Top 10 Product Marketing KPIs Every Marketer Should Track

Product marketing is becoming increasingly crucial in a constantly changing and exciting industry. But how do you even know if you’re successful with all the data coming in? In this article, we’ll dive into the top product marketing KPIs and metrics you need to know to improve your all-round product marketing game and stay ahead of the competition.

What are Product Marketing Metrics/KPIs?

Metrics are the indicator of a successful product marketing plan. Therefore, product marketing KPIs are the essential metrics you track to measure the effectiveness of your product marketing campaigns. In other words, they show you what’s working and what’s not so you can work on those that need improvement. 

Analytics tools help you track these metrics, giving you the insights you need to refine your strategies and improve profitability.

Basic SaaS Metrics and KPIs

To track the success of your efforts, you need to identify and measure the right metrics and KPIs. Let’s start with some basic metrics every product marketing team should track:

MRR (Monthly Recurring Revenue)

The business’s revenue constantly fluctuates, especially every month, because of the nature of subscription models, such as getting new signups and current customers churning.

Having a good look at your MRR can help product marketers figure out how much revenue you’re really retaining and if you need to level up your customer acquisition and retention game.

To calculate MRR, multiply the number of monthly customers by ARPU.

Monthly Recurring Revenue (MRR) = Number of Monthly Customers x Average Revenue per User (ARPU)

LTV (Customer Lifetime Value)

LTV predicts how much revenue a business can expect from a customer throughout its relationship with them. You want to calculate this because you want to plow back at least the money you invested in acquiring the customer and hopefully make a profit from them.

Calculating LTV can be tricky, but a more straightforward method most businesses use for a single user or group of users is by adding up the revenue you’ve made from them and then subtracting the acquisition costs.

CAC (Customer Acquisition Cost)

CAC refers to the cost of acquiring a new customer. It measures how much a company spends on marketing and sales to convert a potential customer into a paying customer. 

This metric is frequently compared to the LTV to determine the profitability of a specific period for a business. 

CAC = Cost of Sales and Marketing in a period / Number of New Customers in exact period.

NPS (Net Promoter Score)

It’s a fantastic way to measure customer loyalty and satisfaction. The score predicts how likely customers will recommend your product. 

It’s based on one question we’re pretty sure you’ve come across before: “On a scale of 0 to 10, how likely are you to recommend us?“

Customers who respond with 9 or 10 are classified as “Promoters,” while those who respond with 7 or 8 are “Passives,”. Customers who respond with a score of 0 to 6 are called “Detractors.”

NPS = % of Promoters – % of Detractors

Early Churn

Early churn occurs when users stop using your services within 30-60 days after signing up. It differs from regular churn, which happens later in the process. 

Retention is vital to product marketers, so early churn is a warning sign that something’s not clicking with customers. Maybe they’re finding it difficult to use, or they’re just not realizing the value of your product. That’s why quickly addressing early churn is so critical.

Customer Retention Rate

Customer Retention Rate (CRR) measures how well you can retain your customers. It’s an essential metric for product marketers as it drives promotional strategies that increase revenue, better cash flow, and improve company image. Plus, it’s closely linked to building and assessing customer loyalty.

To calculate the customer retention rate, subtract the number of new customers acquired within a given period from the total number of customers in the same period. 

After that, divide the result by the number of existing customers at the start of that period. Finally, multiply the obtained figure by 100 to get your CRR.

CRR = ( (E – N) ÷ S ) x 100

where 

E = number of total customers at the end of a specific period

N = number of new customers within a particular period

S = number of existing customers at the beginning of a particular period

Conversion Metrics and KPIs

Product marketing managers play a critical role in driving conversions. They inspire the target customer to take action with the right marketing message and a clear CTA.  

Tracking conversion rates will help you know where users are disengaging so that you can focus on improving and optimizing the user experience in those areas.

Here are four conversion metrics and KPIs for you to check out:

Visitors-to-Free Trial Conversions

If you’re wondering how effective your go-to-market strategies are, check your free trial conversion rate. A successful product marketing strategy will drive visitors who discover your product to take that next step to sign up. 

This percentage represents the number of visitors who signed up for your free trial.

