What are metrics, what is its importance, and why it should be used in product management? The answers to these questions are quite important and are of great use. Metrics are nothing but a is a way of measuring the business’s growth.
There are several points because of which it is being measured. It is a measuring system that enables you to measure the effectiveness of the product in a much brighter way.
Metrics hold a great importance in business and so as in product management. The reason behind this is that it is very important to know the current as well the past performance of the firm. You should know how your business is performing. And can then carry out your further plans.
What is the need of Metrics?
Metrics proves to be a great tool for measuring the effectiveness of the strategy. You can get the status of the strategy that worked or not. Metrics helps you to create a certain benchmark on which you can work. And also predicts or shows the statistical analysis. It also gives you a chance to compare and contrast the existing strategies with the new ones.
Most of the product management teams get a lot of benefit from Metrics. As metrics can identify the flaws in the existing projects. And identifying the new opportunities with the least risks.
The key to success with this approach is to monitor the existing data. And the following trends ensure the measurement remains relevant.
You need to first identify the type of business. As there are two types of apps: the engagement app and transaction app.
Engagement apps are the one who wants the task to be done within their app only. The best example of this is the social networking sites like Facebook, etc.
Transaction app is the one who wants the transaction to be done on their sites only. For example, Amazon, Uber, etc.
List Of Some Metrics You Must Track
You can apply some very useful Metrics, which are:
- Measure of monthly unique visitors: A monthly unique visitor is the one who visits your platform on a monthly basis. It is an important metric, about the amount of engagement on your app. If there are fewer visitors than you should strategize in a way that it boosts your engagement. Work on things and make them go in the right direction. As this will also have an effect the customer acquisition cost. It is the cost required to gain each new customer. Understand the customer acquisition model well, as this will lead you to have a sustainable and profitable business.
- Churn: What is churn? Churn is the measure by which you get to know why your customers are leaving or subscribing to your platform. It is one of the best metrics to determine the flaws in the strategy applied. It measures the rate at which the new customers are being added or removed. This will give you an idea about which strategy is working and which is not. And you will have a clear path to follow that if your customers are leaving, then what to follow up next. It will also let you continue things which are already in the right direction and are engaging the customers more.
- Retention: When you have questions like why your customers are leaving? What fresh changes can you do? Is there any feature that you are not offering them, and so on? So knowing the answers to these questions, you need to measure the retentivity of your platform. By doing so, you get a clarity of things which need improvement as due to them the customers are leaving.
- Measure of Usage: You can reduce the churn by identifying the usage of your app. How your app is being used, is it being used daily or weekly or even monthly? After getting all these analyses, you can reduce the amount of unsatisfied users.
- Measure of First Response Time: This is another metric which measures how much time do you take to give response to the customer’s query. This is one of the best methods to engage a customer.If it takes less time to give a response, then it will leave a good impact on the customer. A good interaction is a must for a better engagement.
- Measure of Monthly Recurring Revenue (MRR): A metric which lets you count how much new revenue is added monthly. This will also let you know the newly added customers. And how much your revenue has expanded because of the upgraded existing customers.
Conclusion
“Every metric, whether it is used…, to evaluate future strategies, or simply to take stock, will affect actions and decisions.”
This quote is from, Metrics: You are what you measure, European Management Journal.
Metrics proved to be a long-term benefit for the product management. It is measurement driven, which helps in prediction and analysis, which is the goal to create an outstanding product. But one should be careful with the proper usage of measurement systems for a reliable result.
Metrics is the way of monitoring and tracking the progress of the business. It can be a leading indicator of performance or lagging indicators. Success in business begins with using the measurements to have an overall effectiveness of the product.
Here, the key is to pick up the right metrics for your business. So the businesses should take full advantages of the above mentioned metrics to sustain a successful business.
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