Shreyas Doshi on choosing, refining, and tracking product metrics
https://mixpanel.com/blog/shreyas-doshi-product-metrics/
To sum up my key advice for those leading their team in choosing the right product metrics:
- Categorization is effective: Using the 6 metrics categories above will help ensure you’re thinking holistically about user value and business value.
- Choose a limited group of KMs and LMs: 3-5 key metrics and 3-5 leading metrics have worked quite well for me on most products, across both B2B products and consumer products.
- Remember to be metrics-informed, not metrics-driven: If your team does not understand the “why” behind a given metric and yet proceeds to impact that metric, it’s likely that it’s being driven by metrics rather than being informed by them.
As Reforge CEO Brian Balfour says, “most products should have four high-level metrics: an acquisition metric, retention metric, engagement metric, and monetization metric. These four act as a system where one can influence the other.”
By capturing a different dimension within each product, product managers can better understand the context behind the numbers, and find a balance that will move the product forward.
When it comes to the criteria for choosing your key metrics, there isn’t a set of hard rules. The criteria I use for key metrics are:
- It must be responsive to product changes.
- It’s an aggregate measure of the product’s value for its users.
- It can be readily tied to business value.
- It’s expected to be long lasting (at least two to three years).
KMs give a great bird’s-eye view of how the product is doing. You’ll typically create annual goals and targets for your KMs. Your company’s executives and board will also likely look at these metrics to assess the product’s progress.