![]() ![]() However, only 20,000 of them complete their purchase. In August, your website attracts 50,000 visitors who add products to their shopping baskets. By monitoring CVR, you can identify bottlenecks in your conversion funnel and improve user experience.įor example, imagine you’re a product manager at an eCommerce platform selling wine and you’re interested in knowing what percentage of visitors to your website make a purchase. Use: CVR is a critical metric in assessing the effectiveness of various customer touchpoints in driving desired actions, for example, signing up for a newsletter. Gathering method: To calculate CVR, you divide the number of conversions by the total number of users (or sessions), and then multiply this figure by 100 to express it as a percentage. The 'desired action' can be anything from making a purchase to signing up for a newsletter, to downloading a whitepaper, depending on the company's objectives. Conversion Rate (CVR)ĭefinition: Conversion Rate, often abbreviated as CVR, is the percentage of users who take a desired action. As you can see, Tracking CPA helps product managers to better allocate their marketing budget and strategies. Sure, you got more leads than the previous month, but for a much higher cost. This indicates that your marketing efforts have been less successful in the second month. If the next month you spend $1500 and get 520 leads, your CPA is $2.88. Use: CPA is one of the key metrics for product managers because it will help you evaluate the effectiveness and profitability of your marketing campaigns.įor example, if one month you spend $1000 on marketing that leads to 500 potential customers signing up for a free trial of your accounting software, your CPA is $2 per lead. Gathering method: To calculate CPA, you divide the total costs spent on marketing (including advertising, sales expenses, etc.) by the number of new potential customers acquired during the period you're measuring. (If you want to calculate the cost of acquiring paying customers, you need to use customer acquisition cost (CAC), but let’s leave that for another day.) This could take the form of webinar registrations, account activations, or other types of leads. CPA is all about the cost of attracting potential customers. Note that we’ve specified it’s a new potential customer and not a paying customer. Cost Per Acquisition (CPA)ĭefinition: Cost Per Acquisition, or CPA, is simply the cost of acquiring a new potential customer. With that in mind, let’s take a look at some of the most useful metrics for product managers. Of course, it’s also important not to get too bogged down with numbers and only track the metrics that are important to your product. This will help you to decide where you need to reiterate.Īs you can see, metrics are essential for making informed and ultimately better product-related decisions. Identify areas for improvement – As well as showing what’s going well, metrics also highlight areas that need improvement. Metrics are tangible pieces of data that teams can use to inform their objectives and make sure everyone is on the same page.Ĭonvince stakeholders – Product managers often have to lead without authority, and often the best way to convince key stakeholders of your product decisions is objective data. Metrics illuminate the areas that need most of your attention, helping you to allocate your efforts and focus effectively.Īlign teams – As a product manager, you need to be an expert at cross-collaboration between various teams, such as marketing, design and Business Intelligence (BI). Prioritize your time – Time is a scarce resource, especially for product managers who often face competing demands for their time. ![]() Understand customer behavior – Metrics can generate insights into how your customers are using your product and help you to adapt your product strategy accordingly. Identify patterns and trends – Tracking metrics can help you identify patterns that emerge and more accurately predict product performance over the long term. Why are metrics important for product managers?Ĭollecting metrics about product performance helps you to: ![]() And if you’re still not convinced about the importance of data, here’s a quick refresher. So let’s look at five essential metrics for product managers, why they’re used, and how to calculate them. While the world of Product Metrics may seem intimidating, familiarizing yourself with the most common ones is a good start. Love it or loathe it, if you’re an aspiring product manager you’ll need to get comfortable with metrics. ![]()
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