The Problem with Metrics Articles
When preparing for product case questions, articles like this one from Hubspot can be miss leading. They give candidates a neat list of metrics that they try memorizing. But that isn’t what an interviewer is typically looking for.
The typical result in a list like this:
Customer Retention Rate
Customer Churn
Revenue Churn
Existing Customer Growth Rate
Repeat Purchase Ration
Product Return Rate
Days Sales Outstanding
Net Promoter Score (NPS)
Time Between Purchases
Loyal Customer Rate
Customer Lifetime Value
and a link to a calculator.
Why It Doesn’t Help
The problem with this list (and the calculator) is it will not work for you on interview day. You need to be able to talk about how you would actually measure each of these metrics. And you need to be able to do so without getting overly complicated.
If you read the article linked above, you will see the following calculation:
Customer Retention Rate = (Customers at the End of the Period) - (New Customers Acquired) / Customers at the Start of the Period
Now in your next mock interview, try listing and explaining this metric without losing your listener.
It is probably better to say I would track:
# customers at the end of month/quarter/year
# newly acquired customers for the month month/quarter/year
Then, if needed, I could use the above to calculate retention (# Customers at end of month) - ( # New Customers Acquired in the month) / #Customers at the Start of month
You don’t want to just say churn. You want to show you know how to measure churn.
# customers/users unsubscribing for the month
# customers/users without any activity during the month
# customers/users active during the month
If I was using this list for a product interview, I would probably make the following modifications:
# active customers where active mean X behavior taken per d/w/m
# inactive customers where active mean X behavior taken per d/w/m
# customers who unsubscribed per d/w/m
Revenue per d/w/m
# new customers subscribing/signing up/activating
# Daily active users, # Weekly Active Users, # Monthly Active Users
# customers not paying on time
Net Promoter Score (NPS)
# days between purchases (I don’t like most averages for case interviewers but might use that here as want as customer not platform number)
Note: Unless a growth PM interviewing with a growth metric question, I probably wouldn’t get into customer lifetime value (CLV) because it is a multiple variable equation. Maybe Cost of Acquisition as
$ spent on marketing
# new customers
but even that is truly more complicated.
Most product metrics questions are about understanding the user flow or funnel and being able to talk about counts and other things that can be easily logged.
