E61 - Product KPIs 101: What They Are & Why They Matter
Oct 10, 2023
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The podcast discusses the differences between KPIs and OKRs, emphasizing the importance of aligning them with business goals and customer needs. They advise against using vanity metrics and recommend using both quantitative and qualitative feedback. The podcast also explores the concepts of leading and lagging indicators and provides tips on selecting the right KPIs and OKRs, starting simple and iterating over time.
KPIs represent the overall health and success of a product, while OKRs are short-term goals tied to the company's strategy.
Customer feedback and qualitative metrics play a crucial role in measuring the success of a product, providing insights into customer perception and helping identify areas for improvement.
Deep dives
KPIs and OKRs: Understanding the Metrics for Product Success
The podcast episode discusses the importance and usage of key performance indicators (KPIs) and objectives and key results (OKRs) for measuring the success of a product or business. KPIs are metrics that help gauge performance towards business goals or product success, such as the number of subscribers and hours of watch time for a YouTube channel. On the other hand, OKRs are objectives and corresponding key results that focus on future goals and aspirations, such as becoming one of the best product management content channels. KPIs are ongoing and represent the overall health of a product or business, while OKRs are more temporary and change based on priorities. The podcast also emphasizes the need to align KPIs and OKRs with business goals and customer needs. Additionally, it highlights the importance of leveraging both quantitative and qualitative metrics to gain a well-rounded understanding of product performance. Tips for selecting KPIs include avoiding vanity metrics, selecting lagging and leading indicators, and continuously monitoring and adjusting metrics to align with changing business goals. The episode concludes by emphasizing the iterative nature of KPI and OKR selection, encouraging product managers to spend time defining these metrics and relating them to business goals.
The Role of Customer Feedback and Qualitative Metrics
Customer feedback and qualitative metrics play a crucial role in measuring the success of a product. While quantitative metrics provide tangible data, qualitative feedback offers insights into how customers perceive and use the product, helping identify areas for improvement. The podcast suggests periodically reviewing customer comments, conducting surveys, and analyzing sentiment to gauge customer satisfaction and sentiment. By analyzing both quantitative and qualitative data, product managers are equipped to make informed decisions and design solutions that align with customer needs. The episode also highlights the importance of avoiding vanity metrics that may look good on paper but do not provide actionable insights or add significant value to the product. Additionally, the podcast emphasizes the necessity of aligning KPIs and OKRs with both business goals and customer preferences to drive the success of a product.
Tips for Choosing Effective KPIs and OKRs
The podcast offers helpful tips for product managers in choosing effective KPIs and OKRs. These include aligning metrics with business goals and customer needs, avoiding vanity metrics, and considering both quantitative and qualitative measures. Additionally, the podcast emphasizes the need to monitor and adjust KPIs and OKRs as business goals, user preferences, and product direction evolve. It recommends regularly calibrating metrics to ensure they are still driving the desired outcomes. The episode also stresses the need for product managers to spend time defining KPIs and OKRs and relating them to business and user goals. It further explains the difference between lagging and leading indicators and their role in predicting future outcomes and measuring past results. The podcast concludes by encouraging product managers to view KPIs and OKRs as an iterative and continuous process, refining and adapting them over time to determine the success of a product.
In this podcast, we discuss the key differences between KPIs and OKRs. We provide real examples of KPIs and OKRs by taking our YouTube channel "Everything Product" as an example and sharing tips on how to select the right metrics to measure product success.
Key Highlights:
- KPIs represent the overall health and success of a product, while OKRs are short-term goals tied to the company's strategy (2:30)
- Always align KPIs and OKRs to business goals and the customer (8:00)
- Avoid vanity metrics that look good but don't provide value (12:00)
- Use both quantitative metrics and qualitative feedback from surveys and interviews (15:30)
- Leading indicators predict future success, and lagging indicators track past performance (17:00)
- Defining good KPIs and OKRs takes time - start simple and iterate (27:00)
Timestamps:
0:00 - Intro to KPIs and OKRs
0:54 - KPI examples for a YouTube channel
2:30 - Defining OKRs with examples for a YouTube channel
5:00 - When to use KPIs vs OKRs
6:00 - Walkthrough of using KPIs and OKRs at work
8:00 - Tips for picking the right KPIs
12:00 - Types of metrics: quantitative vs qualitative
15:30 - Lagging vs leading indicators
17:00 - Key takeaways
Follow us on:
Spotify: https://anchor.fm/everythingproduct
Learn more about the hosts:
Phani - [https://www.linkedin.com/in/phanivuyyuru]
Srinath - [https://www.linkedin.com/in/skotela/]
Sid:
LinkedIn - [https://www.linkedin.com/in/sidsaladi/]
Newsletter - [https://sidsaladi.substack.com/]
Twitter - [https://mobile.twitter.com/Sidsaladi]
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