We’d like to start this article with a simple fact because everything you’re about to read here rests on it: when it comes to building better products and staying ahead in the market, data is everything. Let us explain.
Data is what offers insights into market dynamics, conversion rates, and user engagement. Without it, you cannot objectively tell how good your product is, how it fares with your customers or audience, and how you could potentially improve it in order to deliver better value than your competition. In short, without quantifiable data, you cannot know whether you and your team are on track to meet your goals.
This is why product metrics and key performance indicators (KPIs) are some of the most important management tools for informed decision-making. They track progress, identify risks, and, ultimately, help you build better products.
Here are five crucial metrics that top a priority list of every data-driven product manager.
The Benefits of Daily Management System
Before we dive into the metrics you should be checking every day, let’s talk about the benefits of adopting a systematic approach to managing teams, processes, and projects, a.k.a. the benefits of Daily Management System (DMS).
The DMS is a lean strategy based on work standardization that aims to help you manage and improve your daily work within your organization. This strategy involves setting aside time each day to review key metrics, discuss ongoing challenges, and align teams with organizational goals.
By incorporating it into your daily routine, you can ensure that your entire team is on the same page and working towards common objectives.
A well-implemented DMS can do several things for your team and your organization:
- Improve overall productivity and optimize workflows,
- Reduce production costs and lead times,
- Streamline communication between cross-functional teams,
- Improve employee engagement, and more.
Needless to say, if you want to become a better product manager, you should think about incorporating into your routine a DMS that is customized to your industry and company.
Key Metrics That Should Top Your Morning Checklist
User Engagement
Most successful product managers start their day by checking how users are interacting with their product(s).
To start your day right, check out metrics like daily active users (DAU), monthly active users (MAU), and user retention rates. Dig into the user behavior—see what they love, what they ignore, and where they get stuck. If your DAU is skyrocketing, but your retention is plummeting, it’s time to investigate why users are drifting away and make changes based on these insights.
Conversion Rates
Imagine you’re a door-to-door salesperson. You knock, you pitch, and you hope someone buys. Well, your digital storefront works the same way: your conversion rates are like the number of doors opening after your pitch.
Analyze metrics like conversion from free trial to paid subscription or from website visit to purchase. If your online store attracts hordes of window shoppers but few make it to the checkout, something is amiss.
Cost Metrics
Numbers don’t lie, especially when it comes to finances. To ensure your product remains financially viable, keep a close eye on cost metrics every day.
Monitor customer acquisition costs (CAC), lifetime value (LTV), and overall operational costs. If your CAC is soaring, but the LTV isn’t keeping pace, it’s akin to pouring money into a leaky bucket. Strike the right balance to ensure your product is a sustainable and profit-generating venture.
Customer Feedback
Numbers tell a story, but they don’t always capture the nuances. To get the full picture and get insights into what your customers really think about your product – the unvarnished truth, if you will – take time every day to check customer feedback.
Track sentiments through reviews, support tickets, and social media comments. For example, if your inbox is flooded with requests for a specific feature, that’s a neon sign pointing towards customer needs.
Competitor Monitoring
An effective product manager knows they don’t operate in isolation. Even if you’re very secure in your product/service, it’s wise to be aware of your competitor’s tactics and movements.
To keep ahead of the curve in a highly competitive and changing market, make sure you keep tabs on your main competitors by tracking metrics like market share, feature updates, and customer satisfaction.
Knowing how your competitors operate and staying informed about their selling prices, product quality, ratings, and reviews can help you learn from their wins and losses and ultimately better position yourself on the market by differentiating your product and brand.
Conclusion
A successful product manager is a data-driven manager. Metrics like user engagement, conversion rates, and financial metrics are, for the smart manager, the compass points guiding their work days. By keeping a close eye on the key metrics mentioned above at the beginning of each day, you will not only stay informed but also position yourself to lead your product to greater heights.
