One of the common challenges faced by even senior product managers is knowing how to correctly set, measure, and track input and output metrics. However these metrics play a crucial role in defining what success looks like, and having clearly defined and well understood input and output metrics is one of the most important tasks for a product manager. So, how can we define input and output metrics?
Simply put, output metrics define what success (or failure) looks like for a given product, while input metrics are the levers you control that realize it. In other words, output metrics are the ultimate goals we strive to achieve, while input metrics are the steps we take to get there.
Not only is clearly and correctly defining your input and output metrics important for you as a PM, it is also key in communicating to the relevant stakeholders the impact the product is intended to have, and how much of it was realized after release. By regularly monitoring and analyzing these metrics, we can gain a better understanding of what’s working and what areas need improvement in order to reach our goals. In this blog, we’ll be exploring the role of input and output metrics in product development and how they can impact the success or failure of a product. We’ll also be providing tips on how to set these metrics effectively so that they can guide you and your team in the right direction.
What are Input Metrics in Product Management?
Input metrics are the various elements that feed into an output metric. These can include things like the number of sales leads generated, the amount of customer feedback received, and the number of features added to the product. Essentially, input metrics are the building blocks that contribute to the overall success of the product.
It’s important to carefully consider which input metrics to track in order to effectively measure the success of your product. For example, if your output metric is to increase customer satisfaction, you may want to track input metrics such as the number of customer support tickets resolved or the percentage of positive customer reviews. By regularly monitoring and analyzing these input metrics, you can gain a better understanding of what’s working and what areas need improvement in order to reach your ultimate goal.
Let’s take another example. Imagine you are building Youtube’s first content recommendation algorithm. The goal of the product is to increase the time users spend on youtube by showing relevant content to the user. Some possible input metrics could be:
- The number of clicks on recommended videos
- The average viewing time for recommended videos
- The number of likes and comments received on recommended videos
- The number of shares of recommended videos on social media
- The click-through rate (CTR) for recommended videos
Notice that these metrics themselves do not directly define the success or failure of the product, however the success of the product could not be had without these metrics being influenced.
By regularly monitoring and analyzing these input metrics, product managers can gain a better understanding of how well the recommendation algorithm is performing and what areas might need improvement in order to reach the ultimate goal of increasing the time users spend on Youtube.
For example, if the average viewing time for recommended videos is low, this could indicate that the algorithm is not effectively surfacing relevant content to users. In this case, product managers may want to consider gathering additional user feedback or adjusting the algorithm to prioritize different factors in the recommendation process.
What are Output Metrics in Product Management?
Output metrics are the key/success metrics that product managers use to define how the product will be considered successful or not. Generally, the output metric is defined first, followed by understanding which input metrics are the most important to it.
Using the example of Youtube’s recommendation algorithm, some output metrics might be:
- The number of daily active users on Youtube
- The retention rate for new users
- The revenue generated from ads shown during recommended videos
- The average session duration for users
While these output metrics might all seem relevant to the goal of the project, be aware not to set too many output metrics for the same product/feature. The more specific and intentional you are with setting your metrics, the more clear the intended impact and therefore, the more clear the direction of the project.
How to identify and set the right input and output metrics
Understanding how to set the right input and output metrics starts with a deep understanding of the objective of the product and the problem you are solving. Take some time to think about the business goals your product is intended to support and what impact you want it to have. This will help you identify the most relevant and meaningful metrics to track.
From the goal, determine what success will ultimately look like. This can be achieved through looking at the relevant data to reveal the size of the problem and the opportunity. Choose an output metric that reflects the impact you want your product to have and one that can be easily measured and tracked.
It is important to note that when setting both input and output metrics, they should be specific and quantifiable. For example, always make sure to capture the as-is state and describe the to-be state. For example, “Increase the average session duration for users from 1 minute 30 seconds to 2 minutes.” Not only does this make the objectives more clear, but it also forces you to take a stance on your product.
Additionally, a common pitfall when defining metrics is to get overwhelmed by all the different types of metrics that are available to you to choose from. Some input metrics will be the output for others, and vice versa. Don’t get bogged down by this complexity- rather go back to the problem statement and the solution you have defined for clarity on which metrics are the best that support it.
Lastly, it is important to set realistic and achievable targets for your metrics. Setting unrealistic targets can lead to the appearance of failure when in fact, a lot of success has been achieved. Likewise, setting targets too easily may lead to complacency and lost opportunity.
After setting your input and output metrics, make sure to regularly review and evaluate them. As time goes, business goals will change and so will your product goals. It is important to regularly review and adjust your metrics to ensure that they are still relevant and meaningful. This will help you stay on track and stay agile.
In summary, input and output metrics play a crucial role in the success or failure of a product. It’s important to carefully consider and set both input and output metrics in order to effectively measure and track the progress of your product. By regularly reviewing and adjusting your metrics, you can stay on track and make necessary adjustments as needed.