10 Metrics Every SaaS PM Should Use by fmr Facebook Product Leader, Anand Arivukkarasu
1. Business Metrics MRR (or ARR)
Monthly Recurring Revenue
Customer Lifetime Value
Customer Acquisition Cost
Churn and Retention Rate
2. Product Metrics
Product Usage
Product Stickiness
Feature adoption & retention
Product Quality & Efficiency
3. Customer Metrics
Net Promoter Score (NPS)
Mission Metric (ROI)
Business Metrics MRR (or ARR)
Monthly Recurring Revenue
This indicator tells you how much your company earns month by month. The amount you bill your clients every month is equal to the number of clients. A company can have several plans: free plan, premium plan, premium plus plan, in this case, all paying customers are counted, depending on the plan they participate in. Then we multiply the corresponding amount of construction you do for that particular category and sum them up. It is very important that this indicator be tracked at the company level. This means that users stay and pay for the product you created. This is a very good indicator of how things are going and can also be a great indicator of growth. It helps you create features that customers want. This is a great indicator that people are paying money for what you build.
Customer Lifetime Value
Customer Acquisition Cost
Churn and Retention Rate
This is a very important metric to understand from a business perspective for PM because it will help you decide which features will help you achieve the best retention and actually score for that metric.
Product Metrics
Product Usage
As a product manager, this is one of the most important areas that you need to understand and develop.
Product Stickiness
Feature adoption & retention
Product Quality & Efficiency
These are the two areas (feature errors and then overall error reduction) that you need to look at to understand how well you are doing in terms of quality and efficiency.
Customer Metrics
This metric is useful for the marketing sales team. If you connect your product to more other partners, you want to measure how often these metrics are used to double some of them and remove some of them to make life easier for your customers. You also need to think about how to build your roadmap around this.
Net Promoter Score (NPS)
The more positive results you have over time, based on statistical significance, you can understand that you are moving in a positive direction. It takes a lot of time to build this metric. You could also partner with your clients to achieve success, because they also like to understand this indicator. Two important levers here are customer success and the development team. Both benefit from this metric.
Mission Metric (ROI)
Is your product able to help your end user or not? They may succeed because of the reasons they contacted you or because of the value they received from you. For example, you provide a marketing technical product where they appear when a particular company or business comes in and uses your product to promote and increase sales.
You have to look at those who use your product and understand whether they use it wisely or not. See what percentage of your clients are succeeding and at what level they are succeeding. This is very important to track over time because it provides solid proof that your product is working for someone. You start making them more accessible to more customers so that your product works for them and for you.
These are the top 10 metrics that every product manager should build a dashboard over time and start tracking.
These are not the only metrics you should be concerned about. There are other metrics that you should use as part of your dashboard.
Things to Avoid
Having an idea of qualitative signals with a quantitative approach, we will balance them both.
Anand Arivukkarasu, PM Should Use by fmr Facebook Product Leader