A metric is a number you track over time to see whether your product is doing its job. Adverts for product managers and analysts ask candidates to set product goals, define KPIs (key performance indicators) and track them. Choosing the right metrics keeps a team focused on real value instead of numbers that only look impressive.
Following the user's journey
A useful way to pick metrics is to follow a user from first contact to lasting value:
- Acquisition. How many new people arrive or sign up?
- Activation. How many reach a first moment of real value? For a savings feature, that might be making a first deposit, not just opening the menu.
- Retention. How many come back and keep using it? This is often the most honest sign that a product helps people.
- Revenue. How much money does the product bring in, and from whom?
- Referral. Do users bring others, for example by telling friends in their market or church?
You do not need all of these at once. Early on, activation and retention usually matter most.
Defining a metric precisely
A good metric has a clear definition that anyone on the team would calculate the same way:
- Weak: "Active users".