Product Marketing KPIs/Metrics
October 6, 2022 Edwin Kooistra
One of the most dominant challenges for startups is the ideal measurement of their product marketing campaigns. Attributing results to team efforts becomes complex with diverse marketing activities producing so much data to analyze.
Understanding the right metrics and their relevance to your product marketing is a prerequisite to starting a SaaS startup and should be on top of every entrepreneur’s checklist.
Knowing and monitoring the right product marketing metrics provides critical insights into important marketing and sales strategies, the customer journey, customer satisfaction, cost of acquiring customers, etc., and most important of all ROI growth.
Today we take a look at some of the most important product marketing KPIs to track your marketing efforts that elevate revenue growth, improve audience engagement, enhance customer satisfaction, and measure team performance.
Why You Should Measure the Success of Product Marketing?
Product marketing success is measured by a specific set of KPIs that determine whether or not the goals and objectives were met.
Set measurable targets that quantify what success means to you before you begin implementing tactics.
Product marketing’s primary focus areas include go-to-market initiatives, sales enablement, and product adoption. Before you start tracking any of the metrics listed below, make sure you collect baseline data to better understand how large your delta is over time.
TL;DR Product Marketing Metrics
- Measuring essential KPIs of multiple activities is critical for the success of B2B product marketing campaigns.
- Product marketing metrics or key performance indicators (KPIs) are factors that identify the effectiveness and efficiency of different SaaS marketing strategies.
- Measuring the effectiveness of product marketing campaigns assists in improving brand positioning, content, and product value propositions, while increasing product adoption and customer retention.
- Multiple product marketing KPIs are collectively measured to make meaningful decisions about improving or changing marketing strategies.
- Customer Journey KPIs identify inconsistencies in the customer journey, customer satisfaction, and audience challenges.
- Velocity metrics are measured to identify the timelines of a lead becoming a customer across various stages of the marketing funnel.
- Acquisition KPIs identify the effectiveness & efficiency of marketing campaigns in acquiring new customers.
- Activation metrics measure the unique events or checkpoints during which your customers begin to experience value from your products & services.
- Retention metrics provide essential insights about customer lifetime value, customer churn, customer retention, and brand loyalty.
- Product revenue KPIs define the loyalty of your customers and how likely they are to recommend your brand to partners, peers, colleagues, and friends.
- Product adoption metrics measure the increase in product adoption by new users and how frequently customers use your products.
- Prospects who directly connect with your brand through your website, social feeds, contact us forms, phones, and live meetings are the highest quality leads.
- Market share analysis is a very popular metric used to measure the effectiveness of product marketing campaigns across different buyer personas. Market share metrics identify how the brand message resonates across different audiences, how to personalize messaging, and discover new market opportunities.
- Sales close rates measure how efficiently sales teams close leads and how effective marketing strategies are in convincing these leads.
- Win rates measure the efficiency and consistency at which sales teams win sales opportunities.
- Revenue metrics are the most critical indicator of success for product marketing strategies as they directly attribute revenue to different activities.
13 Most Important Product Marketing Metrics You Should Track
To successfully measure the performance of your product marketing strategies, startups should preferably monitor several KPIs. Put into broader categories, the important metrics to evaluate product marketing performance can include:
- Customer Journey
- Velocity Milestone
- Product Revenue
- Product Adoption
- Users Who Contact Us
- Market Share
- Customer Sentiment
- Sales Close Rate
- Win Rates
1 – Customer Journey KPIs
Customer journey performance indicators provide deep insights into customer satisfaction, audience challenges, and future improvements to the process.
The visitor-to-sign-up rate is a popular B2B product marketing metric that measures the percent of website visitors who signup to, for example, an email list, a free product trial, or a beta test. This essential metric is important because it directly gauges the number of users who respond to your marketing CTAs.
To calculate the visitor to signup rate, the professional formula is defined as:
Visitor-to-Signup Rate = (Number of Sign-Ups) / (Number of User Sessions) x 100
A PQL or product-qualified lead is a free or trial customer who is ready to extract value from your product. The signup-to-PQL rate determines the percentage of new signups who have reached product qualified lead status in a certain time frame.
This metric is of importance because it measures the performance of your customer activation process. Professionals measure this metric as follows:
Signup-to-PQL Rate = (Number of PQLs / Number of Signups) x 100
The PQL-to-customer/conversion rate is a very important metric that identifies if your product offers enough value to get target customers to get a paid version.
