How do you know if your product is truly a success? Let’s face it, sales are great but they aren’t the only performance metric you should be focusing on. There are other key performance indicators (KPI’s) that are just as important (if not more so) than sales. Here’s a look at some metrics to consider beyond the dollars earned from your product’s sales.
Net revenue is an important metric because it also considers the costs incurred to produce your product. Sales dollars don’t mean much if the sales dollars earned don’t cover the costs required to get your product to market. Net revenue is a better metric for determining how successful your product is.
As one of the most frequently tracked metrics, net revenue is an important indicator of how well a company is doing. Tracking net revenue on a product-by-product basis will tell you how successful each product is. It’s a good idea to set net revenue goals for your products so you can measure whether or not you meet them during any given period.
When someone goes from being a lead to actually being a customer, this is called a conversion. Tracking your conversion rates will give you insights into how well you are marketing your product. You can improve conversion rates by involving your customers in your design process. By involving your customers or leads in the design process and using their feedback to improve your product, you are ensuring more conversions when your product launches. The higher your conversion rate, the more successful your product is.
A metric that is often overlooked is customer retention. It’s easier to keep existing customers happy than it is to find new customers. If your product lends itself to repeat purchases, you’ll want to make sure you’re tracking the number of customers that buy from you over and over. This is also helpful when considering how to make your second product as successful as your first.
Qualitative feedback isn’t really a metric because it’s difficult to quantify and measure, but it’s still important in measuring your product’s success, considering that quantitative metrics don’t always tell the whole story. Qualitative feedback can be internal or external. Internal feedback includes surveying various business departments to learn how you can improve your processes or whether or not your employees are feeling supported. External feedback involves surveying customers to get their feedback on things like product features, price, and customer service.
Measuring your product’s success involves more than just looking at the amount of sales it brings in. Sales are important but so are things like net revenue, conversions, customer retention, and qualitative feedback.
Pivot International has helped a number of our customers improve their product design to better meet their customers’ needs, improve the functionality of the product and be more appealing to the end user.
Our product design engineers have experience in medical product design, consumer electronics product design and industrial electronics and mechanical design.
Our extensive background in product development and startup management provides key insights into the success of your product-based business. To learn more about how we can help you measure and manage your product’s success, contact us today.