Metrics for Product Professionals
What should you measure? Focus on Today, Next, and Future.
It’s difficult to determine relevant metrics for product managers because the product management role is inconsistent from company to company.
There are actually three roles of product management: business strategy, technical planning, and growth tactics.
Growth tactics impact the products we have today — finding ways to sell more of the products we currently offer. Technical planning drives the next version of your existing products — defining new features and capabilities to be delivered next. Business strategy determines new products to build or new markets to serve. These three areas of focus correspond roughly to what’s called The Three Horizons of Growth. [Link goes to the McKinsey article].
Honestly, most product managers are primarily focused on what’s next-the technical planning-but most product metrics are about the existing product-the product in the market now. Again, this is why it’s hard to know what to measure.
So, what can be measured? Consider activities, outputs, and outcomes.
Activities can be counted. How many did you complete and how many are documented? Outputs can also be counted but really should be rated for quality. Are the outputs complete? Do they show critical thinking and deep analysis? are measured in business results, usually revenue or adoption numbers.
Let’s start with the product manager who is focused on business strategy. That person is focused on exploring options for new products to build, new markets to serve, or both.
A product manager focused on business strategy would be evaluating these business options. Researching possible new products and new markets-and creating the summary business plans to share with leadership. A strategic product manager would likely lead a prioritization exercise to guide leadership or investors to choose from many options to identify the one or two most attractive possibilities.
So what activities are needed to do this work? And what outcomes could be measured?
Activities. Identify problems to be solved in multiple markets. Review trend analysis from research firms. Interview existing customers. Interview non-customers.
Outputs. Business canvas or business plan. Prioritized list of possible opportunities.
Outcomes. Number of opportunities evaluated. Number of opportunities to move into a business planning process.
The product manager responsible for next release planning — or the Planning Manager, if you prefer — is focused on what new features or capabilities will be enabled in a near-term deliverable. Those capabilities might be software or hardware features, or new services.
This role feeds the development of products and services with problems to be solved. These usually take the form of stories or requirements, prioritized for business value.
Activities. Interview customers. Identify problems to be solved. Communicate problems to the technical team. Validate potential solutions with customers or serve as the customer representative.
Outputs. “Groomed” stories including personas, problems to be solved, and acceptance criteria. Prioritized backlog of stories in business-priority order. Release status updates with stakeholders.
Outcomes. Successful deployment of features. Customer satisfaction for new features. Pending sales enabled with new features.
The product growth manager focuses on how to increase sales for today’s products and services. In particular, they examine areas of friction in selling and on-boarding new customers.
Activities. Attending sales team and customer meetings. Identifying impediments to buying and working with marketing to define new campaigns to address the friction. Interviewing lost prospects and customers to understand buying criteria. Interviewing recent purchasers to understand why those chose the product and to identify ways to simplify on-boarding.
Outputs. Buyer personas. Buyer journey. Sales playbook. Documented on-boarding process. Win-loss analysis. Launch plan.
Outcomes. Win-loss interviews. Adoption of latest release by existing customers. New customers acquired. Existing customers who didn’t renew (ie., “churn”). New product sales revenue. Customer retention.
Activities and outputs are easy to measure but they are not outcomes. That said, many activities drive outputs that lead to outcomes. Ultimately, you want to tie the work you do — the activities and artifacts — to the business and customer outcomes that are achieved.