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App Development
7 minutes read

Important KPIs for Product Managers to Track

By Robert Kazmi
By Robert Kazmi
App Development
7 minutes read

There are several important KPIs for product managers to track as they monitor the performance of their mobile apps, websites, or other software solutions. Of course, product managers cannot afford to ignore the data collected about their digital products and users, but they might struggle to determine which metrics are key performance indicators.

This post will explain what KPIs are and cover some of the most common and impactful metrics for product managers to track. 

What Are KPIs? 

KPIs (key performance indicators) are likely a term you have heard. However, do you know the difference between a KPI and a metric? All KPIs are metrics, but not all metrics are KPIs. A metric is considered a KPI if it covers a core business goal. For example, if one of your company’s core objectives is to increase online sales by 20 percent, your website’s conversion rate would be a KPI. 

Just because a metric is not a KPI does not mean it is not significant. For example, while increasing web traffic might not be a core objective of your business, the new visitors metric is still an important metric to track when analyzing the progress of your website and brand. Any metric can be a KPI. The metrics that are KPIs for your company are up to the discretion of management and will be based on the specific objectives of the business. 

In addition to tracking progress and goals, product managers should utilize KPIs to test new ideas and improve product offerings. Keep in mind data is of little value if it is not acted upon. Therefore, choosing the right KPIs is vital to building an effective product roadmap that will lead to long-term success. 

Important KPIs to Track

The KPIs that will be important to your business might differ from competitors and peers, and there is nothing wrong with that. We are going to explore some of the most common KPIs that are important to businesses. However, this doesn’t mean that all of these KPIs will be important to your business. Establish core business objectives, and the key performance indicators most important to your business should become apparent. 

In the meantime, some of the most common KPIs product managers focus on include: 

  • Customer lifetime value 
  • Customer acquisition cost
  • Monthly recurring revenue 
  • Average revenue per user 
  • Traffic
  • Daily/monthly active users
  • Net promoter score 

Customer Lifetime Value 

Customer lifetime value is a metric that measures how much revenue a business can reasonably expect to generate from a user throughout their patronage. The term lifetime describes the average time a customer spends purchasing products from your business or subscribing to services. Organizations and product managers use customer lifetime value for financial forecasting and planning the stability of their business. 

Besides financial forecasting, customer lifetime value is an important metric to consider when determining how much money and time should be spent on efforts to attract and retain customers. Product managers don’t want to spend more attracting and retaining customers than they are generating from them. 

Customer Acquisition Cost 

Customer acquisition cost is a metric measuring how much it costs to attract and gain a new customer for the business. Not only does customer acquisition require money, but it also requires time, effort, and sometimes additional resources to turn leads and prospects into paying customers. Some things that might affect customer acquisition costs include sales and marketing team salaries, advertisements, marketing software, etc. 

The hardest aspect of customer acquisition cost to measure is employee time and effort. Yes, this is partly measured by the cost of their salaries, but it is difficult to accurately measure how much of their time and effort is spent on this task when it could be used in other ways. However, the customer acquisition cost is an important metric used in tandem with customer lifetime value to ensure that customers generate enough revenue to justify the cost of acquiring them. 

Monthly Recurring Revenue 

Monthly recurring revenue is a metric measuring a business’s predictable revenue streams. The monthly recurring revenue metric is great for product managers with a subscription-based product because these sales differ from one-time transactions and are far easier to predict.

Product managers use monthly recurring revenue to measure business growth or decline monthly. With monthly recurring revenue, leaders can clearly understand how users upgrade, downgrade, or cancel their subscription services. As a result, they can plan to make adjustments or offer special incentives month over month if they are losing revenue or subscribers. 

Average Revenue Per User 

Average revenue per user is similar to customer lifetime value, but it differs. Average revenue per user measures how much revenue a company can expect from a single user. This metric is on a short-term basis as compared to customer lifetime value, which takes a long-term view. 

Product managers can get more value from this metric by segmenting their customer base to determine which groups generate the most revenue. Then, with this knowledge, the product can be optimized and geared towards the audience that is generating the most revenue for the business.


Traffic is a metric mostly used for websites, although applications use number of users, which is a similar metric. Traffic measures the number of people who visit a website from all customer acquisition channels such as organic search, social media, paid ads, etc. The value of the traffic metric is in segmentation. 

Understanding where customers come from informs product managers how successful their paid ad campaigns or SEO efforts have been. Using this information, they can choose to invest more time and effort into paid ads, SEO, social media, or whatever channel they believe will generate the most valuable traffic for their product. 

Daily/Monthly Active Users 

While the number of users or subscribers is an important metric, it doesn’t tell the whole story. The active users metric illustrates how many people are actually using and interacting with your organization’s product. Typically, product managers will benefit from looking at daily and monthly active users. 

However, for some businesses, yearly active users might be a better metric to measure the success of their efforts. For example, a mobile game product will look more closely at daily and monthly active users, whereas an app like Airbnb, which doesn’t get used by people every day, will benefit more from yearly active user figures. 

Net Promoter Score 

Net Promoter Score (NPS) measures the number of people who would recommend your business, service, or product to others. Obviously, a high NPS means that your business is doing something well and pleasing customers. On the other hand, a low NPS can help alert product managers that something within the User Experience is amiss. NPS is often used to measure the popularity of app design choices, features, functions, etc., and serves as an important metric when it comes to making important product decisions. 

Final Thoughts 

There are other metrics than the ones we have covered in this post that might be key performance indicators for your company and products. However, most, if not all, of the metrics covered here will be important indicators of your company’s performance. If you want to learn more about KPIs for product managers to focus on or need help determining which metrics mean the most for your business, reach out to an experienced app development partner.

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