The Importance of Metrics in Product Development

by Guest Author on November 14, 2018

in Articles, Guest Posts

There was a time when new product development was based upon a lot of best-guesses and “fly-by-the-seat-of-your-pants” decision-making. Those days are gone. Today, thanks to powerful data collection and management platforms and sophisticated analytical tools, product development is data-driven.

Collecting data is no longer an issue – but how to effectively use it can be. And that’s where metrics come in. Product metrics, quite simply, tell you what’s happening with your product. Metrics will vary from industry to industry, product to product, and market to market. The challenge, of course, is choosing the right metrics that enable you to accurately gauge what users are actually doing with your product. After all, it’s users who will steer your product’s evolution – not product managers or the executives in the C suite. Unless you know how users are interacting with your product, how they want to use it, and what features and functions are important to them, you can’t make good product decisions to keep it viable. 

What are the metrics that matter?

Simply put, the metrics that matter are the ones stakeholders and other decision-makers inside your company need to see to accurately assess the health of your product and monitor its evolution.

Metrics can be divided into two fundamental groups:

Long-term (strategic), used to measure the strategic business aspects of your product’s usage.

Short-term (tactical), used for making product modifications based on user feedback about a specific problem, feature, or function.

Regardless of what you ultimately choose to measure, there are five basic steps to developing metrics:

1. Define your metrics. One proven method to ensure that your metrics are both reasonable and actionable is to use the SMART methodology – make them Specific, Measurable, Achievable, Relevant, and Time-based.

2. Understand the data you need and how to collect it. The data collected must be consistent and reliable so that your analysis will be accurate and valuable.

3. Get buy-in. All stakeholders must agree on what’s being measured and why.

4. Measure and share results. Insight only comes from analysis. It’s crucial that you analyze the data you’re collecting and share the results with your team and management to ensure that your product performs well and evolves to meet user needs and expectations. That’s the only way your product will provide maximum value both to users and your company.

5. Update your metrics regularly. Your metrics should evolve with your product. As your product ages and market conditions change, it becomes impossible to accurately assess its performance and value if your metrics are outdated.

Selecting the right metrics is crucial for both successful product development and to help ensure that your product stays relevant and valuable in the future. You could measure absolutely everything related to your product if you wanted to, but that could easily lead to “analysis paralysis” as you become bogged down in data.

You could also go the opposite route and choose metric minimalism, something often referred to as the “One Metric That Matters.” While this approach would certainly enable you to hyper-focus on one critical measurement, you run the considerable risk of putting blinders on and missing both critical danger signs and golden opportunities.

The most prudent choice would be something in the middle; selecting a manageable number of metrics – a half dozen or so – that would enable you to more easily monitor and modify as needed. The point is to be able to gain valuable insights into your product’s performance and make better product decisions down the road to ultimately ensure your product’s – and your company’s – success.

Guest article written by: Monty G. Myers is a software industry executive with more than 30 years experience. He is the founder and CEO of Eureka Software Solutions, Inc., as well as a computer and software expert witness and legal consultant. Throughout his career, Myers has negotiated and performed hundreds of real-world software and technology contracts and statements of work involving complex software projects and licensing terms and conditions, including material intellectual property aspects. He has served as an expert witness for a mix of plaintiffs and defendants in more than 50 litigation matters. To learn more, view his full bio.

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