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Valentina Gomez
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Key Product Development KPIs


Key Performance Indicators (KPIs) are key to evaluate Product Management procedures and Product Development success. Indeed, Product Managers and teams rely on metrics to track and analyze various aspects of their products, from customer acquisition cost to User Experience (UX) and customer satisfaction. Whether you are a Product Manager, part of a Product team, or simply interested in understanding the metrics that drive Product Development, this article will provide valuable insights into essential KPIs. Let's go! 

What is a Key Performance Indicator (KPI)?

Key Performance Indicators (KPIs) are metrics used by companies and organizations to measure success in reaching targets, such as the number of daily visitors on a website or the average time spent on the site. They can be seen as the compass that guides Product Managers and teams through Product Development. Yet, they're not simple data points: KPIs are carefully selected to align with businesses' goals to provide insights into the effectiveness of a Product Strategy.

With KPIs, teams can keep a pulse on average revenue, survey customer satisfaction, and steer the Product Lifecycle with precision. For digital product teams seeking to make data-driven decisions, KPIs are what leads them to provide great experiences, customer loyalty, and product quality.

Why is Tracking KPIs Important?

Tracking Key Performance Indicators (KPIs) in Product Development lets teams gain valuable insights into efficiency and productivity levels. Further, it's great identify any bottlenecks or delays that may negatively impact your Product Development cycle. Gathered data can be used to allocate resources more effectively and prioritize tasks based on their overall impact. Track your KPIs consistently to ensure your Product Development process runs smoothly!

How to Track Product Development KPIs? 

In Product Development, KPIs are assessed and measured within specific timeframes. Here, periods can range from weekly sprints to quarterly reviews or annual summaries. 

There are two main categories: strategic and tactical KPIs. While Tactical KPIs, like development velocity, focus on short-term efficiency, Strategic KPIs, like customer lifetime value, track long-term product health.For example, you might track the number of bugs fixed per week during a development sprint. If the number is consistently high, it suggests a need for more testing or code reviews.

Main Types of Product Development KPIs

Product Development KPIs are like vital signs of a product's journey to market success, acting like a beacon for Product Management teams and clearing the path to business goals and remarkable Customer Experiences (CX). Here, we can identify five main types of Product Development KPIs:

1. Period Metrics. Think of these as progress report cards. Period Metrics track how a product performs over specific periods, like quarters or fiscal years, revealing trends and growth patterns and allowing companies to measure improvement over time. For example, a social media app might track its Monthly Active Users (MAU); a steady rise in MAU over several quarters indicates successful user acquisition and product adoption.

2. Revenue Metrics. These metrics showcase the financial health a product sparks, with Return of Investment (RoI) as the most known one but including also Average Revenue and Revenue Per User. An e-commerce platform, for instance, might focus on Average Order Value (AOV), with a rising AOV meaning customers are spending more per purchase, indicating product value and potential for upsellin.

3. User Metrics. User KPIs shed light on how users interact with the product. They gauge user engagement and tell you if your product is sticky or just collecting dust in the digital drawer. If a fitness app chooses to track Daily Active User, it could compare it to MAU; a high DAU compared to MAU suggests users are consistently using the app for workouts.

4. Cost Metrics. Within KPIs, cost assess how efficiently can a company acquires new users. These metrics help maintain a healthy balance between investment and customer growth. An online learning platform, for example, might calculate Customer Acquisition Cost (CAC), which divides marketing expenses by the number of new customers acquired. A low CAC relative to customer lifetime value indicates efficient user acquisition.

5. Satisfaction Metrics. These KPIs focus on the emotional connection users can have with a product, measuring user satisfaction and gauging loyalty, ultimately highlighting their desire to stick around. A customer support software company might track Customer Satisfaction Score (CSAT). High CSAT scores signify happy customers who are likely to recommend the product and remain loyal.

Top 5 Product Development KPIs for 2024

Ket's explore the top KPIs that every Product Development team should track.

1. Time-to-Market (TTM) KPI

In Product Development, time is key, and Time-To-Market (TTM) makes it easier to keep tabs on monitoring the time it takes for a product to go from ideation to launch. This KPI allows you to identify any bottlenecks or delays in the development cycle, enabling you to take corrective actions and streamline your processes.

How to Calculate Time-To-Market (TTM)? Simply subtract the date you first conceived the product idea from the official launch date. A lower TTM indicates a more efficient development process that gets your product to market quickly. Time-to-Market TTM Formula: TTM = Launch Date - Ideation Date.

