{"id":11818,"date":"2021-10-18T16:00:55","date_gmt":"2021-10-18T15:00:55","guid":{"rendered":"http:\/\/blog.intercom.com\/?p=11818"},"modified":"2021-10-18T16:40:22","modified_gmt":"2021-10-18T15:40:22","slug":"finding-the-metrics-that-matter-for-your-product","status":"publish","type":"post","link":"https:\/\/www.intercom.com\/blog\/finding-the-metrics-that-matter-for-your-product\/","title":{"rendered":"What metrics are the most important for your product?"},"content":{"rendered":"

The SaaS industry is full of advice on the perfect product metrics to gauge your users\u2019 activation, engagement, and interactions. But how do these concepts translate into real product improvements? <\/span><\/p>\n

If you don\u2019t know exactly what questions you want answered, these product metrics leave you blinded by the very data you hoped would open your eyes. <\/span>So how do you go from simply plugging your numbers into cookie cutter formulas to answering key questions about your product and business, and providing data that can inform product team decisions? <\/span><\/p>\n

What are product metrics?<\/h2>\n

Product metrics are data measurements that businesses use to evaluate the success of a product and determine how customers are engaging with it. Popular metrics like churn rate and conversion rate inform product strategy and help various company stakeholders to understand a product\u2019s value.<\/span><\/p>\n

Not all products are the same<\/h2>\n

In the early days of the analytics team at Intercom, our tracking mostly consisted of <\/span>typical SaaS company finance metrics<\/span><\/a>, such as the conversion rate of our customers from trial to paid, and monthly recurring revenue. These metrics, and others like <\/span>customer acquisition cost (CAC)<\/span><\/a> and customer lifetime value (LTV) are essential to understanding the overall health of a business and its strategy.\u00a0<\/span><\/p>\n

\u201cWithout additional metrics focusing on user experience, the analytics team will miss out on crucial inputs to decisions the product team is making\u201d<\/p><\/blockquote>\n

But they fall short for product teams because they don\u2019t answer all of the questions that are important to them, like, \u201cDo customers find this feature valuable?\u201d or \u201cHow simple is our product to use?\u201d Without additional metrics focusing on user experience, the analytics team will miss out on crucial inputs that the product team can use to inform their decisions.<\/span><\/p>\n

We started by reading about what other companies had done. We found that a lot of the \u201cbest practice\u201d advice on product analytics<\/a> was useful for introducing concepts, but that the rules weren’t uniformly applicable. So much depends on the type of business you\u2019re running. A $99 B2B SaaS app will define engagement very differently to an e-commerce website.<\/p>\n

The right product metrics start with the right questions<\/h2>\n

A central value of the analytics team at Intercom is \u201cstart with the right question.<\/a>\u201d If we just applied well-worn frameworks blindly, we would be starting with someone else\u2019s question, not our own. And if the metrics these frameworks produce don\u2019t start with the right question, they don\u2019t influence how a product is built or the direction a business takes.<\/p>\n

These metrics become false proxies that might look good on paper, but provide a false roadmap and won\u2019t give you real insight on where to take the product next or what to improve upon.<\/p>\n

\u201cMost people use analytics the way a drunk uses a lamppost, for support rather than illumination.\u201d<\/p>\n

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– David Ogilvy, founder and advertising executive<\/em><\/p><\/blockquote>\n

What’s more, a single set of metrics to serve an entire company becomes less and less effective as the company grows in size. Teams tend to diverge in terms of the metrics they care about. Although they all may share a common high-level mission, they contribute to the mission in different ways and so their success must be measured differently. The growth team is focused on engagement in one part of the product; the marketing team on an entirely different part.<\/p>\n

Finding the right questions takes collaboration<\/h2>\n

There are numerous useful metrics that analytics team can provide to product managers so they can more effectively measure product success. Here are a few examples of engagement metrics used by SaaS companies:<\/p>\n