OFC ILY. OMG TMI, JK. LOL.
You may or may not be able to read that. And you may or may not care. But every community, industry, and discipline has its own lingo. And if you don’t speak it, you’ll have trouble keeping up with the conversations.
How well do you know the product manager lingo? If you want to be a product manager, you’ve got to talk the talk. To help, we’ve put together a list of common PM acronyms that every product manager should know.
API: application program interface
APIs are basically rules for how different software applications should interact. They’re useful for connecting separate apps to extend the functionality of your product.
For example, if you use Hotjar, APIs enable integrations that can automatically fire recordings or survey responses to a Slack channel or your Hubspot contact list.
ARR: annual recurring revenue
ARR is a key metric typical in SaaS and subscription businesses. It’s the money that comes in every year (annually) from all customer subscriptions. It’s the annual version of monthly recurring revenue.
CAC: customer acquisition cost
CAC is how much it costs to acquire a new customer. Simple versions include marketing and advertising costs. More complex versions also include software costs and employee wages.
Typically, you compare CAC with lifetime value (LTV)—see below. An LTV:CAC ratio of 3:1 is a good place to aim. That means the revenue you make from a customer is three times what you pay to acquire them.
CX: customer experience
CX is the sum total of all the interactions a customer has with your product and brand. It’s the feeling they get when they visit your website, use your product, see your ads, and talk to your customer success team.
DACI: driver, approver, contributor, and informed
DACI is a common decision-making framework, also used for managing projects. The letters stand for the roles of those involved:
Driver: the person who drives the decision or project forward
Approver: the person who has the final say on the decision or project sign-off
Contributor: people who will inform the decision-making process or contribute to the project
Informed: people who should be informed about the decision outcome or project progress, but who may not contribute directly to the process
A GTM strategy is your plan for how you’ll successfully launch your new product or feature. This can include your marketing and sales approaches, pricing, customer journey mapping, and anything else that will help get your product to the right people.
HEART: happiness, engagement, adoption, retention, and task-success
The HEART framework originated in Google’s user experience (UX) teams to help quantify user experience. It helps narrow focus to fewer key metrics with measurable UX outcomes.
JTBD: Jobs to be done
This is what a customer hires your product to help them do. Nobody wants software or tools, they want specific jobs done. For example, people don’t really want heatmaps and session recordings—they want product experience insights so they can make better product decisions.
KPI: key performance indicator
KPIs are your primary metrics. You may measure lots of things, but these are the numbers you care about the most. Examples might include CAC and LTV.
LSD: lean software development
LSD is an agile framework used to optimize and streamline software development. It’s often used interchangeably with the minimum viable product (MVP) strategy: release a minimum version to the market, get feedback, iterate, and repeat.
LTV: lifetime value
Sometimes called customer lifetime value. This is how much revenue a single customer brings over their entire relationship with your business. For example, if a customer pays $15 a month for 3.5 years, that’s:
LTV = 15 x (12 months x 3.5) = $630
MoSCoW: must-have, should-have, could-have, and won't-have
MoSCoW is a method to help with product prioritization. All desired features or improvements are classified into one of the four MoSCoW levels of importance. It’s especially useful for timeboxed projects with a fixed deadline to ensure focus on the crucial product features.
MRR: monthly recurring revenue
The amount of revenue generated each month from subscriptions, typically used in SaaS or other subscription businesses.
MVP: minimum viable product
An MVP is a simplified version of a product idea that you can put into the world to test. It doesn’t have to be refined or perfect, by definition it’s ‘minimal.’ But it must be sufficient enough to either prove or disprove your solution.
Spotify famously represented the MVP concept like this:
NPS: net promoter score
NPS is a common metric for measuring customer satisfaction. It quantifies how likely a user is to recommend your product to a friend or colleague on a 0-10 scale. It’s just two questions:
1) How likely is it that you would recommend [our company/product] to a friend or colleague?
2) Why did you give that number?
Based on responses, respondents are classified as Detractors (0-6), Passives (7-8), or Promoters (9-10).
OKRs: objectives and key results
A system used to set goals and measure progress. Objectives are big goals, followed by 2-5 quantifiable metrics, or results, related to a particular objective. By completing key results, you achieve your objective. OKRs are usually time bound to a particular quarter or year.
PLG: product-led growth
A marketing strategy where your product is the primary driver of new business. You let a potential customer try a product for free, for a trial period, or with a limited set of features, and then let that experience drive product adoption.
PM: product manager
A PM identifies the customer's needs and helps their team prioritize product improvements and development. Actual duties can vary widely across companies and teams.
PMM: product marketing manager
Not to be confused with a PM. A PMM is more of a storyteller whose job is to help bring the product to market. They take a product's value proposition and turn it into compelling messages.
RICE: reach, impact, confidence, and effort
The RICE scoring model is a prioritization framework. It helps product managers determine which products and features to add to their roadmaps.
SMART: specific, measurable, achievable, relevant, and time-bound
SMART is a goal-setting method that helps define objectives that make sense and can be tracked in a certain period of time. For example:
Our goal is to [quantified objective] by [deadline]. [Key players] will accomplish this goal by [steps to achieve the goal]. Accomplishing this goal will [result or benefits].
SWOT: strengths, weaknesses, opportunities, and threats
A planning method for strategically assessing your product and its market fit. Strengths and weaknesses are usually internal (aspects or features of the product), while opportunities and threats are external (competitors, market, trends).
TAM: total addressable market
This is the entire market demand for a product. It’s often calculated in terms of revenue. Typically, companies focus on a specific target market, a subset of likely buyers from the TAM.
UI: user interface
UI includes the visual dimensions of a product. It’s what a user sees when they interact with your product. Menus, buttons, images, copy, and transitions are all part of a product’s UI.
USP: unique selling proposition
Why would someone buy your product over your competitors? Maybe price, maybe design, maybe feature set. Whatever it is, this is your USP.
UX: user experience
UX is how a user feels when they interact with your product. Do they see it as valuable? Are they able to get done what they came to do? Will they come back? UX informs the answers to these questions.
VoC: voice of the customer
VoC is a market research technique that captures customer requests and feedback—the customer’s voice–from multiple channels. This can help product teams prioritize needs based on request frequency and potential impact.
TFTI: thanks for tuning in
This one’s not in everyone’s vocab yet. But it’s our way of saying that we appreciate you stopping by.
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