Setting product goals is essential for your product’s success. But the work does not end here. To ensure you attain your goals, you also need a way to measure the progress towards them.
In this article, you’ll find information about what product goals are and their importance, how to set them effectively, and how you can use metrics to measure success and make data-driven decisions.
No matter if you are a product manager, a product owner, or a developer, this article will provide you with the necessary tools to achieve your product goals. Let’s begin!
What are product goals?
A product goal is a bridge between the product vision and product development.
What does it mean? You will often see the product vision described as “broad”. That is because it represents the overarching goal of the product. Or to simplify it, it represents the general scope of the product.
To develop features that are aligned with the product vision, you must stick to something more specific than just a broad statement. Something that lets you check on a recurring basis if you’re going in the right direction, is achievable and allows you to measure success.
A product goal does exactly that. It connects the product vision to the features you’ll develop.
Why should you set product goals?
They show you the right direction
Your product’s direction is crucial for your development teams, stakeholders, and customers. Sometimes, the actions you take in order to achieve the product goals may not work out as planned. But the fact that you know what those goals are, and the direction your product should go in, will quickly put you back on the right path. In short, they keep everyone aligned toward the same objective.
They help you prioritize your work
For achieving the product goals, you will need to further break them down into smaller, straightforward initiatives that teams can easily deliver. These initiatives will build up your roadmap.
The goals help the product team and stakeholders to determine what are the most important initiatives that they should focus on and prioritize according to their goals.
For example, if your product goal is to increase the customer base by 20% in the next 3 months, the product team may prioritize initiatives that directly address that goal such as:
- Improving the user experience in certain areas of the product
- Conduct user research to better understand user’s needs
- Focusing on including better features than the competition
The beauty of product goals is that they give the development team and the stakeholders the opportunity to make informed decisions about what should be included in each iteration or release of the product. At the same time, they allow you to prioritize the most important functionalities and allocate resources effectively.
They help you measure progress
Goals will provide your development team with a measurable target they can work towards.
It will help them track their progress and make informed decisions about when and what they will include in an iteration or release.
For example, if your product goal is to improve its performance and quality, the development team may decide to prioritize certain initiatives related to slow-loading pages, slow database queries, redundant and inefficient code, and so on.
How to set product goals?
Now that you know why setting goals before starting any development work is so important, take a look below at the steps you should take in order to set them.
Step #1: Define your product vision
The product vision is a high-level statement that provides clear information about the desired state of the product. To set the goals, you first need to know what your product’s vision is. In my last article about product vision, you can find detailed steps about how you can create this statement.
Step #2: Identify the potential market
Who will use your product? This information helps you set goals that are aligned with the needs and expectations of your audience. You can conduct market research to gather information about potential customers, through surveys, focus groups, or competitor analysis.
For example, as a result of your research, you may find out that your audience finds it difficult to complete specific tasks. So, you may set a goal for your product to improve user satisfaction by reducing the average time it takes to complete a task by 40% in the next 3 months.
Step #3: Define the product goals
A goal is a clear statement of what the product is expected to achieve in relation to the overarching product vision. It should be specific, measurable, achievable, relevant and time-bound (SMART).
Here’s an example:
Imagine you have developed a CRM application that allows companies to organize their leads and automate repetitive tasks.
Product vision: Enabling large companies to seamlessly organize and monitor their leads, while cutting down repetitive administrative tasks, with the help of artificial intelligence.
Product goal: Increase product engagement by 20% in the next 6 months.
Is this a SMART goal? Let’s see.
- Specific: It’s easily understandable that you are aiming to increase product engagement by a specific percentage, within a specific time frame.
- Measurable: Is the goal measurable? You can track the product engagement with analytics tools, user activity data, or A/B testing and compare it with your target, which in this case is a 20% increase. You also have defined the timeframe to obtain this, which is 6 months.
- Achievable: The product is on the market so it already has a level of engagement that can increase through specific initiatives. The goal defined here is realistic and attainable.
- Relevant: To check if your goal is relevant, you can compare it against the product vision. In this case, the goal is relevant because increasing product engagement is very likely to increase product adoption.
- Time-bound: The deadline you have specified for the goal is 6 months. This helps you make sure that you progress toward the goal on time.
Step #4: Prioritize the product goals
There are several criteria you can rely on to prioritize the product goals, such as:
- User needs – You can assess what goals have the greatest impact on user engagement and satisfaction.
