9 Essential Product Development KPIs to Drive Business Growth

Product development KPIs are specific product management metrics that track and monitor business performance and give vital insights into the product development process.

They serve as a powerful tool for product developers by providing quantitative data on product quality, progress, and performance.

But what are product development KPIs? And how do you decide which metrics to track to streamline the product development process.

What are Product Development KPIs?

Product development key performance indicators (KPIs) are product management metrics that track and monitor the product team’s performance. They are used to measure the progress of projects and behavioral changes and identify opportunities for improvement.

Companies that track KPIs can gain control over their product development and better manage teams to maximize output.

Since KPIs are tied to corporate business goals, they accurately reflect the performance of the business and whether your team is on track.

Why Should You Track Product Development Metrics?

Many businesses may rely on external data or market trends to see how well they’re performing in an industry. But, primary data collected from the organization’s performance helps teams know what to focus on and validate if they’re on track and improving.

The insights gained from setting and tracking product development KPIs lead to many benefits, such as:

  • Getting an accurate measure of business performance
  • Improving employee engagement and morale
  • Helping make decisions that align with business goals
  • Optimizing the product development process
  • Analyzing regular trends and patterns in performance

However, to gain the above benefits with product development KPIs, the metrics you track must be aligned with the company’s broader goals.

According to a survey conducted by Google, “95% of leading marketers agree that to truly matter, marketing analytics KPIs must be tied to broader business goals.”

For example, if your main goal is to drive more customers to the business, you might not want to set goals that focus on revenue generation.Below, we discuss what metrics are worth measuring and monitoring, because they give you an accurate report of your business performance.

9 Essential Product Development KPIs to Track Business Growth

It can be easy to overcomplicate which metrics you should track, as not every KPI you achieve accurately reflects the progress of your business.

That’s why it’s important to select the best KPIs that align with your broader business goals and give you vital insights into the production process.

Product development KPIs can be broken down into two types: strategic and tactical. Knowing the difference between the two can help you select which metrics to target.

Strategic Product Development KPIs

Strategic KPIs measure the long-term organizational results of product development. These metrics indicate the output of the organization as a whole, rather than focusing on the product development team, and are measured over a long period.

New Product Releases

This product development KPI looks at how many products a business was able to launch. The company will track the number of products they’re releasing over a period of time, e.g. a year.

A low number of releases could indicate slow or lengthy development. Businesses can use this value to judge if the level of production helps them reach their goals or to identify optimization opportunities.

Companies can also use this number to see how many new products they are releasing compared to their competitors. Looking at their competitors will help them understand their position in the industry and what they can do to gain an edge.

Before tracking this metric, be advised that a high number of releases may not always be desirable. If you operate in an industry like construction, building and launching a new house would naturally take more time than developing a new app, so make sure to consider external factors when tracking new product releases.

New Product Releases = Amount of new product releases within X time

New Product Sales

New product sales are a product development KPI that keeps track of the gross amount of sales of a new product release. Before tracking this metric, product teams decide on what they consider a “new” product.

Knowing the lifespan of your product can help you understand when a product is considered new. For most companies, a new product is one that has been actively placed in the market for 2-3 years.

Using this KPI will show you how newer products compare with your older ones. It will also help you to filter out bottlenecks with new product launches.

For example, suppose the product is high quality but still didn’t grab customer attention. In that case, it might be that it wasn’t marketed properly or your competitors were able to produce a better product.

If it wasn’t the latter, then you may need to revise your product development process. You can encourage the product team to be innovative or invest more in R&D to increase new product sales.

New Product Sales = Gross amount of new product sales within X amount of time

Customer Satisfaction Score (CSAT)

Customer satisfaction or net promoter score helps businesses measure the overall customer experience. This is a useful metric that indicates how many customers were satisfied with a product.

Companies can start tracking CSAT by conducting customer surveys. These surveys contain subjective questions that solicit the users’ honest opinions about how well a product was able to satisfy them.

Customer feedback from surveys can include open-ended questions that are cross-checked with other data or number scales to rate the features of a product from 1-10 or 1-5.

CSAT = Number of positive responses from customers x total number of survey responses.

Return on Investment (ROI)

Return on investment is a very common product development KPI used to measure how much money a product generated relative to the amount of money that was spent in developing it.There are different methods to calculate ROI, but the basic one is:

ROI = Net return on investment/cost of investment x 100

Research & Development as a Percentage of Sales

Investing in R&D is essential for any successful product. It’s the main element that caused Google to surpass Yahoo! as the most popularly used search engine.

