As a product growth manager, there are 5 key metrics that you should track and optimize to achieve your goals. Let’s take a look at each one in detail:

Product Growth Metric #1: User Acquisition

The first metric to track is user acquisition. This metric shows the rate of new users that are discovering and using your product. Users might discover your product through a new marketing channel, or they might be returning users who have discovered new features.

And user acquisition is broken down into 2 sub-metrics:

Organic Growth – Organic growth is when existing customers refer your product to new users and gives you a better long-term ROI than paid acquisition. This is why it’s important to track your customer referrals because this is free user acquisition and is the best way to scale your business.

Paid Acquisition – Paid acquisition includes any marketing that you pay for such as online ads, referral programs, and brand partnerships. This is a great source of short-term growth, but can be very expensive if you don’t know what you’re doing.

Product Growth Metric #2: User Retention

The second metric to track is user retention. This metric shows the rate of users coming back to your product after they’ve discovered it. One of the biggest mistakes companies make is to focus on getting new customers before retaining their current ones. Even the best marketing campaigns only have a 1 in 10 chance of converting a visitor into a customer.

So, the best way to scale your business is to make sure your existing customers keep coming back. Retention metrics include: – Churn Rate – The churn rate is the percentage of customers who leave your product. If you have 100 customers, but 10 of those customers leave every month, you have a 10% churn rate. The lower your churn rate, the more likely your customers are to stick around.

This is usually tracked per cohort: – Retention Rate – The retention rate is the percentage of users who come back to your product after using it. If you have 10,000 customers and 9,000 of them come back after using your product once, your retention rate is 90%. This is one of the best ways to scale your business and is usually tracked per cohort:

Product Growth Metric #3: Cohort Analysis

The third metric to track is cohort analysis. Cohort analysis shows you the behavior of specific groups of customers, called cohorts. You can group customers by when they joined your product, how many times they used your product, or a combination of both. This is a great way to track and optimize your customer experience.

You can also optimize your customer acquisition by studying cohorts that join after new marketing campaigns. Cohort analysis segregates user groups based on their behavior and usage of the products. The groups consist of related users that share common characteristics. For e.g. in an ecommerce portal, the customers whose order value exceeds $10,000 annually may form a cohort.

Cohort analysis helps companies analyse the behavioural analytics for the most relevant customer groups. The company may offer loyalty benefits to its most valuable customers. Say, the ecommerce company provides discount coupons to customers whose order value exceeds a given threshold. The cohort analysis can help companies develop actionable triggers for achieving the business results.

Product Growth Metric #4: Net Channels

The fourth metric to track is net channels. This metric shows how much traffic to your product is coming from different sources. You can track this by calculating the difference between your referrals and your organic traffic. If referrals are higher than organic traffic, then you’re getting more customers from referrals than word of mouth. This is a great way to identify which new marketing channels are working best for your business.

The product growth manager needs to analyse the most relevant channels for revenue. By looking at he net channels,  company can put its marketing budget to good use.

When the word of mouth creates an organic customer base for a product, companies can continue to invest in building superior user experience for its customers. It creates a win win situation for product and marketing teams.

Product Growth Metric #5: Bottom Line

The last metric to track is the bottom line. This isn’t a specific metric like the others, but it’s still vital to track and optimize. In order to track the bottom line, you need to understand your profit margin.

Profit margins show how much of the revenue you make is profit. There are dozens of ways to improve your profit margin, but they all boil down to one thing: increasing your revenue while keeping costs low.

There are many ways to track your revenue, but to track your profits, you need to know your revenue, your costs, and your profit margin. That’s it! Those are the five key metrics that product growth managers need to track and optimize. If you’re tracking these metrics, you’ll have a much easier time growing your product and reaching your goals.

A product growth manager needs to understand the impact of adding features, providing high quality customer & product experience on the bottom line. Profitable products can scale to help companies achieve their long term business horizons.

Kreyon Systems provides indepth software product development expertise with the latest technologies & dynamic business needs. If you are looking for building a software product, please reach out to us.

