Actionable Metrics – The True Measure of Success
Usually, when we measure success, we think of numbers, charts, graphs and other visualizations. This can be seen in vanity metrics.
Vanity metrics only serve the current state of the product as it only shows number of viewers, downloads, members, etc. This might make you feel good (if you get to reach your quota), but this is disconnected from the growth of your organization or startup. Vanity metrics may indicate improvement but does not help you in dealing with more pressing matters. It can also be unreliable especially if it is via number of downloads or viewers. Context always matter in vanity metrics to be able to use them to your advantage.
In this so called measure of progress, vanity metrics only let you get to see the result, the numbers, not how you were able to succeed or meet certain goals. This does not help you on how to get about the next step and evaluate your product.
In lean startups, having more than vanity metric, rather a smart metric is important. This is where actionable metric comes to play.
Actionable metric helps in figuring out what went wrong or right, gearing you towards your goal. It uses scientific method to pinpoint what to change and will lead to a better outcome.
In getting to more actionable metrics, here are some tips:
1 – Focusing on the key metrics
Key metrics matter and create macro metrics. These key metrics are:
- How do users find you?
- Considering your channels/mediums to deliver your product is important and must be do-able
- Building a product that people would really want and buy
- Providing a great first experience from the product can help in having committed customers
- Typically starts with the sign-up process and end with you being able to define your unique selling point
- In startups, a product should give solutions to the market’s problem for it become sustainable
- A product is considered sustainable when customers still want your product, making them come back
- How you make money
- You may start charging from day one depending on how great you pitch in or sell your product, helping you increase your capital
- To get more customers to try and buy your product, get referrals from your established customers
- Snowball effect. Referrals go on and on.
2 – Simplicity is beauty
- Create simple reports for them to be easily understood and used.
- Having a one-page report makes it more possible for the report be turned in to action.
- Reports can be simplified by using different kinds of reports:
- Funnel Reports
- Can summarize key metrics
- Simple and visual
- Great visualization tool
- Funnel reports don’t provide a way to track retention and long lifecycle events
- Funnel Reports
- Cohort Analysis
- Work well for macro-pivot experiments
- Any property attributed to a user that the startup wishes to track
- Great alerting tool for picking up on actions that may have positive or negative impact
- Highlights significant changes in metrics with respect to specific activities done
- Can be used proactively
- Can track key activity over time in retention reports
3 – Metrics and the people
- Metrics can’t tell you why consumers did what they did.
- To attain actionable metrics, tie them with people. This way you can easily identify the active users and know where to troubleshoot when things go wrong
- In identifying metrics with people, you are able to rely more on qualitative validation, especially when you don’t have a lot of users before launching a product
These ways and reports can easily help in tracking your startups, leading to a growth and sustainability.