Both junior and senior product managers focus on familiar, surface-level metrics too often, and fail to grasp the product’s real value to both users and the business. When these product performance metrics go unexamined, teams can overlook opportunities for growth. This article investigates this problem, why it happens, and what’s at stake when we risk relying on old measures. It also offers thoughts on what product managers can do to avoid these pitfalls and to select better metrics that really do measure a product’s performance in a meaningful way.
What Is a “Product,” and What Metrics Should You Pick?
Delivering value to users comprises much more than merely supplying goods and services. It is about all the interactions, experiences, and real, true, and even sometimes not-so-great solutions that together signify what a product really is. In a large organization, a product manager might oversee just one aspect of solutions and interactions meaningful to the user, that’s maybe even just part of what one might think of colloquially as a “product.” Onboarding, for example, or ratings, or anything else you might imagine as happening in “between” delivery and the user.
The same product can serve entirely different purposes, depending on a company’s priorities and strategies. Take, for example, a debit card: At one bank, it may function primarily as a vehicle for attracting customers who eventually adopt other products like loans, currency exchanges, or investments. If that is the objective, then metrics such as the share of customers using the debit card as a primary payment method, the average transaction volume, and the conversion rate to other banking products are most relevant. At another institution, the debit card might be viewed strictly as a revenue source, so metrics would center on card balances and the income those balances generate.
No matter what precise offering they have, any bundle of metrics should mirror user needs and conveniently align with the organization’s objectives. Letting these measures drift out of sync with business and user priorities can culminate in an unproductive effort that fails to achieve anything meaningful. The practice of regularly revisiting not just the offering’s goals but also the actual metrics in use tends to keep everyone on the road to “Ah-ha!” City rather than in a dead-end cul-de-sac.
Why Common Metrics Can Stop You From Growing
Vladimir Antonov, Senior Product Manager and Vice President at Raiffeisen Bank Russia, observes that many teams focus on well-known metrics like Daily Active Users (DAU), Monthly Active Users (MAU), conversion rates, or revenue. These indicators may provide a glimpse of general growth, but they often do not show whether the product is truly meeting user needs. Consider a fitness app as an example. Users may open it with regularity to check workout plans or view videos, driving up DAU. But if the vast majority of users do not complete workouts or see any kind of real decision that leads to a more fit lifestyle, then it would be better to focus not on tracking the number of users who hit up the app, but on the number of users who finish a certain number of workouts and achieve particular fitness goals.
Why It’s Important to Review Your Metrics: Three Examples
The product teams can miss opportunities for innovation if they obsess over outdated or overly simplistic metrics. To emphasize the importance of rethinking the goals and metrics, Vladimir describes three notable business pivots. The first is AWS, which evolved from an internal IT infrastructure into a cloud platform that became a major revenue stream. The second is Slack, which its makers originally envisioned as a gaming team’s communication tool. Once they saw its larger potential, they transformed it into a leading corporate messaging app. The third pivot is Netflix, which started by mailing DVDs to customers but immediately pivoted toward streaming once it saw the opportunity with that service. Each of these examples highlights the importance of a product team recognizing shifts in product goals and adjusting metrics accordingly, rather than blindly chasing growth in metrics that were chosen long ago.
Vladimir advises establishing adaptable, realistic, and flexible goals that can jibe with the results of ever-continuing user research. This ongoing research, he thinks, should prompt no fewer than several necessary shifts of design priority as the diversions and intersections of user experience make themselves ever more visible. But it’s not these necessary shifts that make for a difficult conversation around goals and priorities.
Vladimir asserts that selecting meaningful metrics begins with defining the value a product delivers to its users. To help with this, he offers three essential questions to serve as guides: what is the product trying to accomplish, which user needs and business objectives is it serving, and which reliable indicators show that it is making progress toward those objectives? Several frameworks across the product management landscape can help answer these questions. A Business Model Canvas directs attention to the value proposition, which is what we might think of as the product’s central promise; it also directs attention to which kinds of customers are meant to use the product and to product features that sustain it.
After identifying the core value, Vladimir suggests choosing a North Star Metric (NSM). This is a singular measure that captures the product’s primary contribution, affects user retention, and provides unambiguous, immediate feedback regarding product changes. This measure helps ensure that daily decisions are made in accordance with the product’s primary reason for being.
Common Mistakes When Choosing Metrics
Some product managers use metrics over which they have no real control. When this happens, it becomes all too easy to mistake what seems like product growth for what is often just a byproduct of external forces, like changes in the ecosystem, that are acting upon the product. Vladimir is also concerned about what he sees as the inevitable result of using unstable or slow-moving metrics. In this case, the crew is navigating based on faulty instruments or on instruments with such slow response times that effective control becomes impossible.
Why Target, Proxy, and Counter Metrics All Matter
To create a full view of how a product is performing, Vladimir breaks the measures into three categories.
The first category is target metrics, which measure how well the product is doing with respect to its main job, for instance, the percentage of users who meet certain “milestones” that come just before they do the big thing that’s the point of using the product.
The second category is proxy metrics. These track indirect progress, or early signs of success, in ways that respond more nimbly to changes in user behavior.
The third category is counter metrics, which help ensure that improvements in one metric do not come at the cost of unintended negative consequences. These metrics track potential downsides of optimizations, such as an increase in user activity leading to a rise in support complaints or a decline in retention. By monitoring these effects, counter metrics prevent teams from misinterpreting short-term gains as overall success.
How to Review Your Metrics in Three Steps
Vladimir promotes a straightforward process to ensure that product metrics stay aligned with the product’s current state. He recommends that product managers revisit both the business and product goals on a semiannual basis. He asks product managers to sense-check these goals with the executive team. Next, he suggests assessing every existing metric. For Vladimir, the two most relevant questions to ask for each existing metric are: “What is the progress we are making towards accomplishing this metric?” and “What is the return on investment for this metric?” If something is being tracked that is not closely tied to either of these questions, it may need to be retired or significantly revamped. Finally, product managers must be rabid advocates for defining new goals and metrics whenever the priorities change.
Conclusion
Vladimir emphasizes that even though well-known metrics can appear to be reassuring and straightforward to decipher, they might not truly reflect a product’s level of success. He encourages product managers to create their own measurements that really assess a product’s impact and to recheck those measurements whenever the input or desired outcome changes. This is a practice that not only helps shine a light on some fresh opportunity space but also aids in being quick and nimble in a market that seems to be evolving week to week.
Vladimir advises against getting bogged down in rudimentary metrics merely because they are well-known. Instead, he recommends generating indicators that truly embody the achievement of your product. These should be regularly evaluated for their continued pertinence. Viewed this way, the act of measuring becomes an act of discovering.
(Disclaimer: The insights featured here come from Vladimir Antonov, who has led several digital transformation initiatives at Raiffeisen Bank Russia and has deep experience across banking, fintech, and product innovation.)
