Important Metrics for Product Marketing

You need to pick the best metrics, based on what the target is: attracting a new consumer group, improving user popularity, getting ideas for new features. In developing a product roadmap, metrics are among the key points that allow product managers to assess interaction, use of functionality, user experience, and, of course, commercial success. First of all, pay attention to metrics that contribute to your goals. 

1. Monthly recurring revenue (MRR)

These metrics measure a product’s total revenue in one month. To calculate them, consider the MRR at the beginning of the month, add gained revenue from new subscriptions, and subtract churned revenue from lost customers.

Reference: Profitwell

2. Average revenue per user (ARPU) 

It allows you to count the revenue generated per user monthly or annually. You need these metrics to define the future service revenue, in case you’re going to change the pricing plan or roll out a promotion.

Reference: Clevertap

How to use MRR and ARPU: It is an efficient KPI to use to monitor the current health of a business and it is highly useful for SaaS companies operating on a subscription basis. Because after gaining a recurring client, you don't need to think about one-off transactions, MRR is quickly measured and predictable.

3. Customer Lifetime Value (CLTV)

These metrics allow you to calculate how much money a user will generate in the long term. LTV displays an average profit from one user before they cancel a subscription. The point of this KPI is to show you how much you can spend to attract a new customer at an early stage, regarding the probable profit from one person. 

Reference: Clevertap

How to use CLTV. Track this metric to test and pick channels for customer acquisition, purchase cycles and tactics for retention.

4. Customer Acquisition Cost (CAC)

This metric covers all the costs spent on attracting customers: marketing spendings, sales teamwork, advertising. Sometimes these costs include salaries of marketing and sales professionals. 

Reference: Intercom

How to use CAC. To assess whether customers get you less value than what you spend on them, use CLTV and CAC together and whether it is time to rethink pricing and product promotion tactics to draw more people.

5. Product Stickiness ratio

Besides revenue, the most valuable metrics of product growth is the number of users or subscribers for a fixed period of time.

Daily Active User (DAU) – the number of active users per day. An “active user” is one who signed in an account and performed some valuable activities.

Monthly Active User (MAU) – the number of active users who complete valuable activities per month.

Reference: Intercom

How to use Product Stickiness ratio. Product Stickiness of 20% is considered a positive sign, while 50+% suggests extreme success. Increasing the percentage Product Stickiness helps a product to detect growth or decrease. In planning, budgeting, or making a decision to create new features, this ratio is used.

6. Website Traffic

Website traffic is probably too generic of a term, however. The idea of website traffic consists of many things—all of which are highly measurable and heavily related to engagement. They include:

1. Sessions
2. Users
3. Pageviews
4. Page per Session
5. Average Session Duration
6. Bounce Rate

Reference: Vital

How to use website traffic metrics: You have to assess the conversion of each stage from incoming web traffic to customer converts. Identify leakages in each stage and figure out how it can be plugged.

7. Retention rate

Customer retention rate (CRR) is the percentage of customers who stayed with the company after a certain time period. 

Reference: ProductPlan

How to use retention rate: Based on this KPI, you can understand if and for how long you’ll be able to retain new customers when your customer retention rate is growing. In case it dropped, you can be on the lookout for a new competitor or a problem in customer service.

8. Churn rate

While retention rate measures the percentage of users who stayed, the churn rate measures those you’ve lost. There are two types of churn rate: customer churn (number of users who canceled paid subscriptions) and revenue churn (amount of revenue lost due to customer churn). 

Reference: ChartMogul

How to use churn rate. In terms of business success, it’s more effective to pay attention to revenue churn than to customer churn. There also are KPIs that allow you to measure the popularity of new and old features and we will discuss them now.

Final Words

Keep in mind that a product is not just about the software itself, it is about the value and customer satisfaction – so the most important metrics should be concerned with the user.