Important Metrics for Product Managers

There are 3 broad categories:

User engagement 

User Engagement metrics: Use cohort analysis over a period of time. This will help understand how the behavior has changed overtime. 

1. Number of sessions/user. 
1. How often the users log in or open the app. 
2. Session duration for a cohort(group of users performing a specific function) over time:
1. How much time they spent interacting with your product. 
2. Compare average session duration between churned and retained users. 
3. Number of key user actions/session
1. Select important user actions(like click on something) then trace them over time and for different groups of people. 

Business metrics

1. Customer Lifetime Value - LTV
1. Amount of revenue generated by different customers. 
2. Don't calculate Customer Lifetime Revenue. 
1. Deduct operating and development costs. 
2. Customer Acquisition Cost - CAC
1. Acquisition marketing costs/number of paying customers acquired over period of time. 
2. Acquisition costs = all operating and dev costs. 
3. For healthy SaaS startups LTV/CAC >=3
3. Average Revenue/Account - ARPA
1. Amount of revenue per account per month. 
2. If this metric is stable then team is on right track to provide value to customers that keeps them on the platform.
3. If you have better support and branding then you can consider increasing ARPA without changing pricing or product. 
4. Monthly Recurring Revenue - MRR
1. Company's or product revenue/month. 
5. Logo churn & Revenue churn rates:
1. Percentage of paying customers/account that are lost/month. 
2. Calculate as: cohort and aggregated. 
3. Revenue churn: Revenue the company loses/month due to churns or downgrades. This is important. 
6. Retention rate: 

Customer Service:

1. Number of incoming support tickets: Smaller the number better the state of the platform or software. 
2. Net Promoter Score

Source: https://productcoalition.com/critical-metrics-every-product-manager-must-track-c5f1e46e3423

Some math basics for metric calculation:

1. Mean = usual average of all the numbers
1. Ex: Mean of 1,2,3,4,5 = (1+2+3+4+5)/5 = 3 
2. Median is the middle value of all the sorted numbers from the input sources:
1. Ex: 1,2,3,4,5: Median =3 
2. Ex: 1,2,3,4: Median = (2+3)/2 = 2.5
3. Mode is number that is often repeated:
1. Ex: 1,3,3,3,4: Mode = 3
2. Ex: 1,3,4,5: Mode = none since none of the numbers are repeated. 
4. Range: Difference of smallest and largest number
1. 1,2,3,4,5 = 5-1 = 4

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