PQL-to-Customer Rate = (Num. of accounts converted from PQL to Paid / total number of PQLs) x 100
Another important KPI for product marketing performance, the signup to customer rate determines the percentage of customers who signup for free or trial products and later convert into paid customers.
This metric is very important to measure as it directly measures the performance of the entire organization. Different teams including marketing, support, and development can easily attribute performance to their efforts while identifying critical improvements. This metric is measured as follows:
Signup to Customer Rate = (Paid Customers / Total Signups) x 100
2 – Velocity Milestone KPIs
Velocity metrics are those that measure the time it takes for customers to reach a particular milestone in their buyer journey. These important product marketing KPIs also measures exactly how long it takes for your business to achieve different business milestones.
Days from signup to PQL
This metric measures the average number of days it takes for a customer to become a product-qualified lead since they signed up.
Days from PQL to customer
This important KPI determines the average number of days that a product-qualified lead takes to become a paid subscriber to your product.
Days from signup to customers
Marketing teams measure the average number of days it takes for prospects to become paid customers through this metric.
Days to break-even
A crucial product marketing key performance indicator, this metric establishes the average number of days that a customer takes to generate enough revenue to pay off the customer acquisition cost it took to onboard them.
Average customer life
The average customer life KPI is the measure of the average number of days that it took a lead to become your customer and ended their relationship as a customer.
3 – Acquisition KPIs
Customer acquisition KPIs are extremely beneficial for startups as they identify new customers who subscribed to your products. These very important product marketing campaign metrics identify consistent growth of new customers and are also an important indicator of ROI growth.
Customer Acquisition Cost
The customer acquisition cost is the average cost of onboarding a new customer. Usually, startups consider only their paid subscribers to calculate this metric. The CAC is one of the most significant KPIs that identify which activities and channels are delivering the lowest cost for acquiring new customers.
Customer Acquisition Cost = (Total Sales & Marketing Costs / Number Of New Customers)
Free Trial Sign-up/Demos Booked
An insightful metric for product marketing performance measurement, this KPI measures the number of free trials and product demos secured by the marketing team.
This important metric allows startups to determine how many trials and demos are needed to keep the sales pipeline consistent and generate regular revenue.
4 – Activation KPIs
Activation refers to the process of various events that take place and your customers experience value from your product. Product users who reach certain checkpoints by completing activation events are therefore termed activated customers.
The activation rate is calculated to measure the percentage of users who completed certain events and derived value from your product. This metric requires you to analyze all activation events to determine which customers got activated. Activation rates are calculated as follows:
Activation Rate = (Number Of Users Activated / Number Of Users Who Signed Up For Trial) x 100
Average Time to Value
Average time to value is a significant modern measure of the success of your product marketing campaigns. This metric measures the number of days it takes a customer to reach their activation milestone. In other words, this metric identifies the average number of days that a customer takes to experience value from your product.
Startups generally aim to reduce the average time it takes to activate customers and provide their true value from your product. This metric allows marketing and sales teams to understand which customers may need support to activate.
5 – Retention KPIs
Customer retention metrics refer to product marketing KPIs for B2B startups that identify the number of customers who discontinue their subscriptions, the lifetime values of different customers, and the breakeven point for different customers.
More commonly known as the churn rate, this very important KPI for product marketing measures the percentage of customers who cancel their subscriptions during a business cycle. The churn rate is very crucial to measure sales and revenue growth, in addition to being a sales performance metric.
Churn rate = (Number Of Canceled Subscriptions / Number Of Customers At The Start Of The Year/Quarter/Month) x 100
Customer Lifetime Value
The customer lifetime value metric identifies the revenue that your startup earns from a single customer during the time they use your products. The CLV assists in determining the profitability of different customers.
Customer lifetime value is determined through the following formula:
CLV = (Average Revenue Per Customer / Churn Rate)
Customer Lifetime Value to Customer Acquisition Cost
CLV to CAC is a very important financial ratio that identifies the efficiency of product marketing campaigns when acquiring new customers. A great CLV to CAC ratio is one that is 3 and above, which means customers spend more on your products while it costs less to acquire new ones. The formula for this crucial B2B product marketing metric is:
CLV to CAC = (Customer Lifetime Value / Customer Acquisition Cost)
6 – Product Revenue KPIs
Product revenue metrics are essential to gauge both customer sentiment towards your products and how likely customers are to recommend your products to others.
