Plant The Flag: How we set metrics for digital products
What is the next thing you should do to make your product grow more? When is your digital product successful? How will you be able to tell? These are some of the questions that you’re faced with when doing product management.
Adopting an analytical framework for product success helps you solve them. Want to know how we do it? We’ll tell you our secret formula of tried and tested methodologies.
North Star Metric
The North Star Metric, or One Metric That Matters, is a single metric that shows what success looks like. It mostly is a complex metric that’s very product-specific. It includes a timeframe, user activity and takes into account as much context as possible.
Some examples from big platforms include:
- Soundcloud: Monthly Active Listeners
- WhatsApp: Messages Sent
- Airbnb: Nights Booked
While these are great to align your team on what your product should do, they aren’t so clear on the way to get to success. A metric like ‘Nights Booked’ won’t inspire much roadmap items.
Objectives & Key Results
To make the North Star Metric more actionable, we need to divide it into 2-4 objectives. These are qualitative statements that define the fields of action. For example this could be something like ‘Improve our First User Experience’.
These objectives are then made measurable by splitting them up into 2-3 key results. These are the targets we’ll be aiming for through the coming months. So for the ‘Improve our First User Experience’ the first key results could be ‘Increase account creation to 75%’.
This key results can be used to report both on a month-to-month period or just as a benchmark for experiment results. Are we reaching our goals and how is what we’re doing helping us to do so.
These Objectives & Key Results (OKR’s) should be revisited from time to time. Especially when you notice that moving the needle on the OKR’s does not do so for the North Star Metric. Then you’ll need to go back to the drawing board and decide on new objectives.
Having all these metrics in place is great, but just looking at them won’t accomplish anything. You’ll need to define which actions you will be taking to have an impact on the results. That’s why we don’t leave the room before we defined a few roadmap initiatives that could help us increase the North Star Metric.
Roadmap Initiatives mainly consists of these categories:
- Improving / Developing features
- Improving / Creating notifications
- Running product experiments
These roadmap initiatives need to be connected with at least one objective and key result. This keeps our roadmap focussed on getting results by taking these objectives as the starting point of our ideation. It may not look like much, but reversing the thought process in this way will help your roadmap to be tight as a drum.