A great product manager can be an essential element to the success of your business. Product managers are integral for identifying customer needs and helping to identify and strengthen the connection between your newly developed product and your overall business objectives, often through the lens of Objectives and Key Results (OKRs).
You want to know what purpose and intention your product or feature will fulfill, and how you’ll measure its success. As a leader and professional collaborator with a vision, a successful product manager will rally your team to strive for goals that match the projected journey for your company. Oftentimes, this comes in the form of a roadmap or a multi-year strategic vision.
Of course, as with many elements in business, it can be difficult to tell what is leading you to success and what could be hindering it. Obvious wins may have not-so-obvious reasons behind their success. In turn, failures may come about for several, unseen reasons.
How can you measure the productivity of your product managers (PMs)? Here are some key approaches to measuring product manager productivity that could enhance your product organization and allow you to get ahead faster.
Caution: product failure != product manager failure
It’s true: you can't necessarily tie a product’s performance to that of your PM. You may have the best PM in the industry but be promoting the wrong product at the wrong time. Even magicians have their limits.
In many cases, however, a weak performance from your PM organization can definitely reduce your chances of having your product meet with success. Before diving deeper into how to gauge PM success, let’s first look at the best ways to measure product success, as this is a bit more tangible.
The role of KPIs
To measure how successful a product is, companies often turn to key performance indicators (KPIs). Some examples of well-known marketing KPIs related to online interactions include:
- Monthly recurring revenue (MRR)
- Customer lifetime value (CLTV or LTV)
- Customer acquisition cost (CAC)
- Daily active user/monthly active user ratio
- Session duration
- Traffic (paid /organic)
- Bounce rate
- Retention rate
- Churn rate
- Number of sessions per user
- Number of user actions per session
- Net promoter score (NPS)
- Customer satisfaction score (CSAT)
Online KPIs can be measured through user behavior using analytics programs like Google Analytics and Mixpanel. When you launch an online marketing campaign, for example, you can measure how people use your company’s website, and where your purchases are coming from. This is a good example of a proxy metric.
The type of KPIs you choose to use depends on the type of product or service you’re offering. It also matters and at what stage of development your product is in.
For your metrics to be meaningful, they need to be actionable, as well as auditable, and accessible. Your data will do nothing without you. Once you analyze the results of measuring your KPIs, you want to use this information to tweak your product to drive more adoption and higher customer satisfaction levels.
Yes, it’s all a bit of an art and a science. A good metrics system can provide you with invaluable information, however. KPIs can help you carve out the right path for a product and provide you with much-needed guidance. Perhaps you thought younger people would form the majority of your customer base. KPIs and general metrics collected might reveal that most of your customers are actually 40 and older. This can help you better target your audience in the future and lead to increased sales opportunities and product adoption.
What else can KPIs do for you? Metrics can also act as an early warning system. They may highlight a part of your product that doesn’t work for your customers. It can be easy to take momentary success for granted but markets change and so do the needs of your users. Measuring KPIs can allow you to change course when you most need to by providing you with the science behind the curtain.
PM performance and KPIs
So, how can you apply KPIs to your product manager’s performance? A product manager who doesn’t identify and follow the right set of KPIs to measure for your product could jeopardize its future. Your PM should be measuring KPIs that:
● Connect to your business goals (e.g. tie back to an OKR)
● Increase the lifetime value of your customers
● Are aligned with your overall business objectives
● Fuel data-driven business decisions
Product KPIs that aren’t helping to create a pathway for your product and business to travel are, simply put, a waste of time to measure and track. In addition, a product manager who doesn’t take the time to reflect on valuable KPI data to connect the dots for your product and create actionable insights and plans isn’t going to help the company or product move forward.
What else can you turn to when trying to assess the effectiveness of your PM? Look to your competitors, your internal communications systems, and what their colleagues have to say about them.
Measuring adjacent activities
In addition to evaluating if your PM identifies and measures the product’s success with KPIs, you should also look at how they’re evaluating your competitors and what type of intelligence they gather. Are they communicating well within your organization, keeping on top of your competitors, and growing their knowledge?
