Metrics That Matter for Product Managers
As Product Managers, it is important for us to start thinking about the measures of success for each initiative upfront.
Every new initiative/feature is a hypothesis. You are betting that the solution would address that customer problem or would help us achieve a certain objective. Unless we have clear measures of success, we wouldn’t really be able to validate if our hypothesis was valid or not. Or if it was valid, we can look the measures of success to consider if we need to further improve it or not.
These key metrics help us define exactly what success should looks like, and this often gets our teams running in the same direction and brings a clarity on what matters most.
Let us assume we are managing a trading platform and when we want to define metrics to track, we should look at this as having three key components to it:
- North Star metric —This is the primary metric that will indicate the success of your product (example, 100 million increase in revenue or 30% improvement in profit margin)
- Objective — What are the outcomes that we are aiming to achieve (e.g., How can we improve the the adoption of the platform?’ (Example: driving 30% increase in new users)
- Key results — These would be the specific initiatives that would help us achieve the objective(e.g., 15% improvement in new sign ups through simplifying onboarding)
It is also important to also think about counter metrics when you define your key metrics to track. For example, there might be new users being added to the system and you are growing but are the new users being added of high value? So it might be useful to also track average trading size per user as well as a counter metric.
And once you define the metrics right, you would be able to get the feedback through data really well. And you could tie the feedback to your product decisions and work towards the objectives with greater focus.
