Melissa Perri on Why Most Product Teams Track the Wrong Metrics

In a recent LinkedIn post, Melissa Perri, founder of Product Institute, highlights a common pitfall among product managers: the ineffective use of metrics. Perri observes that while most product professionals use metrics, very few are confident that they are tracking the *right* ones.

Drawing on her extensive experience coaching product teams, Perri identifies a consistent pattern. “They can tell me what they track but they struggle to tell me why that metric, why now, and what decision it’s actually informing,” she writes.

The Three Roles of Effective Metrics

Perri asserts that metrics should serve three fundamental purposes for a product: to guide its future direction, to monitor its current health, and to communicate its status to stakeholders. However, she contends that many teams fall short, primarily focusing only on the communication aspect.

“Metrics should do three things: guide where the product is going, monitor whether it’s healthy, and communicate status to stakeholders. Most teams are only doing the third. Their dashboards are full and their thinking is empty,” Perri explains.

Understanding Leading vs. Lagging Indicators

A key challenge Perri identifies is the common misunderstanding and misapplication of leading and lagging indicators. Lagging indicators, such as revenue, churn, and Net Promoter Score (NPS), reflect past performance. In contrast, leading indicators, like activation rate, feature adoption, and time to value, offer insights into future trends.

Perri warns about the dangers of an over-reliance on lagging metrics. “If you only track lagging metrics, you find out too late,” she states, emphasizing the need for forward-looking data to enable proactive decision-making.

The Skill Gap in Metric Interpretation

The core issue, according to Perri, is not a lack of data but a deficit in the skills required to interpret and apply it strategically. She posits that the most effective product managers can articulate the connection between any given metric and the overall product strategy.

“The best PMs can sit down with any metric on their dashboard and explain exactly how it connects to their strategy. Most can’t,” Perri points out. She concludes that this disconnect represents a significant skill gap within the product management discipline.

Bridging the Gap with Education

Perri suggests that addressing this skill gap is crucial for product teams aiming for genuine data-informed decision-making. She notes that this topic is a core component of the curriculum at Product Institute’s Metrics course.

Concluding her post, Perri prompts reflection from her audience: “What’s one metric you track that you’re not sure you’d fight to keep if someone challenged it?” This question encourages fellow product professionals to critically evaluate their own metric usage and identify areas for improvement.