Your PM should be engaged in meaningful competitive intelligence analysis. This is key and can involve many steps. Your PM should:
● Identify your competitors
● Track your competitor’s digital footprint
● Gather intel and data related to your competitors
● Draw up a competitive analysis
● Turn the data into actionable results
Identifying your competitors
How can you start? Keep it simple. You might have hundreds of competitors or maybe just a select few. Your PM should start by identifying your top 5 most threatening competitors, or those who are most likely to pose a challenge for you. Once you identify this group, they should list your aspirational, indirect, and perceived competitors.
Your aspirational competitors are those who may be just starting out in your industry but who don’t yet compete with you directly. They could potentially be direct competitors in the future, however.
Indirect competitors are key players in your industry who are influential but don’t compete for your customers most of the time.
Perceived competitors are those you discover that seem to be direct competitors but may not actually compete with for customers.
Tracking your competitor’s digital footprint
Following identification, your PM should begin the tracking process. Your PM should identify the types of intel they want your business to learn about your competitors.
Do you want to know more about their social media presence? What about your competitor’s SEO strategy? Your PM should consider what data they want to collect and analyze about your competitors to help you get or stay ahead.
Gathering intel and data related to your competitors
Finally, your PM should start gathering this data related to your competitors behavior. This can entail considerable research by analyzing your competitors’ online presence, product information, announcements, social media engagements, content, and the ways they engage their customers. Analyzing all of this information can lead to valuable insights.
Turning the data into actionable results
Finally, an effective PM knows how to turn all of this intel data into actionable results. To do this, they need to create a competitive analysis. They also need to communicate this intel to your team, and develop strategies to approach the challenges presented by their competitive analysis. Getting a competitive edge takes reflection and action.
If your PM isn’t analyzing your competition adequately, this can impact the performance of your products and the future viability of your company. It’s easy to see how these two things add together to equate to success.
Your product manager should also be well equipped to keep their eye on the ball and differentiate significant product changes from those that create “background noise”. This is integral to the best use of time and filter out what matters most.
Signal vs. noise
Product changes and updates happen all the time. But is your product manager able to tell the difference between insignificant distractions and “important” product changes that really make a difference? Essentially, can they identify the signal vs the noise? This matters.
Your PM isn’t involved in the direct design or development of your products, so it can be easy for them to lose sight of product changes and developments as they roll out if they are not on the ball. If this goes too far, it can be difficult for them to accurately respond. They won’t be able to alter their approach to meet the new product realities.
Finally, to assess your product manager, it’s important to communicate with the rest of the team. Ask the key stakeholders how effective your PM’s management seems to be. Get a 360-degree view of how they engage with their role. You can do this by consulting with colleagues in:
● Customer service
● Executive team
The idea is to search for positives and negatives related to your PM’s job engagement. You want to develop a fair and clear picture. Gather information on the following key traits as related to your PM. Assess their:
● Level of thoughtfulness
● Attention to detail
● Analytical thinking skills
● Ability to communicate
● Customer focus
You might also consider speaking with vendors and strategic partners. These people are based outside your business but they can be invaluable in their perception. Do they enjoy communicating with your PM? Is their relationship beneficial and straightforward, or fraught with challenges? This matters.
The overall goal is to create a picture that allows you to identify areas of strength and those of weakness in which your product manager may be able to improve. With a holistic view, you can more accurately determine if your PM is productive or not.
You want a PM who acts as a team player and who brings added value and professionalism to your company. Opportunities for engagement should be embraced and not sabotaged. A PM who can create a personal project vision that corresponds with that of your company is needed.
Building for the future
Measuring productivity in your company is important at every step. You can’t digitize every interaction, moment, and engagement your project manager has but you can work towards gaining a clearer picture of how your teams, and they, are doing.
By using the same overall approach to measuring KPIs when it comes to online activity and product success, you can more accurately gauge how effective and productive your project manager is.
Guiding your PM to make positive choices that contribute to your company’s direction and overall objectives can help you transform your business from the inside out. From measuring your competitors’ activities to keeping abreast of product updates that matter most, and gathering valuable input from other stakeholders both inside and outside your business, you can calculate your project manager’s productivity.
This can help protect your bottom line and move your company in the right direction for the future you envision.