What KPIs Are You Tracking for Engineering and Product Development?

You know that awful moment when someone asks how your product is doing and you’re hunting for numbers that actually matter? We’ve all felt it - lost in dashboards stuffed with vanity stats while the real story stays hidden.

The reality: most teams track far too much that doesn’t move the needle and overlook the few metrics that truly guide decisions. This guide trims the clutter so you can pinpoint, roll out, and actually use KPIs that show if your product is winning or slipping - and, even more importantly, what to do next.

Why KPIs matter in engineering and product development

Let’s be honest: KPIs are basically scorecards - but they’re the kind that can make or break your product. When teams rally around the right measures, product, engineering, and leadership gain a common language - suddenly everyone is pulling in the same direction.

Without solid KPIs, you’re flying blind. It might feel like things are fine because users aren’t shouting, but are you moving the business needles that matter? I’ve seen teams high-five on-time launches while retention quietly sinks - that’s what happens when you track activity instead of impact.

What can strong KPIs actually do?

  • Force frank conversations about what success really means
  • Give you cover to cut features that aren’t working
  • Create accountability that goes beyond “we shipped it”
  • Surface issues early - before they turn into fires

Teams with clear KPIs often ship much faster - think on the order of 40% - because they stop debating what to build and let the metrics guide them. The hard part is picking the right ones; even seasoned PMs struggle to choose measures that reflect true product health rather than mere activity.

The key insight: not all KPIs are equal. Some tell you if you’re winning the war (strategic KPIs), while others show if you’re winning today’s battle (tactical KPIs). You need both - and knowing when to emphasize which is what really matters.

Understanding strategic vs tactical KPIs

Think of strategic KPIs as your North Star - they show whether you’re building something people will pay for long term. According to TCgen's research, examples include customer lifetime value, market share, and product-market fit.

Tactical KPIs are day-to-day health checks - on-time shipping, bug rates, team burnout - and they keep execution sharp. Capicua team says these metrics keep execution sharp even when the strategic outlook looks strong.

Here’s the catch: you can ace the tactical set and still build the wrong thing. Teams often celebrate sprint velocity while churn creeps up. You need both working together.

How the mix should shift:

  • Early stage: ~70% tactical (can we build it?) and 30% strategic (should we build it?)
  • Growth stage: 50/50 between execution and market impact
  • Mature products: ~70% strategic (position, revenue) and 30% tactical (efficiency)

Atlassian learned this the hard way - optimizing for speed added complexity. Sometimes the best feature is the one you don’t ship.

Must-Track KPIs for Engineering and Product Teams

  1. Return on Investment (ROI)

ROI is the scorecard that delights CFOs and rattles PMs. Bottom line: are you making more than you spend? Timing makes it messy - a $100K feature might yield $500K over two years, but five $20K features each returning $150K could be better. Smart teams track ROI at both the feature and product levels.

  1. Product quality and performance

Quality rarely headlines meetups, but it should. Teams that track it systematically see far fewer critical issues. Focus on: load time – every second costs users; error rates – broken features kill trust; accessibility – not optional anymore; and security vulnerabilities – one breach can sink you.

The sleeper metric: time to resolution. Things will break; how fast you fix them is what counts.

  1. Team velocity and sprint burndown

Velocity gives a sense of how much work a team gets done in each sprint, but it doesn’t necessarily reflect whether the right outcomes are being achieved. The real value comes from looking at the trend over time instead of the raw number. If a team regularly finishes about 60 story points per sprint, that sets the baseline, and noticeable drops often point to growing technical debt, exhaustion in the team, or requirements that are becoming less clear. Sprint burndown charts, on the other hand, make it obvious whether the team is likely to deliver what was committed.

Caution: When the chart shows a sharp drop near the end instead of a steady decline, it usually highlights flaws in sprint planning rather than in execution.

  1. Customer retention and lifetime value

Retention is the clearest signal of long-term success - users either return or they don’t. Lifetime Value (LTV) measures how much a customer is worth over their time with your product, calculated as average purchase value multiplied by purchase frequency and customer lifespan. If LTV is greater than the cost of acquiring customers, you have a business; if not, you have a hobby.

The harsh reality is that many products fail because they chase acquisition while neglecting retention. Growth rates may sound exciting, but churn is what truly determines survival.

How to Set Up and Use Winning Product Metrics

No big secret here: nailing your KPIs is common sense, but most teams still drop the ball. Here's your casual guide to dodging the usual mistakes:

  1. Keep Your KPIs Connected to the Bottom Line

First, every single KPI must link to a business outcome. You should start with your company's biggest goals and work backward. For instance, if the company needs to boost revenue by 20%, your product's KPIs have to show exactly how you're personally contributing to that 20%.

  1. Keep the List Tiny

Next, don't track too many metrics. Atlassian's teams learned that tracking more than 5 to 7 core metrics just leads to brain freeze - you can't make a decision. The metrics you choose should be ones you'll:

  • Actually check out every week.
  • Use to drive real decisions (not just fill out reports).
  • Be ones the whole team understands.
  1. Make Them Instant

The Monday.com community are spot-on: real-time dashboards are a must. If checking your KPIs takes more than a quick 30 seconds, you'll skip it.

  1. Be Ready to Change Them (Often)

Nobody tells you this: your KPIs are going to be wrong when you first set them up, and that's totally fine! The best teams aren't the ones who get them right immediately; they're the ones who adjust fast. You should schedule a monthly KPI review to force your team to ask: Is this metric actually telling us something useful, have we been accidentally "gaming" the number, and what decisions did we truly make based on this data?

  1. Make It a Team Effort

Make KPIs everyone's job, not just the PM's. The real value shows up when engineers and designers see how their work directly affects key metrics like retention and conversion. Share all the numbers (the good and the bad) because transparency builds trust, and trust leads to better products.

Key Takeaway

Forget the idea that KPIs are just dashboard clutter. They are the crucial difference between making a tolerable product and one that users can't live without.

The key is to select metrics that are brutally honest, even if the truth is uncomfortable. Start small: pick 3 to 5 metrics that genuinely reflect success, track them religiously, and be ready to change them when they lose their value. The most effective KPI isn't the one with the highest number - it's the one that forces you to change how you work for the better.

Useful Resources