related goals

• Customer satisfaction, feedback, and loyalty

• Product success, including product adoption, usage, and engagement

• Product team efficiency

• Financial performance

Helpful KPIs for a B2B product manager are similar to those of a B2C product manager.

KPIs will usually relate to customer satisfaction and loyalty, product usage and engagement, financial performance, product team efficiency, and market success.