If you're a product manager, you're probably juggling several tasks at once. But how do you really know if your product is doing well? There's no way to be sure unless you check out the product metrics. These are numbers and data points that help you understand how users are interacting with your product. In this post, we’ll walk you through what product metrics are, why they matter, and the 12 key product metrics you should start tracking today.
Product metrics are key performance indicators (KPIs) that give you insights into how your product or feature is doing. These metrics offer insights into user behavior, the value of your product, and how your product is performing throughout the product life cycle. A study by McKinsey & Company found that data-driven organizations are 23 times more likely to acquire customers and 19 times more likely to be profitable.
Depending on your product, these product management metrics can vary. For instance, a digital product like a mobile app may focus more on engagement metrics, while a B2B SaaS product might prioritize new customer acquisition and financial metrics.
Tracking the right metrics helps you:
Measuring the success of a product or service isn’t just about looking at one or two numbers, but using the right metric frameworks that match your goals and product stage. Let’s walk through two of the most common and effective product management metrics frameworks:
Also known as AARRR, Pirate Metrics are especially helpful for product teams looking to assess how users interact with their product over time. Each letter stands for a step in the user journey, giving you clear metrics to track. They are:
The HEART framework is a great fit if your team wants to focus more on the user experience. Developed by Google, it breaks down product analytics into five categories:
There are a lot of metrics to track in a product, especially if it's new. However, to make things easier, we’ll use the Pirate Metrics or AAAAAR framework. Like we earlier discussed, this structure consists of five key user journey stages. They are:
This stage is all about how people find your product and decide to give it a try.
This metric helps you see how many people visiting your website are signing up for your product. Let's just say it's a clear indicator of how effective your marketing and sales efforts are.
How to Calculate:
If 2,000 people visit your sign-up page and 300 start a free trial:
Sign-Up Rate = (300 / 2,000) × 100 = 15%
A higher rate means users find your product valuable enough to try, which boosts the effectiveness of your product marketing strategy.
This is the typical cost your company spends to gain a new customer. To figure out your Customer Acquisition Cost (CAC), just divide the total amount you spent on marketing and sales by the number of new customers you got during that time.
How to Calculate:
If you spent $5,000 and gained 50 new customers, your CAC would be:
CAC = $5,000 ÷ 50 = $100
This means it costs you $100 to get each new customer.
In the activation stage, new users begin to see how the product helps them and start using it to reach their goals.
TTV tracks how long it takes for a new user to reach that "aha!" moment or the first sign of real value. This metric allows you to improve onboarding experiences.
Example:
If users start using a project management tool and it takes them 3 days on average to complete their first project board, then:
Time to Value = 3 days
A shorter TTV shows users engaged with your product early on, increasing the chance they’ll continue to use your product.
This is the percentage of users who start using the product and hit a key milestone like uploading their first file or scheduling their first call.
How to Calculate:
If out of 800 sign-ups, 560 users complete onboarding, here's how to get your customer activation rate:
Activation Rate = (560 / 800) × 100 = 70%
Now that they’ve seen value, are they using the product regularly? That's what this stage is all about.
This metric helps you see how many users have started using a specific product or feature over time. It is one of the key product management metrics to track when launching updates or making changes to your product.
How to Calculate:
If 400 out of 2,000 users use your new AI-writing tool regularly:
Adoption Rate = (400 / 2,000) × 100 = 20%
Tracking engagement is one of the best metrics to assess whether people are actually using the product or just signing up and disappearing.
How to Calculate:
If 900 out of 1,500 users logged in and used features this week:
Engagement Rate = (900 / 1,500) × 100 = 60%
Customers reach the retention stage when they’ve gotten used to the product and keep using it because it continues to meet their needs.
High retention shows your product is performing well, while low retention may suggest users leave your product too soon.
How to Calculate:
You had 1,000 users at the start, gained 200 new ones, and ended with 1,050:
Retention Rate = ((1,050 - 200) / 1,000) × 100 = 85%
This is one of the key product metrics for SaaS tools, especially when usage frequency drives value. According to Paypro Global, a healthy DAU/MAU ratio for SaaS products typically falls between 20% and 50%, indicating strong user engagement.
How to Calculate:
With 400 daily active users and 1,200 monthly active users:
DAU/MAU = (400 / 1,200) × 100 = 33.3%
At the referral stage, loyal customers go a step further by telling others about your product. They share it with friends, family, or colleagues, helping bring in new users.
This metric allows you to quickly gauge how satisfied users are with your digital product, usually through a quick survey.
How to Calculate:
If 750 out of 1,000 respondents gave a 4 or 5-star rating:
CSAT = (750 / 1,000) × 100 = 75%
High CSAT means users recommend a product, and happy users often lead to word-of-mouth growth.
NPS is one of those metrics to measure product success that shows user loyalty. It asks: “How likely are you to recommend this product?”
How to Calculate:
If 65% are promoters and 20% are detractors:
NPS = 65 − 20 = 45
The revenue stage happens when a user starts paying for the product or moves to a more expensive plan. Reaching this stage shows how well your product can drive long-term success.
This shows how much revenue you can expect from a single customer over a given period. It’s one of the two key metrics to compare with CAC.
How to Calculate:
If a customer pays $120/month and stays for 3 years:
CLTV = $120 × 12 × 3 = $4,320
This metric allows you to plan for growth and adjust sales and marketing costs based on real returns.
MRR helps you track your product’s predictable income, a must-have on any product management KPI dashboard.
How to Calculate: If you have 150 paying users at $79/month:
MRR = 150 × $79 = $11,850
The metrics to help you evaluate your product strategies are out there, you just need to know which ones matter. Tracking your products using different metrics is essential throughout the product life cycle. So go ahead, pick the right metrics, start tracking them, and take control of your product’s success.
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