Every day, product marketing becomes more data-driven than before. With all the analytics tools out there, it’s possible to track every kind of metric — you can actually track every single thing a user does. What’s more, product marketing is an extremely diverse function — it serves many different stakeholders and its priorities can differ widely depending on the industry and the size of the business.
What this means is that finding the right product marketing metrics is extremely crucial. Among the sea of options available, it’s important to identify which metrics are key to the success of your business. Otherwise, it’s easy to miss the wood for the trees and start tracking too much or too little.
Based on the different needs and priorities of a business, here are the 10 most important product marketing KPIs:
Overall Business Metrics
These metrics are most closely linked to overall business outcomes.
This seems like an obvious one but you’d be surprised at how many product marketing teams sideline it. At the end of the day, all the different product marketing efforts are meant to increase this number. Since the revenue depends on many other factors, it can’t be the only product marketing metric. But it is always an important part of the mix.
It’s also useful to break this goal down, perhaps into acquisition targets and upsell/retention/cross-sell targets. It can also be broken down into related goals that are more directly accessible — new customers acquired, retention rates, average revenue per user (ARPU).
This is one of the best mid-way metrics to track product marketing impact. It’s directly affected by product marketing efforts, and in turn, it directly impacts revenue.This metric is also important because when you understand how and when consumers are using a product, it becomes possible to determine things like how to improve retention rate and where the upsell/cross-sell opportunities are.
This can be broken down into several metrics depending on the product and the industry. For ChatGen (www.chatgen.ai), a hybrid chatbot paltform, we use a combination of metrics — number of conversations, number of leads generated, number of meetings, number of workflows created. While this metric is usually shared with product management teams, product marketing can lead campaigns around improving key features that impact revenue and retention.
Frequency of High-Value Actions
This is a great metric that every business can customize to make their own. Instead of tracking generic metrics like Daily Active Users (DAUs) or Monthly Active Users (MAUs), companies should identify actions that maximize value and directly impact business metrics.
For instance, “Adding to Cart” might be one such action for an eCommerce business. Sign-ups, free trials and demos are some other high-value actions. Every product marketer needs to figure which are these high-value actions and then track them over time.
These metrics are especially important for high-growth companies that want to stay on a sustainable growth path.
Customer Lifetime Value (CLTV)
CLTV indicates important growth trends about the business. The higher the CLTV over a period of time, the more a customer is spending on your product. When CLTV declines, it can be a result of more competition or a deep discounting policy. When the CLTV of competitors is also declining, it could mean that the product category itself is in a de-growth phase.
This refers to the rate at which qualified leads turn into paying customers. A higher close rate means that product marketing is both efficient and cheap. If the rate is too low, it means that sales enablement is an issue. For early-stage companies, it could also mean that the product-market fit isn’t there yet. While in general, a higher close rate is better, beware of close rates that are too high. It could indicate that your pricing is too low.
Average Cost per Lead
This metric naturally helps you keep an eye on the cost of lead generation. The idea is to increase your close rate (which means improving lead quality) while keeping your average cost per lead as low as possible.
Average Contract Value
This is an important metric to track, especially when your transaction size is not fixed (an online grocery store, for instance). It will help you determine whether you’re unit-economics positive and are on track to sustainable growth.
Customer Acquisition Cost
The Customer Acquisition Cost measures the cost of acquiring a customer — all the way from the awareness stage up to closing the sale. Naturally, the Customer Acquisition Cost needs to be kept as low as possible, but this is usually in relation to the Customer Lifetime Value. If the CAC rises but the CLTV rises along with it, and the unit economics is in place, then this is not an issue.
Although they don’t directly contribute to increased revenue, there are some other product marketing metrics which can help product marketers determine the result of their efforts.
Usage of Product Marketing Assets
One of the most direct and effective ways to measure the impact of a product marketing effort is to see how it is being used. For instance, if a piece of sales collateral (eg. a case study or a datasheet) is being used frequently by the sales team, it’s clear that it’s helping in closing the sale. While these kinds of metrics don’t directly talk about the bottom line, they’re still a useful way of assessing the impact of the product marketing team’s efforts.
Net Promoter Score
Customer happiness metrics are indirectly correlated to business metrics like revenue, and are the key to healthy, sustainable growth. Net Promoter Score is one such metric. It’s a simple question — ‘How likely are you to recommend our product to a friend?” and asks customers for a rating between 1 to 10. It’s a simple and direct metric for product marketers to assess customer satisfaction.
While this list does contain most of the important metrics, product marketing managers will have to choose the ones that they want to prioritize. Figure out the 3-4 metrics that are most crucial to your team’s success, and then obsessively track them to ensure they’re in the right direction.