What gets measured gets managed!
The title of the blog is a famous quote by Peter Drucker from his 1954 book titled, “The Practice of Management.” The quote has been repeated so many times since then that it has almost become a cliche.
Having said that, this quote is so relevant for a product manager. Why is it relevant? Here are a few interesting points to support my case:
- In one of my earlier essays (Titled: Separating noise from the signal (Part 1)!), I touched upon multiple sources for your product requirements and one important source (for existing products or consumer-facing products) is Metrics.
- Imagine, you are trying to build a product to solve a very important problem (always remember: put the problem before the solution) and you know the user groups that will benefit from this problem, how will you measure your success? The answer is Metrics.
- Now, let’s say you have a product that solves a problem for a specific category of customer (e.g. small enterprises) and you see a good opportunity to scale the product (function & feature-wise) for another type of market (e.g. medium enterprises); do you want to decide that based on your gut/hope or do you want to take a data-driven decision? I am sure the answer is later, the magic word once again is Metrics.
I am sure you will knock out many many examples like the ones detailed above and convince yourself that data-driven product management is the most scientific way of deciding new products, checking out performance of an existing product, deciding new market segments, etc. Does the quote “ What gets measured gets managed!” makes sense now?
Yes, it would be my answer and I am sure you will agree with the same. If you don’t know the method/framework to measure your outcome then there will be challenges as everything conversation will be qualitative in nature (don’t get me wrong, a qualitative conversation is important but it cannot be the only decision-making methodology. Quantitative insight must augment any qualitative perception).
There are different types of metrics and I have listed a few below for your reference:
- Growth and activation metrics (measures the growth rate, adoption rate of your product): Total new users, New users by source, Number of activations are a few examples.
- Retention metrics (measures how well you are able to retain or resurrect the users of your product): Returning users, Resurrected users are few examples.
- Engagement metrics (measures how well your users are engaged with the product or how well they use the more critical functions/features of your product): Time spent on site, Number of messages sent, Number of clicks on content are few examples.
- User happiness metrics (measures the happiness quotient of your customers/users): Net promoter score, App downloads, Number of net new user recommendations for a few examples.
- Revenue metrics (is a measurement of entropy in the product that contributes directly to the revenue of your product): Lifetime value of customers/users, Weekly/Monthly recurring revenue, Cost of acquisition are few examples.
Whilst this is not a complete list, it definitely gives you a decent insight into why are metrics important? Why can’t a product manager live without metrics? and Categories (& examples) for metrics. In the next write-up, I shall cover a few interesting frameworks proposed by industry experts to structure the metrics conversation.
More about this topic in future essays!
Originally published at https://www.raghsforte.com on September 19, 2019.