2. Return On Investment (RoI) KPI

While launching your product is important, ensuring your efforts are financially rewarding is equally crucial. That is where the Return On Investment (ROI) KPI comes into play! The well-known ROI lets you know whether your investments generate the desired returns, and further make informed decisions about future investments. 

How to Calculate Return on Investment (ROI)? To know your ROI, first determine the total gain from your product launch (sales revenue minus any ongoing costs). Then, subtract the initial investment cost (research, development, marketing) from the gain.  Divide the resulted number by the investment cost and multiply by 100% to express it as a percentage.  A positive ROI indicates a profitable product development endeavor. Return on Investment ROI Formula: = [(Gain from Investment - Investment Cost) / Investment Cost] x 100.

3. Product Quality KPIs

You can ensure your products meet customer expectations by monitoring Product Quality in the form of defect rates, customer complaints, and satisfaction levels. These KPIs allow you to identify improvement areas in Product Development to take proactive measures that enhance your offerings' quality. You can calculate quality, for instance, by gathering the number of customer complains, separated by channel, within a specific period of time. Analyze its trend to know how customers perceive your product in terms of quality!

4. Customer Satisfaction KPIs

Customer Satisfaction isn't just about smiles and thank-you notes, it's the core of your product's success! Satisfied customers mean more business, glowing recommendations, and a less bumpy road to achieving your business goals. You can gauge how well your products meet customer needs by tracking Customer Satisfaction KPIs such as Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), or Customer Effort Score (CES). 

Have you ever received a survey after a purchase saying something along the lines of "On a scale of 0 to 10, how likely are you to recommend [Product/Service] to a friend or colleague"? That's Net Promoter Score over there! NPS gauges the likelihood of a customer recommending your product, and categorizes the answers into three groups based on their score:

First, there are Promoters (9-10) who are very likely to recommend your product. Likewise, Passives (7-8) are neutral customers who might or not might recommend you, and Detractors (0-6) are unhappy with the product (even inclined to give bad reviews when asked!) To know your Net Promoter Score, subtract the percentage of Detractors from the Promoters one. An NPS of above 70 is considered excellent and, while 50-69 is good, any score below 50 shows there is a wide room for improvement. Net Promoter Score NPS Formula: NPS = (% Promoters) - (% Detractors).

5. Customer Retention Rate KPI

Customer Retention Rate (CRR) is a telling indicator of product appeal and long-term viability. It's not just about acquiring new customers; keeping the ones you already have is crucial! The percentage of customers who stick with you over time can give you great insights into behavior and satisfaction. While high active user count and retention rates signal positive CX, a high churn rate can be a red flag that needs immediate attention. By monitoring these figures, Product Managers can make a data-driven approach to enhance customer loyalty and, in turn, drive up product performance and revenue.

How to Calculate Customer Retention Rate KPI? Divide the number of customers at the end of a specific period by the number you had at the beginning of that period, and multiply the latter number by 100 to express it as a percentage. Customer Retention Rate Formula: CRR= [(Number of Customers at End of Period) / (Number of Customers at Beginning of Period)] x 100.

Challenges in KPI Tracking for Product Development

Let's explore some common challenges and how to overcome them.

KPIs and Business Goals

Aligning Key Performance Indicators with overall business goals from scratch can make or break your strategy! Review your KPIs regularly to reflect your current objectives and targets accurately to stay on track and drive success. By doing so, you can measure your progress toward achieving goals and make informed product decisions to drive your business forward. For instance, if your business aims to increase market share, you might want to track KPIs such as Market Penetration Rate, Customer Acquisition Cost, and Customer Lifetime Value.

KPIs and Data Management

With so much data available, it's easy to get overwhelmed. To overcome data overload, focus on the KPIs that align directly with your objectives and goals. Filter out the noise and prioritize the KPIs that provide the most meaningful insights for your Product Development process! If your goal is to increase customer satisfaction, you might want to track Customer Feedback Scores or Customer Retention Rates

Further, data accuracy is crucial for effective KPI tracking, so ensure you have all needed processes and systems to collect accurate and reliable data! Take the time to verify and validate the data to guarantee accuracy and integrity. Away to ensure data accuracy is by implementing validation checks at various stages of the data collection process, like cross-referencing data from multiple sources, conducting regular audits, and automated tools to detect inconsistencies or errors.


By measuring and analyzing Key Performance Indicators (KPIs), teams can gain valuable insights into products' effectiveness and identify areas for improvement. From Time-To-Market to Return On Investment, tracking KPIs allows for smoother and more efficient Product Development while ensuring sustainable long-term growth. Want your products to get the right KPIs from scratch? Well, we have the needed tools to take it to the next level!