I’m pretty sure you’ll agree with me that being a Product Manager can be a tough assignment. And in these increasingly uncertain times it’s probably getting harder — product managers are under greater pressure to build better products, faster.
You’re responsible for a whole bunch of business-critical stuff from identifying the customer need to establishing the broader objectives that specific features will fulfil, from articulating what success looks like for your product to developing a realistic roadmap and keeping it on track… and then you have to ensure that your team turns that vision into a reality (the Product Focus 2023 Survey of the Product Management Profession is worth a read if you want to see what challenges you and your peers are facing). And no doubt your ability to deliver in these areas is being measured through key performance indicators (KPIs) relating to user and customer engagement.
In this article we’ll look at how you can leverage user feedback and a platform like Userback to meet 10 typical product management KPIs in areas such as:
Meeting product management KPIs can be challenging, especially as a lot of your performance is based on how effectively your whole team can build a product that people love — usually at speed and at scale — not solely on your performance as an individual. At Userback we feel your pain!
We understand many of the challenges you face because on our own journey to create a market-leading user feedback management platform for product managers and software teams… well we’re a bunch of software developers and product managers too!
In our quest to meet your user feedback needs, we have successfully overcome many of the challenges you face ourselves — I’m pretty sure our product manager has similar KPIs to yours!
We know that successful product management lies in your understanding of your users. Your relationship with them determines the product you are building and shapes how it is used and sold (read more about Userback for Product managers here).
When it comes to KPIs, something we love about user feedback is that it can simultaneously help you to measure product management KPIs and get actionable insights into what you need to do to improve them.
We have covered the various types of user feedback in this previous article and in this article we look at how user feedback goes way deeper than the traditional metrics of page visits, clicks, and time on site to give a more realistic view of how well you are delivering a user experience that delivers both to users and to your organization, for example:
User acquisition rate
How many new users are signing up and how quickly?
User acquisition is not just about how making sure as many people signing up to use your product, it’s also about ensuring they do so quickly.
User feedback is a great asset when it comes to acquiring new customers as you can leverage positive feedback (like comments, stories and reviews) from your existing users in your marketing. This kind of user feedback can highlight the benefits to people who are thinking about using your product, and allows them to see how your product can add value in their life or work.
In terms of speed of acquisition, user feedback helps you to see where there may be friction in the sign-up at any stage between the awareness and actual transaction stages. For example
- Do people think your demo helps to show what you do?
- Is your sign-up process fast and simple?
- How do people feel about providing credit card details before they can access a free trial?
This user feedback helps you identify and remove friction and barriers in sign-up process and maximize your user acquisition rate.
Average revenue per user (ARPU)
How much are users spending on your product?
OK, now you’ve got people using your product you need to ensure that they are generating revenue for your business.
Capturing and monitoring user feedback helps you to:
- Understand what it would it take for them to spend more or spend more frequently and how much they’d be prepared to pay.
- Identify areas of your product where their needs are not being fully met and see how you can create features that they are prepared to pay for!
- Work on any areas of your product that are not being utilized fully and direct users towards them with guides and nurture campaigns designed to meet their specific needs.
By better understanding what people want and how they behave within your product, you can maximize the average revenue per user.
Feature adoption rate
How quickly are users adopting new features in your product, and do they keep using them?
So you’ve built an awesome new feature or piece of functionality (at least you think so!). You need to ensure that users are quick to learn about, trial and regularly use it.
User feedback can highglight any barriers or bottlenecks in the adoption process. For example was it easy to find the new feature and understand how it added value to their experience?
As users start to use a new feature, you can include their positive feedback in marketing and onboarding communications to encourage more people to try it out.
But getting users to new features is only half the story. Having used it once or twice you need to understand whether or not they will continue using that feature. Was it easy for them to find the feature? Was it intuitive? Did it add value? Will they use it again (and again, and again, and again…)? If not, why not?
By collecting and evaluating this kind of user feedback you can identify and remove any barriers or bottlenecks from the onboarding and adoption of these features and functionality and maximize your feature adoption rate.
Product usage, engagement and conversion rate
What percentage of users are actively engaging with the product on a regular basis and how often are users returning to use the product over time? Are users completing the desired actions or goals, such as purchase, sign up or any other action?
Successfully getting lots of sign ups is one thing, but making sure that people are actually engaging with your product and using it is another!
When you can identify the users who are actively using the product frequently, you can engage with them and get their feedback about what it is that keeps them coming back. You can then use these insights to communicate with users who are using the product with less frequency and to encourage them to be more active — whether that be through simple education or incentives such as rewards.
You can also engage directly with less active users to understand what lies behind low or irregular usage. Their feedback allows you to identify ways in which to increase frequency — which may include the development of new features and functionality, changing pricing models, providing more comprehensive support materials or simplifying the onboarding processes to increase your product usage and engagement rate.
Within your product there will be many different types of transactions that ultimately add up to your long-term success! Managing user feedback can help you to understand why these events may be taking too long or not even happening at all. These insights can then be used to identify barriers and how you can remove any friction from the process to improve your conversion rates.
Churn (or retention) and refund rate
Once they are signed up, are users and customers sticking around?
Reducing churn is critical to success — having a high user acquisition rate is great, but you don’t want to see all that hard work offset by a high churn rate at the other end.
