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Understanding Product Metrics: A Guide for Aspiring Product Managers

From Basics to SMART: Unlocking the Power of Product Metrics

Co.Lab Team
February 2, 2024

In Product Management, understanding and measuring product metrics stands paramount. Whether you're at the helm of a startup or navigating the intricacies of an enterprise, the metrics you monitor directly intertwine with your organizational aspirations.

However, the landscape isn't as straightforward as numbers on a dashboard. In fact, the array of metrics to choose from can be overwhelming. It then becomes crucial for every product manager to discern which metrics genuinely drive growth, revenue, and overall success.

This article delves deep into the nuances of product metrics, highlighting their importance and how to smartly integrate them into your product management toolkit.

Let’s dive in.

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Contextualizing Product Metrics

There are various metrics that you can use to measure the performance and success of your product. Tangentially, the metrics you measure are also intimately correlated with your organization’s business goals, industry, market leverage, as well as your official capacity as a product manager.

After all, an associate product manager will be tracking different metrics with, say, a director of product. In the same way that a startup product manager has different priorities compared to an enterprise product manager or growth product manager.

Setting up  Product Metrics is a team activity. Involve every facet of the business to get the entire picture of your past, prsent, and future performance

It’s also worth noting that your PM experience will widely vary depending on the product culture maturity of your organization. Often, product managers are confused with project managers or program managers - despite having clear delineation of responsibilities.

In any case, it’s precisely because things are like this that product managers need to have a strong foundation on product metrics. These are the keys to figuring out which facets of your product (s) will de facto drive real growth and revenue, and in turn, success for you as a PM.

SMART Framework

But before you start listing the product metrics you’d want to track, it’s important that they are in line with current best practices. One of a PM’s useful framework in their repertoire is the SMART Framework.

It’s an acronym and each letter means the following:

  • SPECIFIC - which metric to be exact? who is tracking this?
  • MEASURABLE - are they quantifiable? in what way are we measuring them?
  • ATTAINABLE - does your team have the resources to track all of them? which tools are you using?
  • RELEVANT - are you collecting data just for the sake of collecting them? or do they actually help?
  • TIME-BOUND - how long are you collecting data for? will it be enough to derive a meaningful product decision?

Of course, it’s best to note that this is just a framework. In a real-work setting, industries and trends move quite fast - not to mention internal factors like organizational pivots are very real.

Woman smiling. Explaining the KISS framewrk. K = Keep, I = It, S = Simple, S = Silly.

Each company has their preferred way of measuring data - something that you may not even have a say at all as a newbie PM. For example, Twitter moved away from the largely standard Daily Active Users (DAU) to Monetizable Daily Active Usage (mDAU). It aimed to measure the number of users who can be shown ads to, justifying that it’s a better metric to valuate its company.

Unfortunately, technical limitations (e.g. bots, spam) and overall difficulty rendered it impossible to produce an accurately quantifiable metric - which makes it, at best, a reasonable estimate - and scrutinized online as nonsensical. Again, when in doubt, keep it SMART.

Ultimately, what’s important is not to get too attached to your metrics. They are tools to guide your product decisions - and not a definitive indication of what your next steps are limited to. Trust your product gut.

Tying the Product Metrics Knots

Navigating the world of product metrics is akin to steering a ship through ever-shifting waters. While the SMART Framework provides a robust guideline, it's essential to remember that trends and industry standards evolve rapidly. Companies may choose metrics that suit their unique narratives, but their effectiveness is always up for debate.

As a product manager, while metrics serve as invaluable signposts, they shouldn't overshadow instinct and experience. Striking a balance between empirical data and intuitive decision-making is the real key to successful product management.

Always keep in mind: metrics are tools, not doctrines. Trust in data, but more importantly, trust in yourself and your product vision.

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