There are some terms that are important for you once you enter the Product Management Field. Key performance metrics and product metrics provide managers with a benchmark of how the product is performing.

A product’s success or Product management success is measured and even improved based on these factors we are about to mention below.

They provide the product managers with the most crucial information, which is the Key to checking whether the Product is performing the best or not. 

If we define it in Layman's Terms, 
Metrics for a product are indicators of how customers engage with it. They are derived from measurements and frequently include a numerical component representing time, a ratio, a rate, etc. 

Key performance indicators, or KPIs, are a quantifiable way to track progress toward a certain objective. KPIs give teams goals to strive for, benchmarks to evaluate progress against and insights to help everyone in the business make better decisions.

It can even be helpful to convert the Potential Users into Current Users. Well, About the Product Metrics they help in recognizing features, and Checking Customer Interactions helps them to check the Difference Between Product Metrics and Key Performance Areas.

Growth Metrics

It’s all about boosting productivity and user base in a market that already exists for your product. Customer-oriented KPIs will demonstrate how your product development efforts translate into user interactions, albeit being less important to stakeholders. They answer the questions like:

How many people find your product and utilize it? 
How much time do they devote to using it in general or a specific function? 
How do users respond to a feature or action that has been strategically placed? 

These metrics also include information on users who abruptly ceased using a product (bounce rates).

This includes the following KPIs: 

Churn Rate: There are two types of Churn Rates, divided into the customers who canceled the subscription and the amount of revenue lost during a certain period of time.

Customer churn rate: Customers lost / Total customers

Traffic (Organic Reach): This is to look at what’s going on on the websites. It is used to check a general number of people who found and visited the website.

In contrast to paid traffic, which includes people who visit a website due to paid search, social media ads, or sponsored content, organic traffic measures the number of people who access a website using search engines.

Retention Metrics

These tell you whether a customer keeps getting back to the service and utilizing them. If your business has a high retention rate it is a Good Sign.

Metrics for retention aid in determining the effectiveness of your marketing and customer service initiatives. You can calculate how much it costs to bring in a new user if you know your customer acquisition cost.

Focusing on customer retention makes sense because existing customers are far more likely to explore new features, move to a better plan, or participate in a user research interview.

The percentage of customers who remained with the business after a specific amount of time is known as the customer retention rate (CRR). Your calculations can be based on the quantity of downloads or initial logins to the app.

Retention Rate = Customers at the end of the calculated period – New customers / Customers at the start of the calculated period x 100

CLTV (Customer Lifetime Value):

These metrics will allow you to check how much money users will generate in the long term. It helps display an average profit from one user before they cancel a subscription.

With relation to the potential profit from just one customer, the goal of this KPI is to demonstrate how much you can spend to acquire a new customer at an early stage. 

Average Revenue Per User (ARPU) * Average customer lifetime = CLTV

Engagement: data for user engagement assists businesses in tracking data including page views, session length, and user comments. 

Bounce Rate

The percentage of visitors that opened a website or app only to leave right away. This measure gives important information about how users behave while interacting with a company's digital content. If a business has a high bounce rate, it should look for strategies to hold users' interest for longer.

NPS:

This measures the number of loyal customers who are likely to recommend a product and the ones who hate it. In order to calculate NPS, Users can rate their product from 0 to 10. The ones who hate it will give it 0 to 6 and the ones who are going to promote it will give 7 to 8 points. 

NPS = % of promoters – % of detractors.

CSAT

It gauges a user's general satisfaction or dissatisfaction with a particular aspect of a product or service. User ratings are frequently requested on a scale of 1-3, 1-5, or 1-10. It is determined by adding up the results and dividing the result by the total number of respondents.

CSAT, as opposed to NPS, aims to gauge customer satisfaction with a specific function. Other metrics, such as the Customer Effort Score (CES), are used to gauge customer experience. You require a customer survey, similar to the CSAT, where respondents rate how simple it was to find the information they needed about a product.

Revenue Metrics

Revenue metrics in product management are quantifiable measures of how much money a product is generating. These metrics are used to track the performance of a product over time and to identify areas where improvement is needed.

Some of the most common revenue metrics in product management include

MRR (Monthly Recurring Revenue):

This metric is especially relevant to subscription-based industries like SaaS. SaaS businesses can still generate more money through upselling clients to higher-tier plans, providing new services or add-ons, or even through one-time payments. The main difference is that MRR concentrates only on the company model's recurring revenue element.

Average Revenue Per User (ARPU) is a key performance indicator (KPI) for product management that determines the average revenue produced per user on a monthly or annual basis. When deciding on pricing strategies for new items or taking into account price changes for existing ones, ARPU is useful.

Both new users and current users might have their own separate ARPU calculations. How? ARPU for new users reflects metrics following the implementation of price or subscription plan changes. not, for

CAC:

Every company needs to grow, and do so properly. You cannot imagine paying $10 for each new consumer when the price of your goods is only $1. Economic suicide would be that. Each business incurs significant expenses in order to acquire clients.

CAC covers the money you spent on advertising, overhead, the work of the sales staff, software used, and other expenses. Product managers can more effectively allocate resources and budgets by assessing the effectiveness and profitability of customer acquisition methods with the aid of CAC monitoring.

CAC Total expenses over a period of time/ Total number of customers generated over a period of time.

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