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There has been a proliferation of IT applications and software for organisations since Covid-19. New software products are being conceived for businesses, governance and day to day lives of people around the world. Automation & software intelligence is being used for taking on administrative tasks, reducing manpower dependence and aid productivity for organisations. In such a scenario, the role of a software product manager is influential in shaping & building things for organisational success. 

A McKinsey study found that AI and deep learning couldadd as much as $3.5 trillion to $5.8 trillion in annual value for companies. Many companies are looking at automation and software applications for their business services. A recent study has revealed that on average, enterprises will develop and deploy 37 new applications in the next 12 months. This is an increase of 20.5% in the custom software applications than those deployed by enterprises today.

Companies of all sizes and industries are building custom software products and applications to navigate business challenges. They are using applications for managing their customers, business processes, finances, suppliers and employees. Software product managers will be at the help of affairs to build the right solutions to ace the organisational challenges. Here’s a look at some of the key skills required for a software product manager:

1. Understand Processes

To architect software applications and products, thorough understanding of business processes is extremely valuable. Product managers who lack understanding of the key business requirements often deliver software products that don’t meet the cut.

For building applications from the ground up, a good software product manager evaluates the difference between automation and manual efforts. It is often a good indicator of the value the product can bring for an organisation. If there is tangible improvement in the workflow, time and efficiency gains, product adoption becomes an automatic choice.

2. Technology Skills


You cannot build the products for the future with the skills of the past. The use of the right technology and tools to deliver software products is a must. The software product manager needs to understand the architectural aspects of building the product, business use cases, and overall technology landscape to address customer needs. 

The best software product managers have a know-how of the business needs and use technology to address those. They understand the context and the current technologies to address the business gaps. They are able to fulfill the needs of the customers using the right technology products.

3. Scope & Planning 

The scope of a software product is one of the key elements for its adoption. A lot of mediocre products have too much functionality that clients cannot use. A good software product manager understands customers, business use cases, resources available & builds things accordingly.

Great product managers eliminate features and nail the hard pressing needs of the customers. They are excellent at planning the scope, prioritising and dividing the large complex chunks into manageable milestones. They have the technical knowledge and the skills to manage the complexity of the projects, break down work, and make productive use of resources, most importantly development time.

4. Constructive Inputs
Good product managers understand the value of feedback and inputs for software product development. They engage with key stakeholders frequently and build feedback loops to address the product gaps. They are themselves tuned into the working of the product, analyse the other products in the market and are able to provide inputs to make the product significantly better than the existing ones.

Software product managers need to build strategic ways to communicate with customers using various channels. They need to be equipped with analytical abilities to understand market needs, features and customer priorities and communicate effectively with the teams.

5. Market & Competition Analysis 

You cannot build products in a silo. Good product managers understand the market and competition thoroughly. They know the competing products they are against and the customer choices. They position themselves favourably due to methodical and strategic execution.

The good product managers are able to find the gaps between what is available to customers and their needs. They address those needs. It could be simply superior or customised services, additional features or some new innovation. A top software product manager works with the marketing team to position the products and understands the core value proposition for the customers.  

6. Future Proof

One of the hardest things in technology is the need for constant reassessment, adaptation, rebuilding things and to stay relevant. Simply put, even if you have a great product that is loved by customers, you still need to keep an eye on the emerging technologies and trends.

Good software product managers understand the evolving needs to stay relevant and adapt fast. They are aligned to build things that are future proof, spot trends and enjoy longer shelf life than other products.

7. Product Ecosystem

To create a long term roadmap for a product, it needs to have a solid ecosystem. The product manager is responsible for measuring the KPIs for product performance in terms of retention rate of customers, product experience score, customer satisfaction score, design and intuitiveness, churn rate, conversion rate of customers, Net promoter score (Difference of Promoters and Detractors), feature usage, monthly active users etc.

Successful managers leverage technology to study and measure the most important KPIs for a product’s success. The key usage patterns and metrics are available with real time data. This data can be used for making decisions, building consensus and prioritising the roadmap for the product. A great product ecosystem and framework can mitigate risks, align teams and setup teams for success.

Kreyon Systems is helping companies with innovative software product development for their core business. If you need any assistance or have any queries, please reach out to us.

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