Choosing the right Product Metric
Product analytics is a key part of Product management and it can contribute to the success or failure of your product.
Metric tracking, interpretation is the core of product analytics. There are a lot of data points and things to measure today, with analytic tools having immense capacity. However, you don’t need all the data, you just need a few to guide your product decisions.
Choosing the right metric can be a challenge, as your analytic tool captures a lot. An essential or simple analytic tool like Google analytics can capture over 200 metrics that span the entire funnel; acquisition to conversion and can be overwhelming.
Two frameworks have proved helpful to me in choosing the right metrics.
1. The only metric that matters by Josh Elman
3. The North Star Metric
The first framework which is the focus of this post helps you to identify the most ‘important’ metric. This is a high-level metric developed from the purpose of your product. This helps you define success.
It begins with the question- Are people using your product?
· Purpose: Why do they use your product?
· Core Action: What is the key behavior or action they perform on your product?
· Cycle: Do they use it at the frequency you expect?
· Key metric; How many times users perform the core action on the expected cycle.
This is a useful framework that connects the developed metric to the purpose of the product, core action performed on the product, and adds an element of time.
As a product manager, you can use this to develop or choose the right metric or metrics for your product. You need to be clear about the purpose, core actions of your product to get meaningful insights.
Case study
Do people use the product-Yes
Purpose- To access mental health therapy through qualified therapists.
Core Action & Cycle-Book mental health sessions monthly
Key metric- The number of mental health sessions booked monthly.
This metric may not cover all features of your product, but it measures the purpose of your product and can define success on a macro- high level.
On a micro level, you can use this framework to also choose metrics that contribute to this Core action. e.g. Number of signups, Number of active users, and spot gaps, user drop-off points on the way to completing the core action.
As your company grows, you will track various micro metrics but use this to stay on course.
