Product Performance Metric

Overview

The Product Performance KPI ranks product sales based on revenue performance to inform your sales team which products are selling well. At the same time, you should rank the poorest performing products to determine which products are failing to resonate with your customers.

When monitoring this KPI, it's important to consider the specific contexts surrounding each product. For instance, is a certain product receiving a boost due to a viral marketing campaign? Or, are you experiencing a slump because your competition is offering a similar product at a lower price?

Product performance doesn't always map directly to revenue performance. For instance, low price, high volume products may account for more than 50% of your products shipped and be essential to your business model, but these products may not crack into the top 5 products in terms of revenue. As with any KPI, you need to use measures and metrics that are consistent with your business model and objectives.

Key terms

• Revenue: The total dollar value of revenue generated over a specific time frame.
• Units sold: The total number of units of a specific product sold. See also, "Units per Transaction."
• Purchase value: The total dollar value of each purchase order. See also, "Average Purchase Value."

Success indicators

• Increase in product sales revenue.
• Increase in number of units per order.
• Increase in the average dollar value of each purchase order.