Connecting Product Effort to Business Success

Goals, Business metrics and Product metrics

One of the hardest parts of being a PM is proving the impact you and your teams make. Many product teams track product usage, customer feedback, and release timelines, but these metrics alone don’t tell the full story.

To make data-driven product decisions that actually support business priorities, you need to understand three interrelated elements:

1. Goals: define what success looks like
2. Business metrics: measure the company's overall performance
3. Product metrics: track how users interact with the product and influence business outcomes

Each of these should play a critical role in your efforts to ensure that product work contributes to real business value rather than just feature releases. Let’s break them down.

Goals link strategy and execution

A goal is a clear and preferably shared statement of what a company or team intends to achieve. In the context of product management, goals ensure that product work is purposeful and outcome-driven.

Effective goals help you turn big-picture business objectives into actionable product work, but it’s key to get them right. Poorly defined goals can lead to wasted effort, while well-crafted goals bring alignment between product teams and the company’s overall strategy. For example:

• Poorly defined goal: Improve the onboarding experience (vague, no measurable impact)
• Well-defined goal: Reduce time to value by 20% to increase free trial conversion (measurable, business-focused)

Goals should be specific, measurable, and directly tied to business success. This is where business metrics come in.

Business metrics are the company’s scoreboard

Your leadership team isn’t thinking about sprint velocity or user engagement (sure, we know reality is sometimes different). What they are concerned about is things like revenue, profitability and growth. Business metrics track your company's overall health. These are the numbers the leadership (and let’s not forget about investors) focuses on when assessing performance.

Unlike product metrics - which measure how users interact with the product - business metrics focus on financial and operational success. These are typically lagging indicators, meaning they reflect past performance rather than predicting future trends.

Here are some common business metrics for SaaS companies that every PM should be familiar with:

These metrics are what your leadership cares about - or let’s be real: should be caring about. If you as a PM aren’t thinking about these metrics, you’re not thinking about how your product impacts the business. In other words: what makes your product successful. But business metrics alone don’t tell why the needle goes up or down. That’s where product metrics come in.

Product metrics: leading indicators of business success

While business metrics tell you what happened, product metrics help you explain why those outcomes happen, predict what’s going to happen, and more importantly, tell what you can do about it. These are the numbers product teams focus on to track how users engage, adopt, and retain the product.

Unlike business metrics, product metrics are leading indicators meaning that they help predict changes in business performance before they show up in revenue, churn, or profit. For example:

• A drop in activation rate might signal higher churn in the near future
• An increase in feature adoption could indicate higher CLTV down the road

Here’s how product metrics connect to business metrics:

When product teams track the right product metrics, they can identify and fix problems before they show up in financial reports.

Bringing it all together: Be a mini-CEO

Product managers shouldn’t just own the backlog. They should think and act like a CEO and take ownership of business outcomes. Setting goals that can be tracked by business metrics, which can be predicted by product metrics is the foundation of outcome-driven product management and data-driven product decisions. This is what can separate PMs who just ship features from those who contribute to a company’s future.

What’s next?

However, knowing the metrics is only half the battle. The next step is learning how to set the right goals (that aren’t outputs) so that your team’s work has a direct and measurable impact on business success.

In the next article, we’ll break down goal-setting frameworks like OKRs, HEART, and North Star Metric, showing you exactly how to apply them in your product strategy. Stay tuned!

As you ponder about Product and explore the potential within your product management practices, remember that you're not navigating these waters alone. We, the 25Friday team, are dedicated to guiding tech companies through the maze of product strategy. With our expertise in consultancy and nearshore development, we partner with organisations to fine-tune their product vision, align their teams, and craft strategies that resonate in today’s dynamic market. Reach out to us, and let's work together to turn your product challenges into successful ventures that stand out in the tech landscape.