Measuring the performance of your product or business is a key part of business analytics. KPIs enable you to keep track of whether your product or business is meeting its goals, and if your strategies are effective.
But choosing the right indicators to measure is a challenge. Which KPIs are relevant, and will give you the most accurate view of your performance?
In this blog, we share tips on how to select relevant KPIs specifically for your product or business.
How to choose KPIs for your product
1. Less is more when gathering data
We need to address the all-too-common error business analysts make: measuring everything just because you can.
If your company has invested in a comprehensive analytical tool it’s easy to get overexcited and want to use it to its fullest. But not every metric is relevant when it comes to assessing the performance of your product.
You’re reading this because you know that you need to be more methodical and choose relevant metrics for actionable insights. Remember that, and save yourself a lot of time and energy.
2. Review the purpose of your product
How does your product aim to benefit your customer and/or the company?
Consider the products’ USPs (unique selling propositions). Is your product living up to them?
USPs are meant to appeal to your customers’ or clients’ needs and motivations, they are the drive of your marketing strategy and the reason why your customer choose your product over that of your rival.
For a B2B company, what business goals does the product serve? For example, is it built to improve efficiency, improve employee communication, mitigate human error, or simply generate revenue? Think about which key metrics can capture the products’ performance in these areas.
If your stated USPs are not reflected in the performance of your product, you’ll need to address this immediately to mitigate any resultant loss of trust, customer loyalty and ultimately loss of business.
3. Make your KPIs specific to your product or business
It might be tempting to duplicate KPIs from another product or to use KPIs that are standardised by your industry, but it’s not always appropriate.
KPIs that are somewhat standardised have their advantages – it’s useful for competitor intelligence to be able to easily compare performance. However, remember here that your aim is to measure performance concerning your specific business goals.
Don’t feel compelled to measure the exact same KPIs as your competitors. The most important thing is that they’re robust and relevant to your goals.
4. Employ both quantitative and qualitative data
Quantitative data, such as revenue and engagement, has the benefit of being easy to measure. These hard numbers are a good indicator of what’s going on, but they aren’t very useful in explaining why.
For more detail, use qualitative indicators such as online conversations and customer feedback surveys. This is an opportunity for businesses to practice what they preach – to listen to their customers and take action.
Collecting qualitative data keeps your most important success factor – your customer base – front and centre of your ongoing business strategy.
Qualitative data is infamously challenging to capture in large numbers, but that’s all changing with the help of advanced text analysis software and social listening tools. The Symanto Insights Platform combines the two to enable you to scan thousands of social media conversations, online reviews and surveys within minutes.
The Symanto Insights Platform then categorises text by topic and subtopic to identify what’s dominating the conversation around your product or brand. Its easy-to-navigate interface enables you to view all related conversations around a topic or subtopic so that you can quickly and easily find out what your customers are saying.
5. Choose actionable metrics
Avoid choosing vanity metrics that make you look good but don’t help you make decisions. Metrics such as page visits or app downloads don’t indicate much, if anything, about the success of your product, feature or strategy. There could be any number of factors affecting these stats. A more actionable metric might be referral rates, positive reviews, or per-customer metrics.
6. Consider changing KPIs over time
KPIs that were relevant at launch may no longer be as relevant at expansion, and some KPIs, such as customer lifetime value (LTV), only become measurable at later stages.
Don’t set your KPIs in stone. Review them and make changes depending on your stage of growth.
7. Use ratios
Here’s a bit of data analysis 101: raw counts can be misleading.
For example, let’s say over 100 customers reported bugs on your app this month, up from 50 last month. That would be alarming. That is until you learn that daily active usage tripled over the past month meaning there was actually a decline in bug reports.
When setting goals and measuring KPIs use ratios to get a more meaningful understanding of what’s going on.