Value Stream Success Metrics
Value Stream Success Metrics are quantitative and qualitative indicators selected by Product Teams to measure the impact of product features and functionalities delivered in a value stream. These product-level metrics are derived from broader business metrics and are tailored to reflect customer behaviours and product usage.
Purpose
The purpose of defining Value Stream Success Metrics is to provide a clear and measurable way to evaluate the effectiveness of product initiatives and their contribution to business goals.
- Align Product Development with Business Goals: Ensure that every product initiative contributes to overarching business objectives.
- Measure Effectiveness: Provide a clear measure of how well the product features meet user needs and contribute to business success.
- Drive Continuous Improvement: Identify areas for improvement in the product to enhance customer satisfaction and business performance.
Examples
| Metric | SaaS Products | Traditional Software | Physical Products | E-commerce Products | Mobile Apps |
|---|---|---|---|---|---|
| Revenue Metrics | Monthly Recurring Revenue (MRR) | Annual License Revenue | Sales Revenue | Sales Revenue | In-App Purchases Revenue |
| Customer Retention Metrics | Churn Rate | License Renewal Rate | Return Rate | Cart Abandonment Rate | Retention Rate |
| Customer Satisfaction Metrics | Customer Satisfaction Score (CSAT) | Customer Satisfaction Score (CSAT) | Customer Satisfaction Score (CSAT) | Customer Satisfaction Score (CSAT) | App Store Ratings and Reviews |
| Usage Metrics | Active Users | Software Utilisation | Product Usage Rate | Conversion Rate | Daily Active Users (DAU) / Monthly Active Users (MAU) |
| Quality Metrics | Bug Resolution Time | Bug Resolution Time | Product Quality Metrics | Product Page Load Time | Crash Rate |
| Financial Performance Metrics | Customer Acquisition Cost (CAC) | Customer Acquisition Cost (CAC) | Inventory Turnover Rate | Cost per Acquisition (CPA) | Customer Acquisition Cost (CAC) |
| Market Reach Metrics | Feature Utilisation Rate | Feature Utilisation Rate | Distribution Breadth | Visitor Traffic Sources | User Growth Rate |
| Feedback Metrics | Net Promoter Score (NPS) | Net Promoter Score (NPS) | Net Promoter Score (NPS) | Net Promoter Score (NPS) | Net Promoter Score (NPS) |
| Cost Metrics | Cost of Goods Sold (COGS) for SaaS | Development Cost | Cost of Goods Sold (COGS) | Cost of Goods Sold (COGS) | Development Cost |
Anti-patterns
- Ignoring Context: Defining metrics without understanding the broader business strategy and customer needs.
- Vanity Metrics: Focusing on metrics that look good on paper but do not translate to real business value.
- Static Targets: Setting targets that do not evolve as the product and market conditions change.
- Data Overload: Collecting too many metrics that complicate decision-making rather than clarifying it.
- Siloed Metrics: Metrics that are managed without cross-functional communication and collaboration.