User feedback can help you to identify why people may be leaving your product. If you can capture their feedback as they leave it can really help to understand how you might be failing to meet their needs or how another product may be delivering greater value.
When you identify reasons for churn you need to act upon them quickly to minimize the damage. This is always important, but especially so if you are financially vulnerable if you have terms that offer refunds to customers who leave your product before their subscription cycle is complete.
It goes without saying that churn is bad for business, but when you understand it you can act with insight and certainty to increase your retention rates and reduce refunds.
Reactivation rate
How often are dormant users coming back?
Sometimes users continue to subscribe or stay signed-up for a product but simply do not use it. It might be that they have forgotten about you or perhaps the person in a business who signed up has left and the subscription keeps ticking over.
Whatever it is, it’s not good to have people signed up for your product and not using it (they’re called ‘users’ after all!). Sure you may be getting some revenue, but that revenue may be based more upon user inaction rather than your action.
To maintain a healthy user base you need to identify dormant users and get their feedback as to why they are inactive so that you can reactivate their engagement, and use these insights to reactivate other dormant users and accounts.
That reactivation may be as simple as reconnecting with them, or you may need to communicate new features or include some kind of incentive to get them going again.
Bugs and defects
How often do bugs or defects pop up within your product and how long does it take to resolve them?
This is obviously a pretty major indicator of performance as it reflects the reliability and quality of the product that you have built.
Bugs are part of life and every digital product will have them. The important thing is to be able to identify them and get them fixed as quickly as possible to minimize any impact to your users and your business.
User Acceptance Testing (UAT) and bug reports are the two main feedback sources for highlighting specific functionality issues within your product.
When users can provide visual and contextual UAT and bug feedback then developers get all the background information that they need to understand exactly what was happening and to fix it fast.
When you include users in the loop — by acknowledging their feedback and then continuing to update them on its assessment and resolution — then this develops a closer relationship with them, in turn helping to boost other performance measure like retention rates and average revenue per user.
Read more about how Userback accelerates Bug Fixing and streamlines User Acceptance Testing.
Product-Market Fit score
How well does your product match the needs of your target market? Is it increasing or decreasing over time?
Product-Market Fit is that critical point when you know you have created something that people really want and that they are willing to pay for.
Effectively managing the user feedback lifecycle allows you to identify any barriers or friction that may lie between where you are right now and the optimal product-market fit.
As if things weren’t hard enough already, these days product-market fit is not a static end point! It is a dynamic and constantly moving set of goal posts. To keep up you need to be able to regularly engage with users to learn what they like or dislike about your product and then you need to be able to act quickly to make the necessary updates to keep ahead of the competition… and to keep both your users and your stakeholders happy!
User and customer satisfaction
Are users satisfied with your product and what is it specifically that they would recommend or where is it missing the mark?
This is arguably the most important metric when it comes to user engagement! Customer satisfaction is a measure of whether your users are happy with your product and whether or not they would recommend you to others. It’s typically based on your Net Promoter Score® (NPS) or Customer Satisfaction (CSAT) score.
It’s pretty easy to see the role that user feedback has to play in measuring and improving customer satisfaction. You can use CSAT and NPS to know what makes users happy and target areas where user needs are not being met.
Net Promoter® and NPS® are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
Product roadmapping
Does your product roadmap meet user needs and how quickly are you able to complete roadmap items?
The product roadmap is a key part of the product managers role as it outlines your vision for the product and how it will meet users’ needs.
Collecting and managing user feedback ensures your roadmap meets genuine user needs and gives you the information you need to prioritize the items that add most value.
Visual and contextual feedback give you the information your developers need to fix issues and introduce functionality faster through more detailed bug reports and feature requests.
For more information about roadmapping check out this guide:
By making your product roadmap publicly available to your users you can deepen your relationship with them. This can be amplified further when you allow them to have their say in what features and functionality you should prioritize, in effect allowing you to bring your users in as partners in the development of the product, giving them a sense of shared ownership. This approach can significantly assist you in meeting many of the KPIs listed above.
By monitoring qualitative and quantitative KPIs, you will be able to gain a better understanding of your product’s performance, as well as how users are interacting with it. Armed with this knowledge, you can make more informed decisions about roadmap items and user experience optimization.
Summary
KPIs and user feedback are increasingly becoming entwined. As a product manager there are many performance metrics that you need to meet. A lot of your ability to effectively measure or improve these KPIs is connected to your ability to manage user feedback effectively.
More reading
If you enjoyed this article then you might find these other articles interesting:
About Userback
Userback is a market-leading user feedback platform helping 20,000+ software teams to understand what customers need so they can build better web applications, faster.
Userback streamlines and automates the realtime in-app collection, evaluation and management of visual feedback and contextual surveys. Userback can be used standalone or seamlessly integrated into existing business workflows to allow product managers and developers to validate ideas, optimize product-market fit, refine roadmaps, prioritize features, fix bugs and deliver value with greater insight, impact and efficiency.
Start with a free 14 day trial at https://app.userback.io/signup/
*A note about the difference between users and customers
The words ‘customer’ and ‘user’ are often used interchangeably, but there is a difference between the two. Customers are people who purchase your product or service. Users are people who interact with and use the product or service. Often the customer is the user, especially when you are selling to individuals. However, in some situations, such as business or education, the customer may be someone who is purchasing on behalf of many users without actually being a user of the product themselves.
