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Learning about metrics is important for product managers because it allows them to measure the performance and effectiveness of their products, and make data-driven decisions about how to improve them. Metrics can help product managers understand user engagement, product usage, and customer satisfaction, as well as identify potential issues and opportunities for growth. Additionally, having a good understanding of metrics can also help product managers communicate the value and impact of their products to stakeholders, such as investors and executives.
Following are metrics used by product managers for tracking acquisition, engagement, retention and monetisation:
Acquisition:
There are several different types of acquisition metrics that can be used to measure the success of a product or business. Here are a few examples:
Conversion rate: This metric measures the percentage of users who complete a desired action, such as making a purchase or signing up for a service. A high conversion rate is an indication that the product or service is appealing to users and that they are taking the desired action.
Customer acquisition cost (CAC): This metric measures the cost of acquiring a new customer, including marketing, sales, and other expenses. A low CAC is an indication that the business is effective at acquiring customers in a cost-effective manner.
Cost per acquisition (CPA): This metric measures the cost of acquiring a new customer or user, typically expressed as a cost per unit (e.g. cost per customer, cost per user). A low CPA is an indication that the business is able to acquire customers or users in a cost-effective manner.
Cost per lead (CPL): This metric measures the cost of generating a lead, such as a prospect who has expressed interest in the product or service. A low CPL is an indication that the business is effective at generating leads in a cost-effective manner.
Cost per click (CPC): This metric measures the cost of acquiring a user through paid advertising, such as Google Ads or social media ads. A low CPC is an indication that the business is able to acquire users through paid advertising in a cost-effective manner.
Click-through rate (CTR): This metric measures the percentage of users who click on an advertisement or link. A high CTR is an indication that the advertisement or link is engaging and relevant to users.
Organic traffic: This metric measures the number of users who visit a website or use a product through organic search results, as opposed to through paid advertising. A high level of organic traffic is an indication that the website or product is ranking well in search results and is attractive to users.
Engagement
Active users: This metric measures the number of users who actively use the product or service over a given period of time, such as daily, weekly, or monthly. A high number of active users is an indication that the product or service is valuable to users and that they are using it regularly.
User engagement: This metric measures how actively users are interacting with the product or service, such as through actions like clicking, scrolling, or sharing content. A high level of user engagement is an indication that the product or service is engaging and that users are actively interacting with it.
Session duration: This metric measures the average amount of time that a user spends using the product or service in a single session. A high session duration is an indication that the product or service is engaging and that users are spending a lot of time using it.
Time on site: This metric measures the average amount of time that a user spends on a website or using a product in a single session. A high time on site is an indication that the website or product is engaging and that users are spending a lot of time interacting with it.
Page views per session: This metric measures the average number of pages or screens that a user views within a website or product in a single session. A high number of page views per session is an indication that the website or product is engaging and that users are exploring it in depth.
Share of voice (SOV): This metric measures the percentage of total mentions or interactions that a brand or product receives within a given market or industry. A high SOV is an indication that the brand or product is well-known and that it is generating a lot of buzz and engagement.
Bounce rate: This metric measures the percentage of users who visit a website or use a product and then leave without taking any further action. A low bounce rate is an indication that the website or product is engaging and that users are taking desired actions, such as signing up for a service or making a purchase.
Social media engagement: This metric measures the number of likes, comments, shares, or other interactions that a brand or product receives on social media platforms. A high level of social media engagement is an indication that the brand or product is resonating with users and that they are actively interacting with it on social media.
Retention:
Retention metrics are used to measure the degree to which customers continue to use a product or service over time. Here are a few examples of retention metrics:
Retention rate: This metric measures the percentage of users who continue to use the product or service over a given period of time. A high retention rate is an indication that the product or service is valuable to users and that they are likely to continue using it.
Churn rate: This metric measures the percentage of users who stop using the product or service over a given period of time. A low churn rate is an indication that the product or service is valuable to users and that they are likely to continue using it.
Customer lifetime value (CLV): This metric measures the total value that a customer is expected to generate for the business over the course of their relationship with the product or service. A high CLV is an indication that the product or service is valuable to customers and that they are likely to continue using it over the long term.
Customer satisfaction (CSAT): This metric measures how satisfied customers are with the product or service. A high CSAT score is an indication that customers are satisfied with the product or service and that they are likely to continue using it.
Net promoter score (NPS): This metric measures how likely customers are to recommend the product or service to others. A high NPS is an indication that customers are highly satisfied with the product or service and are likely to promote it to others.
Customer loyalty: This metric measures the degree to which customers are committed to using the product or service over the long term. A high level of customer loyalty is an indication that the product or service is meeting the needs of users and that they are likely to continue using it over time.
Customer retention cost (CRC): This metric measures the total cost of retaining a customer over a given period of time. A low CRC is an indication that the product or service is efficient at retaining customers and that it is not costing a lot of resources to keep them using it.
Customer retention rate (CRR): This metric measures the percentage of customers who continue to use the product or service over a given period of time. A high CRR is an indication that the product or service is valuable to customers and that they are likely to continue using it.
Monetisation Metrics:
Monetisation metrics are used to measure the ability of a product or service to generate revenue. Here are a few examples of monetisation metrics:
Average revenue per user (ARPU): This metric measures the average amount of revenue generated per user over a given period of time. A high ARPU is an indication that the product or service is generating a lot of revenue from each user.
Lifetime value (LTV): This metric measures the total amount of revenue that a customer is expected to generate for the business over the course of their relationship with the product or service. A high LTV is an indication that the product or service is generating a lot of revenue from each customer over the long term.
Cost per acquisition (CPA): This metric measures the cost of acquiring a new customer. A low CPA is an indication that the product or service is efficient at acquiring new customers and that it is not costing a lot of resources to do so.
Return on investment (ROI): This metric measures the amount of profit generated from an investment, expressed as a percentage of the total cost of the investment. A high ROI is an indication that the product or service is generating a lot of profit relative to the resources invested in it.
Cost per customer (CPC): This metric measures the total cost of acquiring a new customer, including both direct and indirect costs. A low CPC is an indication that the product or service is efficient at acquiring new customers and that it is not costing a lot of resources to do so.
Average order value (AOV): This metric measures the average amount of revenue generated per order. A high AOV is an indication that the product or service is generating a lot of revenue from each transaction.
Monetization rate: This metric measures the percentage of users who generate revenue for the business. A high monetization rate is an indication that the product or service is effective at generating revenue from a large percentage of its user base.
Revenue growth rate: This metric measures the rate at which revenue is increasing over time. A high revenue growth rate is an indication that the product or service is effectively increasing its revenue over time.