Measuring product success throughout the product life cycle is a fundamental skill for product managers in any size or type of organization.  But many struggle with identifying the “right set” – does it include only product-specific reporting, or should broader company goals be included?  Here’s our advice from a recent coaching session on the best metrics for a growth stage product.

1.       Start With Product-Specific Numbers

The three basic groups are:

-          Sales and Market Share. Track sales numbers and market share on a bimonthly or monthly basis.  Market share reporting can be done quarterly, half-yearly or even annually.  Also consider including a “leading indicator” of revenue, such as active prospects or leads in the pipeline.

-          R&D Progress.  Include a summary of product development progress against the schedule, product development costs vs. budget,  andnew vs. resolved product defects over time.

-          Operations Numbers.  If you’re working with physical products, you can track inventory and inventory turns and production cycle times.  For software, track uptime, SLA issues and concurrent users.

 2.       Include Metrics Everyone Cares About

Do report on metrics that apply to the overall business, such as:

-          Customer Satisfaction/Net Promoter Score.  The net promoter score is a key leading indicator of future product success, measured by the percentage of customers who are “raving fans” vs. those who are neutral or detractors.  This is a good trend to track over time to ensure you’re growing a base of happy, loyal customers who would recommend your product – and company – to others.

-          Customer Service Numbers.  In this category, consider using number of calls, resolved issues and time to resolution to help determine product success.

-          Customer Churn.  This provides clues to possible indicator of product quality issues or increasing competitive threat, and should be on everyone’s radar.

A Word on Communicating Metrics

If your team is new to using metrics, start with an easily-digestible set – choose from the list above 5 or 6 numbers that are key to predicting your product’s success AND that are aligned with your company or division strategy.  Publish them regularly, and be sure to include a brief analysis of the numbers.  When the news is good, include kudos to team members in your comments; when the news is bad, work with the person in charge of the problem area to plan a mitigation strategy BEFORE publishing the numbers.  Both of these strategies will help you build team cohesiveness and ability to respond to issues, as well as greater company-wide awareness of your product’s performance.

Need Help?

For help in managing metrics as well as building other key product life cycle skills, consider attending our next Product Management Intensive™ course.  Pivotal PM’s classes are small by design to ensure working product managers receive intensive instruction that can be applied immediately to daily challenges. For a complete list of upcoming courses, click here.