Being product led offers marketing teams new (and more effective) ways to communicate with prospects and customers. As marketers look to the product as a key engagement channel throughout the customer journey, they’re also more dialed into the work coming out of the product team—aligning marketing campaigns with upcoming launches to ensure their messaging reflects the product’s value.
These new tactics require new ways of measuring success, too. In addition to tracking leads and pipeline health, product-led marketing teams should also leverage metrics tied directly to the product to measure performance and understand their target audience better. At product-led organizations, marketing teams care about many of the same metrics as their peers in product and customer success (CS)—the difference is in how they leverage this data.
Here are eight KPIs that every product-led marketing team should measure, plus tips for taking action on data to optimize marketing initiatives and improve the user and customer experience.
1. Time to value
Time to value represents the amount of time from when a customer starts using a product to when they start deriving value from it. Many companies also refer to this as the “aha” moment, or when a user fully grasps why they need a software product and understands how using it will benefit them.
Marketing teams can use a product analytics tool to measure time to value and track how long it takes for new users to engage with the product’s most important features. This will signal whether or not you’re properly educating users about your product’s core functionality and allow you to take the appropriate next steps. For example, you might partner with the product team to build and optimize in-app onboarding, ensuring this first experience with your product is setting new users up for success.
How to take action on time to value data
- For users with short time to value: When you notice short time to value in your product usage data, your first thought should be to learn as much as you can about these users. What patterns are you seeing? Do these users share a common job title or admin level? In what order do they engage with the product’s key features? From there, you can work to replicate positive in-app behaviors in the rest of your user base, and partner with product managers (PMs) and the CS team to update onboarding flows as needed.
- For users with long time to value: Users who aren’t finding value in the product in a timely manner pose the risk for churn—there’s not much stopping them from abandoning your product if they don’t understand how it can help them achieve their tasks or goals. Product analytics comes into play here too, and you should dig into the data to see where these users are getting stuck or missing out on a key feature. Depending on what you find, you might need to flag the possible need for a fix to the product team, or deploy in-app guidance to help new users get through important workflows.
Once you’ve successfully acquired new users, it’s important to ensure those users keep coming back—which hinges on their ability to understand how a product can help them. User activation represents the moment when a user experiences the value that a product promised, and thus will be different for every product and company. For example, you might choose to define activation around completing a specific workflow or engaging with a certain number of features in the product.
When product-led organizations leverage freemium products or free trial offerings, marketing teams often track activation via product-qualified leads (PQLs). These are users who have reached a usage threshold or engaged with certain features, signaling they have experienced the value of the product and are ready to be nurtured and converted into loyal customers.
How to take action on activation data
- If you notice a dip in the number of activated users over time, turn to your product analytics data to see how users are navigating the product. Are new users finding the most important features quickly? Is there dropoff during a certain task or workflow? This will help you determine where you might need to partner with the product team to intervene, for example by creating educational tooltips or in-app walkthroughs.
- Monitor your PQLs (e.g. on a weekly basis) to see what types of leads are coming in or if there are any major changes since the previous time period, and to ensure you have effective follow-up strategies in place. The last thing you want is to leave this pool of engaged users (and potential paying customers) untapped.
Since product-led marketing teams focus on driving adoption, it’s important to track it consistently at the overall product level (product adoption) and the individual feature level (feature adoption). Product adoption is often expressed over time by the number of monthly active users (MAU), weekly active users (WAU), or daily active users (DAU). Teams can also track product adoption as a rate relative to new user signups for a given period of time. For feature adoption, it’s valuable to understand your most- and least-adopted features, as this will inform any existing adoption campaigns you’re running or signal the need to build a new one.
By measuring how many users engage with the product and its key features, marketers can tailor their adoption efforts based on what’s needed most. If your product marketing team sees low adoption for a particular feature, they can target in-app guides to users who would find the feature valuable and walk them through its functionality and benefits. On the other hand, customers with high adoption are generally happier, and thus offer an engaged group of users from which to request testimonials or participation in community events.
How to take action on adoption data
- Target users with high adoption with in-app guides asking them to leave a review for the product, or inviting them to connect with fellow users at an upcoming user group event.
- If you notice low adoption after a feature launch, partner with PMs and/or product operations to create (or revamp) an in-app adoption campaign—this could include guides that steer users toward the feature or walkthroughs that offer a short tutorial. It’s also useful to house this information somewhere in the product where users can access it at a later date, if and when they want to learn about the feature or need a refresher.
- If overall product adoption is lagging, revisit your in-app onboarding to ensure it’s directing new users to your product’s most important features and catering to different learning styles. If your team has created any short how-to videos, is there a way to inject this content into the onboarding experience?
4. Product Engagement Score (PES)
The Product Engagement Score (PES) is a composite metric that takes the average of a product’s adoption, stickiness, and growth rates and provides a single view of product engagement. Teams can measure PES at the visitor level or the account level, and it’s particularly useful when tracked over time.
