How data driven are you, really?! [QUIZ] ?? ?? BE HONEST.

Hey folks!? It's the most critical time of the year... Again.? Welcome to the spreadsheet hell.? Evaluating, reporting, planning, tons of spreadsheets, death by PowerPoint, and vowing to be "more data-driven next year":?

Thank you Elena Verna for supplying a meme for this newsletter. Never change.

Not sure if you're data-driven? Take this 30-second quiz to find out!?

Found out you're not that data-driven? Don't worry. We have something for you:?

How to be more data-driven in 2024: the chicken soup for your end-of-the-year analytical woes

It might be a soup-in-a-cup, considering how much space we have here to talk about it - but will still quench your first data-hunger:?

Select better metrics and set better KPIs for 2024?

Two important questions first here: "What should you track?" and "How should you track it?" to get the most helpful insights? And why it's so important to track key product metrics??

Let me give you a real-life example.

Just like anyone else, me and my partner have been hit by the cost of living crisis in the UK. We wanted to answer the question "After the interest rate hikes, can I still stuff my face with Moroccan Falafels or do I need to resort to 30p Sainsbury Basics Baked Beans from now?"

My approach: look at my account balance, freak out, break up with take out lattes, wallow in frugal misery.

Here's how my in-house engineer approached this:?

Turns out we're already pretty?lean?when it comes to groceries (what the hell did we eat in May though?!), and 85% of our household spending goes towards the mortgage and utilities.

So in fact - more takeaways could potentially reduce our electricity bill... definitely not my frugal idea of baking cakes at home, which landed us a ￡700 electricity bill the other month.?

You get my point here.?

Choosing the right metrics and KPIs to track can massively influence your decisions. And choosing the wrong metrics can massively backfire. If you're looking at the wrong metrics, you will be making wrong decisions.?

So here are good Product Management metrics & KPIs to track in 2024 + why to track them + how to track them (of course, read the full post on this here - this is just a quick summary):

Product Usage and User Engagement Metrics:

Product Onboarding Engagement Rate

Why track it? High engagement with onboarding indicates a smooth initial user experience, leading to better user retention and product adoption.

How to track it? Analyze user interactions with onboarding steps using in-app analytics tools.

User Activation Metric

Why track it? Since activation is the point in time when your user experiences the value of your product - without it, they are very unlikely to come back and defo unlikely to pay for it.?

How to track it??The activation point will be different for every product - or may be even different for different user segments. So you need to first?define?the events when your user reaches value in your product, and then track it in relation to the total number of users in a particular segment and time period.?

Time to Value (TTV) Why track it?

Why track it? Shorter TTV increases customer satisfaction and loyalty, impacting long-term revenue.

How to track it? Measure the time from sign-up to the first significant value milestone achieved by the user.

Product Usage and Adoption

Why track it? Understanding usage patterns helps in enhancing user experience and identifying areas for product improvement.

How to track it? Monitor user activities and feature usage through analytics platforms - e.g. Userpilot offers an out-of-the-box Product Usage dashboard that allows you to track the vital product usage metrics without actually configuring anything.?

Number of User Actions per Session

Why track it? More actions per session indicate higher engagement, but are also signal greater product depth - which in turn minimizes churn risk. How to track it? Again, you can use Userpilot to track user actions per session. ?

Product Stickiness (DAU to MAU Ratio)

Why track it? Higher stickiness (which we measure based on the number of DAUs/ MAUs for example, as you can see above) indicates that the product is serving its purpose, and delivers enough value to be used regularly (to "stick") leading to increased user retention.

How to track it? Calculate by dividing the number of daily active users by the monthly active users, or use a dashboard that calculates this metric automatically.?

Customer Metrics

Net Promoter Score (NPS)

• Why track it? A high NPS suggests strong customer loyalty and potential for organic growth through referrals.
• How to track it? Regularly survey customers to rate the likelihood of recommending your product.

Customer Satisfaction Score (CSAT)

Why track it? High CSAT scores correlate with increased customer retention and positive word-of-mouth.

