How do you measure the value of your product improvements?

1 Define your goals and hypotheses

Before you start working on any product improvement, you need to have a clear idea of what you want to achieve and why. What is the problem you are trying to solve or the opportunity you are trying to seize? What are the expected outcomes and benefits of your improvement? How will you measure them? These questions will help you formulate your goals and hypotheses for your product improvement. A goal is a specific, measurable, achievable, relevant, and time-bound (SMART) statement of what you want to accomplish. A hypothesis is a testable assumption of how your improvement will affect your goal. For example, if your goal is to increase user engagement, your hypothesis might be that adding a new feature will increase the time spent on your app by 10%.

2 Choose your metrics and methods

Once you have your goals and hypotheses, you need to select the metrics and methods that will help you test them. Metrics are quantitative indicators that measure the performance or behavior of your product or users, while methods are the techniques or tools used to collect, analyze, and present your metrics. Depending on your product, industry, and goals, there are various metrics and methods you can use. For example, user satisfaction can be measured with surveys, ratings, reviews, feedback, or net promoter score (NPS). User behavior can be measured with analytics, heatmaps, session recordings, or user testing. Business outcomes can be measured with conversions, retention, churn, lifetime value (LTV), or return on investment (ROI). Common methods include A/B testing (comparing two versions of your product or improvement), multivariate testing (comparing multiple variations of your product or improvement), cohort analysis (grouping users based on shared characteristics or behaviors), and data visualization (presenting metrics in graphs, charts, tables, or dashboards).

3 Run your experiments and analyze your results

After you have chosen your metrics and methods, you need to run your experiments and analyze your results. This is where you test your hypotheses and see if your product improvement is delivering value or not. Depending on your product and improvement, you may need to run your experiments for a certain period of time or until you reach a certain sample size or confidence level. You also need to consider other factors that may affect your results, such as seasonality, external events, or user segments. When you analyze your results, you need to look for patterns, trends, anomalies, or insights that can help you understand the impact of your product improvement. You also need to compare your results with your baseline or control group to see the difference your improvement made.

4 Communicate and act on your findings

The final step of measuring the value of your product improvement is to communicate and act on your findings. You need to share your results and insights with your team, stakeholders, and customers in a clear and concise way. You can use data visualization, reports, presentations, or stories to convey your message. You also need to use your findings to inform your next actions and decisions. You may need to iterate, optimize, or scale your product improvement based on your results. You may also need to validate, invalidate, or refine your hypotheses and goals. Or you may need to explore new ideas, opportunities, or improvements based on your learnings. The key is to use your measurement as a feedback loop that helps you continuously improve your product and deliver value to your customers and stakeholders.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?