Visitor to Free Trial Conversion Rate = 

(Number of free trial signups / Total number of visitors on the signup page) x 100

Free trial-to-PQL Rate 

For PLG companies, this is a crucial revenue metric. Product-qualified leads (PQLs) are the users taking product actions that show they’re realizing the value of your product. It gives you a hint that they are the ones most likely to upgrade. 

To calculate your free trial-to-PQL conversion rate, you need to divide the number of users who became product-qualified leads by the total number of users who signed up for the free trial.

Free trial-to-PQL rate = (number of PQLs / number of free trial signups) x 100

Free Trial-to-Paid Conversions

The free trial to paid conversion rate measures the percentage of free trial users who opted to pay for your product. It’s calculated by dividing the number of users who converted after the free trial by the total number of users who signed up for the trial.

Free Trial-to-Paid Rate (%) = (number of trial users / # of converted trial users) x 100

User Onboarding and Adoption Metrics

Product marketing goals often involve user onboarding campaigns to get the user to activate as quickly as possible. That’s why product marketing managers care deeply about user onboarding and adoption. 

Let’s look at some relevant metrics here:

Activation Rate

A high activation rate means your product onboarding is effective and helps users realize value faster. To calculate your activation rate, determine which in-app events will act as “activation milestones.” When a user reaches these events, they will count as an “activated user.” 

Then, calculate the activation rate by dividing the number of activated users by the number of users who signed up for your trial and multiplying it by 100.

Activation rate = (# of activated users/# of signups) x 100

Product & Feature Adoption Rate

Product adoption rate shows the percentage of individuals who first tried out your product and continued using it frequently, indicating that they’ve adopted it. It’s directly related to retention and hints at how sticky your product is for new users.

Feature adoption rate tells how often a specific product feature is being used. It contributes to the broader goal of product adoption in two ways. First, it shows you which feature is most valuable to users. Second, you can know how many features are adopted (aka breadth of adoption). The more features are adopted, the more likely users will adopt your product. 

Product Adoption Rate = (# of New Users / Total # of Users) x 100

Feature Adoption Rate = # of monthly active users using a specific feature / # of users logging in within same period

Time-to-Value (TTV)

Users are always eager to find value in a new product, but when they can’t discover that value quickly, they easily get frustrated and lose interest. That’s why TTV matters. 

TTV measures how long it takes a user to experience value from your product. The faster your product solves users’ unique pain points, the better the customer experience, which can improve the customer’s lifetime value (LTV). Ideally, you want this figure to be low. 

Engagement Metrics and KPIs

When you nail your product messaging, it encourages users to interact with your product to find out how it delivers on its promises. The more engaged users are with your product, the more familiar they get with it and the more loyal they’ll become.

Monthly Active Users (MAU)

The number of unique users who log into your product in a month. It’s a big indicator of how well you’re retaining users. 

MAU = Total sum of each month’s unique users / 12

Daily Active Users (DAU)

DAU is the number of unique people who use your product daily. 

To get DAU, add up each day’s unique active users. Then, divide by the number of days in the month. 

DAU = Total sum of each day’s unique users / Number of days in the month

Product Stickiness

Stickiness is your product’s ability to keep customers coming time and time again because they find your product truly valuable. You achieve this by building a user experience that seamlessly integrates your product into the customer’s workflow, making it an indispensable part of their daily lives. 

Divide your daily active users by your monthly active users to find out your product stickiness.

Product Stickiness = DAU / MAU

Pages/Clicks/Actions Per Session

• Pages per session is the average number of pages users visit in one session. You can calculate it by dividing the total number of page views by the number of sessions. 

• Clicks per session is the average number of clicks a user makes in your app. To calculate this, you divide the number of clicks by the total number of sessions. 

• Actions per session refers to the average number of activities a user takes per session. To get it, divide the number of activities by the total number of sessions. 

Pro tip: If these metrics have a high average, it’s a sign that your product has great UI/UX elements, making users engage for longer.

Conclusion

KPIs allow you to optimize your product marketing performance and achieve maximum results. 

You don’t have to fly blind. Use analytics tools like Userpilot to track these key metrics and get insights into your strategies to help you improve your acquisition, adoption, and retention rates.