- Resource constraints – Consider the resources available and the potential impact their distribution will have on the product.
- Data-driven decision making – Measuring your goals can help you in the future with other goals that you set. You can look at data and analytics that you have applied to your previous goals to evaluate their success. Based on this information you can gather insights that will help you prioritize your next goals.
- Stakeholder input – There are many valuable insights stakeholders can provide, thanks to their expertise, different perspectives, and new ideas.
Step #5: Set up metrics
What does success look like for you? Once you have established this, you can measure the progress toward the goals you set. There are many metrics you can choose from, you can read more about this below.
Step #6: Allocate resources
To build a product, you need budget, people, and technology. All of these support the achievement of your goals.
Step #7: Monitor progress:
Watch the progress you make towards the goal you’ve set, with regularity. By doing this, you have the opportunity to adjust when needed.
The sooner you know that you have to adjust something, the more likely it is to stay on the right path and stay aligned with the needs and expectations of the target market.
Common types of product goals?
There are several types of product goals you can set, depending on what your product vision is and what you’re trying to achieve. Let’s have a look at what the following types of goals are focusing on.
- User satisfaction – building a product that meets the needs and expectations of its target users.
- Time to market – reducing the amount of time it takes for a product to go from concept to production.
- Scalability – ensuring that your product will perform and support high demand and usage over time.
- Security – offering a product that is secure and protects sensitive user data.
- Performance – creating a product that is fast, responsive, and can handle complex operations.
- Integration – building a software product that can seamlessly integrate with other systems and technologies.
- Innovation – creating a product that differentiates itself from competitors and offers unique and innovative features.
- User adoption – users stay and regularly use your software product.
Why set measurable product goals?
Think of it this way. You set a goal that only says this: Increase product engagement. And you start working on new features that you think will make your customers more engaged with your product. Can you answer the following questions?
- How many features will you build?
- How much engagement is enough?
- By when you have to obtain this increase to declare it a success?
- How much time and budget can you invest in it?
How about if your goal were: Increase product engagement by 20% in the next 6 months. Can you now answer the questions above?
You know how to best prioritize your initiatives and what features to build first because you know what is your target. You know when to stop and reassess what you do next and you can assess where you stand in terms of budget because you have set a deadline of 6 months.
How to use metrics to monitor product goals status?
Product goals and goals metrics may seem like they’re the same thing. But in fact, they are two different concepts.
While product goals are the objectives you plan to reach, the metrics are the quantifiable measures used to track progress toward reaching these objectives.
For example, if your goal is to increase product engagement by 20% in the next 6 months, you can set up a metric that tells you how many active users you have during this period of time and see progressively the increase.
Here’s what you need to do in order to track your goals:
Step #1: Define metrics that measure progress towards your product goal. For each product goal, identify the right metrics to measure progress.
How do you find the right metrics, you may ask? It depends on your goal. Say your goal is related to improving user acquisition and retention. You can use a conversion rate metric that measures the number of signups or purchases of your service.
Step #2: Track the metrics and report on their progress towards the targets with regularity. You can do this through automated dashboards, spreadsheets, or regular status updates.
Step #3: Analyze the metrics over time to understand the way your product is performing and if the goals are being met.
Step #4: Use the insights you gather from the metrics to inform your decision-making process and prioritize areas for improvement.
This is a list of the most common metrics:
- Usage metrics – to find out how much your users interact with your product, you can look at the number of active users, session length, and frequency of use.
- Engagement metrics – to measure user interaction and involvement with the product you can choose to look at the number of likes, comments, shares, and other forms of user interaction.
- Conversion metrics – if you want to know how many users purchased or signed up with your product, you can follow the conversion rate, average revenue per user, and customer lifetime value
- User satisfaction metrics – to understand the level of user satisfaction you can choose to look at user satisfaction with the product, such as Net Promoter Score (NPS), user ratings, and feedback.
- Feature usage metrics – to see what features are mostly used, you can set metrics for the number of users who use a particular feature and the frequency of use.
- Business impact metrics – to measure the effects of the product on the company’s financial performance and overall business objectives, you can track the revenue, cost savings, and ROI.
- Technical performance metrics – to measure the efficiency and effectiveness of a product’s underlying technology and infrastructure track the loading time, error rate, and system availability.
Don’t forget that apart from product goals and product vision, to make the best decisions when you implement your product, a good strategy is also a key element. But more about strategy, you will find out in my next post.