Despite the value of R&D, businesses need to measure how these costs are impacting their products. This metric helps ensure that R&D spending is translating to higher sales or profits.

R&D as a percentage of sales is a product development KPI that tells product teams if the money they spend on making a product better is worth it.

You should typically aim for a higher percentage, as this means that your investment in R&D is effectively contributing to the success of the business.

High R&D expenditure can also be a sign that a company is innovating more and may gain a competitive edge in the market.

Research & Development as a Percentage of Sales = Amount of R&D expense/gross amount of company sales

Tactical Product Development KPIs

Tactical KPIs measure the short-term results of product development. They indicate the output of product teams, individuals, or processes and are used to evaluate employee behavioral and structural changes.

Team Velocity

Team velocity refers to the rate at which a product team can burn down story points. Tracking this product development KPI gives a product manager many valuable insights to work with.

Agile teams can use this metric to assess performance and better estimate the time taken for future sprints. It also gives product owners a good idea of the team’s capabilities and identifies improvement opportunities to help manage tasks.

A high team velocity indicates that teams, on average, can quickly get tasks done and complete a project. On the other hand, a low team velocity can indicate bottlenecks and flaws in the process, or it could mean that the employees are not as skilled enough to quickly burn down story points.

Team velocity = Average number of story points retired per sprint

On-time Delivery

On-time delivery measures the team’s performance against the deadlines for each release. This product development KPI is measured in days and helps teams better predict deliverables and meet customer expectations.

Tracking on-time delivery will help you understand how accurate teams are in estimating the time taken for a project.

Better predictability of the completion of a project leads to higher business and customer confidence and helps understand why projects may be delayed.

Sprint Burndown

Sprint burndown shows the progress of agile development and how many tasks are left before the completion of the project.

Scrum teams can plot sprint burndown on burndown charts that help visualize the story points that have been completed. You can download TCGen’s deliverable hit rate chart, for a template.You can use this chart to track the rate of task completion.

Measuring sprint burndown helps teams keep track of the project and stay on schedule. It is best applied in complex projects with many tasks.

Effective Resource Allocation

Effective resource allocation tracks how efficiently your team uses resources to maximize output. This is a useful metric to track as it gives insights into the product development process by highlighting how resources are being used to develop products.

When measuring this metric, it’s important to track only your core products. Core products vary from business to business, so you have to decide on which products you consider essential to your final deliverables.

Story Points Retired

Story points retired looks into how many story points a team can complete within a set time frame.

This KPI gives you an idea of how many tasks a team can complete and thus can be measured to find performance improvements.

Knowing how many tasks a team or team member has completed can help evaluate the performance of the organization. Tracking and sharing this info with employees can show them how they are progressing and what they can aim to improve.

You can measure this KPI in the following ways:

  • # of story points retired in a given sprint
  • # of story points retired per team member

Best Practices for Setting Product Development KPIs

Knowing about product development KPIs isn’t enough. Many project managers overcomplicate metrics and fall into measuring things for the sake of measuring them.

Instead, you should follow a few guidelines when setting product development KPIs for your team.

Some best practices:

  • Keep it simple – Only track the metrics that align with your end goal. Don’t track metrics just for collecting data. Rather, consider why measuring a particular metric would help you to better achieve your broader business goals. More data doesn’t always equal better performance, so pick a few metrics and stick to tracking them over time.
  • Use dashboards – Project management software will give you access to your dashboard. This dashboard can be used to arrange all your information, insights, and data in one place. Use dashboards to efficiently manage the data you collect from tracking KPIs.
  • Prioritize KPIs – Some KPIs may bring you more value and have a direct relationship with the success of your business. These KPIs should be your top priority. Make sure to track and improve these first and foremost, as these will bring your business the most positive impact.
  • Choose practical metrics – Rather than investing time and money to collect subjective, intangible data, it’s more beneficial to collect quantifiable data. Quantifiable data can be measured and compared easily. This makes it useful for evaluating your business performance and accurately seeing how well your business is performing.

By following the above rules of thumb, product management teams can prioritize the KPIs that contribute to the success of your business.


Product development is a risky process, and it can be difficult to keep track of project schedules, team performance, and the business’s long-term goals.

For this reason, project managers rely on product development KPIs to measure and track employee performance. There are many KPIs to track, but using the critical few gives valuable insights into business performance.