In recent weeks we have talked in depth about Vanity Metrics – those metrics which are usually (and unfortunately) used as KPIs for business but are not an adequate reflection of it. In many cases, you end up with a business that doesn’t work properly even though it seems that its KPIs are fantastic. The problem, as we saw, was that even though these metrics are commonly used, they are not aligned with business objectives and, even worse, however well or badly they go, they cannot help you to make a decision to improve things.
The metrics and KPIs which you should focus on are what are known as Actionable Metrics – those metrics which are aligned with your business objectives and can help you to make decisions. They include such metrics as conversion, CAC (Customer Acquisition Cost), your customers’ Life Time Value, margins, sale sources, the average order value, etc.
Over the next few weeks we will focus on each of these metrics, taking a look at the Vanity Metric which it replaces, and examining its impact on business. We hope that you will understand the importance of choosing adequate metrics as KPIs for your businesses, which won’t always be the same ones and will depend both on what type your business is and on its maturity.
To summarize, actionable metrics should enable you to:
– Measure what really matters, not only what boosts your ego.
– Take into account those who really matter, and thus enable you to segment by buyer type and make decisions to connect more and better with your customers.
– Have an overall view, as precise as possible, of the evolution of your business.