John Mansour
6 min readOct 24, 2022


kpis for product managers

Data is crucial for measuring the success of a product or service. Many product managers have been fooled into thinking they need to measure fifty different metrics to find out whether their product is performing well or not.

It doesn’t have to be that complicated. Track the following seven metrics and you’ll know how well your product is doing, what you need to work on, and how your customers feel about your product.

What Are Product KPIs?

Product KPIs (key performance indicators) are quantifiable measurements you track to determine the success of your product and whether or not you are achieving your overall business goals. KPIs provide an unbiased look into the market performance of your product.

The truth is, there are dozens and dozens of product metrics you can track, but not all are relevant or helpful. A metric alone is just information, but a product KPI answers a question–such as “Is our rate of acquiring new users growing faster or slower than the market?”

Why are Product KPIs Essential?

Product KPIs are essential not only in determining the success of your product, but also to help identify trends, user behavior, opportunity areas, and more. Good KPIs also keep your team on track by focusing them on the most important aspects of your product in terms of delivering customer value.

Good product KPIs don’t exist merely to make you feel better about your performance — these are “vanity metrics.” Instead, these metrics give valuable insights into the health of your product as a whole and the value your customers get from it.

When to Establish KPIs for Your Products

Once you establish product KPIs, it’s critical to communicate them to your engineering team to make sure they have a clear picture of the value targets before the product is built or launched. As mentioned, product KPIs help keep your team focused on the most important aspects of your product performance.

Establishing KPIs ahead of time also ensures that you have measurement systems in place that will begin gathering the necessary data as soon as you launch your product. Begin gathering data as soon as you can, but keep in mind some trends and insights cannot be gleaned until several months after the product launch.

7 Top Metrics and KPIs for Product Managers

We’ve identified the seven most relevant product KPIs for product managers to track. These KPIs give granular insight into the performance of your product and help you monitor the ups, downs, and opportunity areas of your product.

1. Customer Conversion Rate (CCR)

Customer Conversion Rate indicates how often customers are landing on your site and signing up for a trial or purchasing your product. Generating traffic to your business website takes time and effort, so you want to know that your efforts aren’t wasted.

If traffic to your site is high, or open rates on your emails are high, but few people are purchasing or signing up for your product, that means you have a low Customer Conversion Rate. A low CCR could indicate poor positioning, a pricing objection, a perceived lack of need for your product, or something else. You’ll need to dig into more KPIs to determine the cause.

Alternatively, if you only have a small number of visitors to your site but a majority of them sign up for your product (giving you a high CCR), this could indicate your product has value–and it’s time to turn up the marketing efforts.

2. Customer Acquisition Cost (CAC)

Customer Acquisition Cost tracks how much you’re spending to attract leads and convert customers. What’s important to remember is that Customer Acquisition Cost should not exceed the lifetime value of your customer (more on that next). If it seems like you’re spending a lot on acquiring new customers, but those customers generate a high percentage of your revenue, it’s probably worth it.

Calculating your Customer Acquisition Cost is simple. Find out the total cost of your marketing efforts and divide it by the number of customers acquired during that push. For example: You spent $1500 on a robust email marketing campaign and ended up with 600 new customers. The CAC of each new customer was $2.50.

3. Customer Lifetime Value (CLTV/LTV)

Customer Lifetime Value represents the average revenue you make from a customer for the duration of their experience. CLTV is easily determined in a fixed-price model, such as a subscription-based service. If your product costs $15 a month, the Customer Lifetime Value will be $360 (e.g., if the average customer lifetime is two years). Given the previous example of $2.50 to acquire new customers, a CLTV of $360 makes that cost very reasonable.

4. Daily Active Users and Monthly Active Users (DAU/MAU)

Daily Active Users tracks how many active users you have a day, while Monthly Active Users tracks how many monthly active users you have–fairly self-explanatory. Tracking DAU and MAU are important because these numbers tell you how much your product is a part of the customer’s daily routine. It doesn’t matter whether your product is an enterprise product or a consumer app. You want customers to need your product every day.

When setting DAU and MAU as product KPIs, you need to define what an “active user” looks like for your product. Don’t set the bar too high here. All you need to do is determine the minimum action required for your app to provide value to your customers.

5. Monthly and Annual Recurring Revenue (MRR/ARR)

Tracking Monthly and Annual Recurring Revenue are what your stakeholders, shareholders, and C-suite members will care about most. The MRR and ARR represent the top-line revenue you can expect on a monthly and annual basis and indicate the extent to which your product is contributing to the organization’s revenue goals.

Once again, these numbers are very easy to calculate when running a subscription-based product. If you have 1000 customers spending $15 a month on your product, you should expect around $15,000 as your MRR (give or take fluctuations in subscriptions).

6. Customer Retention Rate (CRR)

Customer Retention Rate is defined by the customers that stay with the product vs. those who “churn” or drop off shortly after acquisition. CRR is one of the most critical metrics as it tells you exactly how much value customers perceive they’re getting from your product. What defines as churn won’t be the same for every product, however. One business’s churn might be another’s end of customer lifetime.

Your Customer Retention Rate can be calculated by taking the number of customers at the end of the specific period (monthly/annually), subtracting the number of new customers, and then dividing by the number of customers at the start of the specific period. Multiply that number by 100 to find the percentage of customers who’ve stayed with the product.

7. Net Promoter Score and Customer Satisfaction Score (NPS/CSAT)

Your Net Promoter Score and Customer Satisfaction Score measure how customers feel about your product and whether or not they are likely to recommend it to others.

To calculate your NPS, prompt your users to rate how likely they are to recommend your product between 1–10. Promoters are considered users who rate between 9–10, passives/neutrals rate between 7–8, and detractors rate between 0–6.

To determine your Net Promoter Score, simply subtract the number of detractors from the number of promoters. A high NPS generally contributes to 20–60% of organic growth, while a negative NPS signifies customers are not getting measurable value from your product.

Customer Satisfaction Score, on the other hand, measures how happy a customer is with an individual service or feature within the product. CSAT scores are helpful to review before updates and subscription renewals because they allow you to identify and improve pain points within your product.

Final Word on Product KPIs

You can track dozens of metrics, but tracking the right ones will actually help you in the long term. By tracking these seven metrics, you’ll have a better insight into your product’s performance, value to your customers, and overall contribution to your organization’s goals.

Our School of Product Management dives deeper into establishing product KPIs and so much more. Enroll in virtual on-demand classes or schedule personalized training for your entire team to learn skills that will help grow your product and boost your career.

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John Mansour

Eliminate inconsistencies in how customer value is defined with personalized hands-on training courses for B2B/B2B2C product management & product marketing.