# 6 Key Metrics for Product Managers ![rw-book-cover](https://images.ctfassets.net/72n9zqcdnf4y/3JvJUgpZr9T1y9chQSKIUT/9f6bd0977036d44b0b5be82fc5de1a09/austin-distel-744oGeqpxPQ-unsplash.jpg) ## Metadata - Author: [[maven.com]] - Full Title: 6 Key Metrics for Product Managers - Category: #articles - Summary: Product managers need to track key metrics like CAC, CLV, MRR/ARR, churn rate, NPS, and feature adoption rate to measure product success and make data-driven decisions. These metrics help understand customer value, revenue generation, user satisfaction, and feature performance. It's crucial to set clear goals, focus on relevant metrics, use data for decisions, and communicate effectively for meaningful insights. - URL: https://maven.com/articles/product-management-metrics ## Highlights - **Key Product Management Metrics** The specific metrics you track will depend on your product and business goals. However, there are some general metrics that are important for most product managers to consider. These include: **1. Customer Acquisition Cost (CAC)** Customer Acquisition Cost (CAC) is the average cost of acquiring a new customer. It is calculated by dividing the total marketing and sales expenses by the number of new customers acquired during a specific time period. This metric is essential because it helps you understand how efficiently you are attracting new customers and whether your marketing efforts are cost-effective. **2. Customer Lifetime Value (CLV)** Customer Lifetime Value (CLV) is the estimated net profit that a customer will generate over their lifetime as a customer of your company. CLV is an important metric because it helps you understand the long-term value of a customer and can guide decisions on how much to invest in customer acquisition and retention. **3. Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR)** For subscription-based products or services, Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) are crucial metrics. MRR is the total amount of revenue generated by your customers each month, while ARR is the total revenue generated by your customers each year. Tracking MRR and ARR can help you understand your product's growth and the stability of your revenue streams. **4. Churn Rate** Churn rate is the percentage of customers who cancel their subscription or stop using your product within a specific time period. A high churn rate is a sign that customers are not satisfied with your product or find a better alternative. Monitoring churn rate can help you identify issues with customer satisfaction and take appropriate steps to improve your product and reduce churn. **5. Net Promoter Score (NPS)** Net Promoter Score (NPS) is a measure of customer satisfaction and loyalty. It is calculated by asking customers how likely they are to recommend your product to others on a scale of 0-10. Customers who give a score of 9 or 10 are considered promoters, while those who give a score of 0-6 are considered detractors. NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. A high NPS indicates that your customers are satisfied with your product and more likely to recommend it to others. **6. Feature Adoption Rate** Feature adoption rate measures the percentage of users who have adopted a particular feature in your product. This metric is essential when launching new features or enhancements, as it helps you understand how well they are resonating with users and whether they are contributing positively to the overall product experience. ([View Highlight](https://read.readwise.io/read/01hvvn404w6y09sqge1b0w6jkr)) - **Example 1: Slack** Slack uses a variety of metrics. For instance, Slack tracks daily active users, which is a crucial metric for understanding user engagement and identifying patterns in usage. They also track the percentage of paying customers, as well as the churn rate, to ensure that their product is delivering value to customers and generating stable revenue streams. In addition, they monitor feature adoption rates to understand which features are resonating with users and prioritize their product roadmap accordingly. ([View Highlight](https://read.readwise.io/read/01hvvn9zzgyz19nagndh33mfkc)) - **Example 2: Spotify** Spotify uses a range of product management metrics to measure its success. For instance, they track Monthly Active Users (MAUs) to understand user engagement and the growth of their user base. They also track the number of subscribers to their premium service and the churn rate to ensure that they are generating stable revenue streams. Additionally, they use feature adoption rates to measure the success of new features and identify areas for improvement. [](https://maven.com/courses/product?utm_source=maven&utm_medium=blog&utm_campaign=topic-product) ([View Highlight](https://read.readwise.io/read/01hvvna24ydp87jwq1gqzqfphf))