5 essential metrics every product manager must track

Note: This post is a snippet from AppMetrica's "5 Essential Metrics" downloadable guide. Download the complete guide at the end of this post.

Understanding how customers interact with your product is key to its success. But which metrics matter most? We’ll guide you through the most essential user metrics. By focusing on these, you’ll uncover valuable insights into user behavior, identify which features drive value, and ensure your business grows sustainably. Let’s dive in!

Build a metrics pyramid

You’ve probably heard of a North Star metric, a framework that emphasizes one key metric bringing the most value to the business, with other metrics supporting it. However, this can be limiting if your company has diverse goals or products.

Instead of relying solely on a North Star metric, use the Metrics Pyramid. Simply divide your metrics into two groups:

• Key Metrics: directly impact business value (e.g., revenue)
• Proxy Metrics: daily operational metrics (e.g., app load time, crash rates)

Proxy metrics should ultimately support the key metrics, ensuring overall business success. An easy way to remember this is by looking at AppMetrica logo:

AppMetrica’s logo illustrates the Metrics Pyramid: key metrics (red) on the surface and proxy metrics (dark blue) supporting the structure.

Unsure of your key metrics? Leverage historical data!

Review past performance to see what worked and what didn’t. Best practice is to use an analytics tool that retains history for at least two years.

Example: A gaming app is developing a new feature. The product manager would focus on how this new feature impacts the app’s key metrics.

Pro tip: Keep metrics list short and precise. Each selected metric should be easily measurable with minimum and maximum values for effective assessment. Below are examples of correct (specific) and incorrect (non-specific) metrics:

Create a hypothesis

Metrics are valuable for the insights they provide, revealing changes and impacts. However, identifying the cause of these changes is crucial. Here’s a structured approach to correctly identify cause and effect:

1. Form hypothesis: begin by hypothesizing what might cause changes in your metrics.

Decide which element or event you want to understand better and what the cause-effect relationship might be. It’s okay to get this wrong initially; that’s the essence of the scientific method. Adjust your hypothesis based on the data. Without proper A/B testing, it’s similar to guesswork. See this testimonial to better understand this step:

2. Test hypothesis: use A/B testing or analyze events in your analytics tool to confirm or disprove your hypothesis.

Let’s see how AppMetrica’s A/B test feature allows you to compare data from different user groups, helping you understand user behavior and refine strategies. In the following screenshot, notice the time frame (7 days), the metric (In-App ARPU, detailed in the next section), and the results highlighted in green.

AppMetrica A/B testing result — “New button” option produced better results.

Pro-tip: use cost-effective analytics tools to validate your ideas without overspending. Remember to save your reports to accumulate valuable data for future analysis.

AppMetrica has a ‘Saved reports’ feature where you can store unlimited reports.

5 Essential metrics for product managers

Tools like AppMetrica can track everything your users do, but you might be tracking too much, too little, or even the wrong things. That’s why, once you have a hypothesis with key and proxy metrics and their relationships, it’s time to dive into AppMetrica’s best practices, with the 5 Essential Metrics for Product Managers guide.

This research is the result of thousands of hours of expertise from product managers, combined with extensive data analysis, and then distilled to key learnings.

It provides practical insights on how to track and calculate the metrics, what each one means, why they are important, and how to choose the right combination.

To get started, hit the download button below!