Beyond NPS: The Rise of Product-Led Metrics

For years, NPS has been the go-to metric for gauging customer retention, but things are changing. While NPS still holds value, the evolving landscape demands a more comprehensive outlook. A new era of product-led metrics has taken charge and is leading the way as the torch-bearer of predictive CS metrics.

NPS, with its singular focus on recommendation likelihood, offers a limited perspective on customer growth. It fails to consider the nuances of product usage, customer behaviour, and the true drivers of success. To truly understand customer value and drive sustainable growth, customer success teams need to expand their metric outlook.

Enter product-led metrics, they shift the focus from broad sentiment to specific product interactions. By tracking how customers engage with your product, these metrics help you gain invaluable insights into product usage, feature adoption, and overall customer health. The data-driven approach empowers organizations to identify areas for improvement, optimize the customer journey, and ultimately drive higher customer satisfaction leading to retention & expansion.

Here are some of the most used product-led metrics to consider include:

• Product Qualified Leads (PQLs): Identify high-potential customers based on product usage behaviour.

• Feature Adoption: Measure how customers are utilizing key product features.

• Time to Value (TTV): Track the time it takes for customers to realize the product's benefits.

• Customer Activation: Assess whether customers are taking critical actions to unlock product value.

• Customer Lifetime Value (CLTV): Predict the total revenue a customer will generate throughout their relationship.

• Product Usage Benchmarks: Assess if customers are reaching key usage milestones within expected timelines.

These metrics help CS teams create a measurement framework, to develop a more holistic view of customer success. This enables CSMs to make informed decisions, optimize product features, and deliver exceptional customer experiences, ultimately helping customers get better and faster ROI.

Remember, while NPS is not obsolete, it should be complemented by a robust suite of product-led metrics. By adopting this broader perspective, you'll be well-equipped to navigate the evolving customer landscape and drive sustainable growth for your business.

What are your thoughts on the shift from NPS to product-led metrics? Share your experiences and insights in the comments below.

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