21: Seven KPIs for customer insight
I’m writing about one hundred things I’ve learned about being a product manager.
Knowledge is power for product managers, but you have to gather and interpret the right metrics. I use these seven key performance indicators (KPIs) to keep track of my customers and to identify products that need some love and attention. I hope that you can use similar KPIs to expand your customer insight and to drive better performance.
Your customers fund your company. Your repeat customers fund your growth and new development. You need to identify and focus on the ones that benefit you most and those that cost you least.
Your customers fund your company. Your repeat customers fund your growth and new development.
1. Size / industry / demographics of the customer
Why? Helps you filter (segment) your findings, which in turn may draw out clearer trends or hotspots to investigate further.
2. Number of customers (now and trend over time)
Why? Tells you whether your customer numbers growing or declining. When combined with the segmentation criteria above, it may tell you whether you’re finding traction in a particular market or industry (do you know why?), and whether you’re replacing less profitable customers with more desirable ones.
3. Number of products / users / licences per customer (now and trend)
Why? Helps you identify the characteristics of a repeat or growing customer so you can go hunting for more of the same and tells you whether you’re broadening your sales footprint within those customers.
4. Percentage of customers retained (now and trend)
Why? It’s important to know how many new customers (and of what value) you need to be acquiring to keep the company growing.
5. Length of customer relationship with your firm
Why? To understand what keeps your customers with you for longer, because it’s a lot cheaper to keep existing customers than it is to acquire new ones.
6. Average value of customers and users (now and trend)
Why? Tells you whether you’re successfully attracting more valuable customers.
7. Profitability per customer (this can be tricky if you don’t know how much your products cost to maintain and support)
Why? Helps you identify which are your ‘good’ and ‘bad’ customers. If you’re going to focus your efforts somewhere, it should be on cultivating more of the ‘good’ customers.
Here’s the thing, if you don’t really understand your customers, they’ll be far more likely to want to break up with you:
What is important for your company to measure about your customers? How do you change your actions based on those finding? It would be great for you to share your experiences in the comments.
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Live, conference-style talks with Q&A each Tuesday in October 2020, covering:
- What does a product manager do (and not do)?
- Understanding user needs
- The secrets of meaningful product roadmaps
- Landing and starting your product manager job
See you there!