PES offers an easy way for marketing teams to quickly understand overall product engagement without needing to get into the weeds of multiple metrics. From there, marketers can identify if the product’s adoption, stickiness, or growth is bringing down the average, and ensure their work aligns to the area that is in most need of a boost. Tracking PES also fosters better collaboration with teams like product, sales, and CS, since it acts as a shared metric that everyone is focused on measuring and improving.
How to take action on PES data
- Examine PES over time at the visitor level to identify users with high engagement (also known as power users). Product marketers might look to this group for feedback about where they’re finding value in the product, and customer marketers can dig into product usage data to identify the in-app behaviors that they should try and encourage throughout the rest of your customer base.
- If you see PES start to drop, drill into each component to determine where the decrease is coming from and how you can build an in-app marketing campaign to drive higher engagement.
5. Retention and net revenue retention (NRR)
Retention measures the percentage of users or customer accounts still using your product after they initially install or start using it. Since the cost to acquire a new customer can often exceed the initial contract value, low retention means your organization could actually lose money when signing a new customer. At product-led companies, every team should be focused on retention, ensuring the product delivers an experience that keeps customers engaged and helps them achieve their jobs to be done.
Net Revenue Retention (NRR) is a related metric that tracks the percentage of revenue retained from your existing customers over a given period of time. Marketing teams can use NRR to get an all-encompassing view (since it takes revenue, expansion, and churn into account) of the product’s ability to meet customers’ needs.
How to take action on retention and NRR data
- Segment your data (e.g. by role, company size, or free users vs. paying customers) to compare retention for different subsets of your user base. How do their behaviors differ? Which features do users with high retention utilize the most? You can then create in-app guides to encourage the rest of your users to engage with those features in an effort to drive up retention.
- If you see low retention for certain customer accounts, flag this to your CS team so customer success managers (CSMs) can work to mitigate any product issues or get ahead of churn risk.
Your marketing team should track revenue to understand how you’re pacing against company goals and how your campaigns are helping to create pipeline, nurture prospects, educate customers, and convert free users (plus any areas that need more attention). At product-led companies, many of these tactics will be driven by the product itself—allowing marketers to automate key processes and easily measure success through product analytics.
One revenue metric that’s especially important for customer marketers is expansion revenue, or the amount of revenue generated from existing customers through cross-sells, upsells, and add-ons. It’s one way customer marketing teams can attribute their efforts to the company’s bottom line and clearly track their progress.
How to take action on revenue data
- Leverage product usage and sentiment data to understand which in-app behaviors correlate with expansion, and then use those insights to build in-app marketing campaigns around the specific features and product areas.
- Use the product as an upsell and cross-sell channel and create in-app guides that inform users of additional functionality they’re not currently paying for during key moments in their workflows.
- Identify users who are dropping in engagement (based on product usage data) and use in-app guidance to re-engage them and encourage long-term use of the product.
7. Guide metrics
As marketing teams leverage the product to communicate and drive engagement with users and customers, it’s equally important to measure the success of these tactics. Marketers should monitor guide metrics to understand if their in-app campaigns (e.g. a feature adoption campaign) are achieving their intended goals (e.g. increasing adoption of a valuable but underused feature). This data allows marketing teams to take a more iterative approach to their work—if a guide isn’t getting many views or CTA clicks, they can try placing it in a different area of the product to see if that increases engagement.
How to take action on in-app guide data
- If you have an in-app resource center where users can self-serve and access educational guides at any time, use data to understand which guides users interact with the most. This could signal that they are having trouble with certain product areas or features, warranting a change to your onboarding flows or contextual guidance.
- See how different segments of users engage with your in-app campaigns. If an in-app guide isn’t seeing much engagement from a particular group of users, consider removing them from the segment to avoid spamming them with information that isn’t relevant to their workflows.
8. Net Promoter Score (NPS)
Net Promoter Score (NPS) is one of the most common ways that companies gauge customer loyalty, and is delivered using a one-question survey that asks, “How likely is it that you’d recommend this brand to a friend or colleague?” Customers answer on a 0-10 scale, where scores of 9 or 10 are marked as “Promoters,” 7 or 8 as “Passives,” and 0 through 6 as “Detractors.” Rather than sending NPS surveys via email, product-led companies often turn to the product to deliver surveys in-app, while users’ experience with the product is top of mind.
Marketing teams benefit from tracking NPS over time and keeping a pulse on overall customer sentiment. This also puts marketers in a good position to flag concerning responses to the product team—for example if they see multiple comments about a particular feature and think it might warrant a change to the product’s functionality. They can also use NPS data to inform existing and future marketing campaigns, targeting NPS Promoters with in-app guides that ask for their positive testimonials or customer references, or request their participation in publicity initiatives or upcoming events.
How to take action on NPS data
- Segment product usage data by NPS response to see which areas of the product correlate with increased satisfaction, then build in-app education campaigns that steer users towards those features.
- Your NPS Promoters are a valuable resource for understanding what’s working well in the product and where users are finding value. Target Promoters with in-app guides asking for qualitative feedback or to leave a review on a third-party site.
Check out the Pendo e-book, The 10 KPIs every product leader needs to know, to learn more about each of these KPIs, the roles they play in building great product experiences, and how to measure and act on them.