Net Promoter Score
The net promoter score is a very popular SaaS metric that measures customer experience and is a very important KPI to determine business growth. Tech startups actively use NPS to gauge their customer satisfaction and that customers are happy with the product.
As one of the most insightful KPIs in product marketing, startups can use NPS to improve customer satisfaction, onboarding, product adoption, and support. We generally use the following formula to calculate our NPS:
Net promoter Score = % of Promoters – % Detractors
7 – Product Adoption KPIs
Product adoption KPIs are an excellent way to measure how actively customers use your products and who your most loyal customers are.
Active users are customers who demonstrate high engagement scores and actively use your services. If your active users begin to decline, it’s a major sign of product-related issues for early-age startups.
Daily Active Users
This very important SaaS product marketing metric allows startups to measure the ‘pull’ or engagement that their products have. Usually, a daily active user to month active users ratio is calculated to identify how often customers engage with the core product. This ratio is represented by:
Daily Active Users to Monthly Active Users ratio = Daily Active Users / Monthly Active Users
Weekly Active Users
For young startups, it is recommended to identify customer usage to ensure consistent engagement with their brands. Due to the heightened demand for personalization and enhanced customer service experiences, measuring weekly active users is essential especially if you are following a 30,60,90 day plan.
Monthly Active Users
As we mentioned above, the monthly active users are contrasted with daily active users to determine the ratio of users who engage with your products daily. A decline in monthly users can identify issues with features, device compatibility, accessibility issues, and customer experience.
8 – Users Who Contact Us
Professionals discuss that direct customer interactions are a crucial product marketing key performance indicator. Audiences who contact businesses through contact us pages, phone calls, and social messengers are high-quality leads. Engaging prospects who contact you can provide a better understanding of particular campaigns and product benefits.
9 – Market Share
Since increasing market share is the primary goal of almost every tech startup, it is justified to include it in your list of KPIs to track your product marketing efforts. Market share analysis can identify critical insights about the industry, the competition, and future trends.
SaaS startups can determine or update their go-to-market strategy to engage larger audiences across multiple demographics. Entrepreneurs usually determine their market share by revenue as follows:
Market Share = Company Annual Revenue / Annual Industry Revenue
10 – Customer Sentiment
Measuring customer sentiment has become a popular way to develop a strong brand image and consistently improve brand reach. Understanding customer sentiment through reviews and feedback allows startups to make their products more appealing.
Customer surveys are a rich source of identifying customer sentiment about multiple aspects of your product offering. Social media already play a huge role in providing customers a platform to voice both their appreciation and concerns. Social listening can provide a wide range of insights about the likeness, ease of use, reliability, and other aspects of your product.
11 – Sales Close Rate
The sales closing rate has remained one of the most monitored product marketing KPIs across almost every industry. This is defined as the rate at which leads convert into customers, and is very important to determine sales productivity, marketing efficiency, and the reliability of buyer journeys.
Sales Close Rate = (Total Sales Closed / Total Sales Leads) x 100
12 – Win Rates
The win rate measures the percentage of qualified leads in the sales pipeline that are successfully completed. As one of the most highly tracked product marketing metrics, startups use win rates for sales enablement, sales planning, and market share analysis. The win rate is calculated by:
Win Rate = (Total Opportunities Won / Total Sales Opportunities) x 100
13 – Revenue
Probably the most important product marketing KPIs for B2B tech startups, revenue directly attributes results to product marketing campaign performance. Professionals establish that companies that don’t focus on revenue as a metric, can considerably lose market share.
Startups must not only attribute results to product marketing activities but also understand the contribution of different buyer personas and product variants that drive more revenue. Speaking of buyer personas, you can learn how to create buyer personas in our detailed guide.
By monitoring these essential product marketing KPIs, startups can ensure that they are on track for success and reach their desired goals.
That said, effectively tracking KPIs can be a daunting and tedious task. We at Chams have seen many startups fail to monitor only the most critical KPIs.
Although we’ve shared all the most important metrics a startup should be monitoring in this guide, still, if you get stuck, you can always reach out to Chasm on behalf of your company to acquire our sales effectiveness and strategy consultancy.
At Chasm, we are dedicated to helping struggling startups reach their highest scalable potential through data-driven product marketing strategies. Our proficient team consults with every touchpoint in your organization to build demand-generating and brand-defining strategies focused on delivering value.