How to track it? Gather immediate feedback post-interactions or transactions with the product. Apart from those, track: Conversion Rate from Trial to Paid,?Retention Rate, and of course Customer Churn.?

Product Development and Quality Metrics

Velocity KPIs

Why track it? High velocity indicates efficient product development cycles, leading to faster market adaptability.

How to track it? Measure the time taken for teams to complete development cycles or specific tasks.

Roadmap Scoring

Why track it?

Effective roadmap scoring ensures that the most impactful features are developed first.

How to track it?

Score and prioritize features based on customer feedback, market trends, and business goals.

Revenue and Business Performance Metrics

Percentage of Revenue from New Users

Why track it? This metric helps understand the effectiveness of acquisition strategies and market expansion.

How to track it? Analyze the revenue portion contributed by new users compared to overall revenue.

Expansion Revenue

Why track it? Tracking expansion revenue is crucial for understanding customer growth and upsell opportunities.

How to track it? Measure the increase in revenue from existing customers through additional purchases or upgrades.

Customer Lifetime Value (LTV)

Why track it? LTV helps in understanding the long-term value of customers and guides acquisition spend.

How to track it? Calculate by averaging the total revenue a customer generates over their tenure. ?

4. Set up dashboards to automatically track your Key Product Metrics & KPIs and thank me next year?

How do you make your new habits stick? We're entering the "New Year's Resolutions" danger zone. I found that relying on my willpower and consistency to do something is a horrible way to do something. I found that a much better way to make my habits stick is by setting up the right "Optimal Defaults".

Like - I wasn't investing regularly until I set up direct debits to kiss that money goodbye first thing in the month.? OK, how to translate it into becoming more data-driven in 2024?? You need to build out dashboards with your metrics. And ideally zap them with your email/ slack so you get regular notifications on changes there weekly/monthly (depending on what you're tracking.)? Also - choose a tool that is easy to use for it and can track all the metrics all in one place. Ideally one that allows you to act on those too.?

5. Prioritize next year's features based on metrics and user feedback??

RICE, MOSCOW, CD3...my problem with all the prioritization metrics is that we often end up building what we think the customer wants, not what they really want. There's no better illustration for this than Olena's post:?

What I really hate is when a tool I'm using, that has so many digging bugs and UX issues that it's barely usable, is releasing new features to "catch up with their competitors" or sell more, when I - the paying customers - is dying here waiting for them to fix those bugs. It's the best way to lose a customer.?How not to do that??Sure, you can collect feedback through in-app surveys, ideally contextually after the user has reached a certain milestone/used a certain feature (see below). But I like collecting indirect feedback better tbh.?

Also - don't forget about collecting?indirect?insights by analyzing feature usage over time with?trend analysis:

What about that indirect feedback??

User?feedback?is not limited to what they tell you directly in surveys. Users getting stuck in UX bottlenecks =?feedback. Rage clicks = user?feedback.?

You can use heatmaps for collecting this type of?indirect?user behavior insights.?

Heatmaps?are visual representations of user interactions in your app. Analyzing heatmap data lets you identify patterns in user behavior and discover the parts of your product that customers engage with the most.

With Userpilot, you can tag features to monitor hovers, clicks, and text inputs. This offers feature engagement insights that can be used to generate more value from your product features:

?Here's an example of heatmap analysis in?Userpilot.

Grab a bunch of resources on Product Metrics to become more data-driven in 2024!?

• How to do a feature audit?
• 5 Feature Adoption Metrics That Every PM Should Track & 5 Strategies To Improve Them
• Decoding Customer Satisfaction Analytics: Your 6-Step Guide
• 10 Growth Metrics You Should Track And Why They Matter
• 12 Best Product Research Tools to Empower Your Strategies

Also - take part in our annual Product Trends & Resolutions 2024 survey!?

Share your thoughts here.

P.S. Join our webinar on how to improve your user engagement TODAY - it's the last webinar of the year for us!?

Sign up here.

See ya'll there!