One Metric That Matters
Visualising data is getting easier, with tools like qlik.com, powerbi.com, geckoboard.com, octoboard.com, mixpanel.com, kissmetricshq.com, totango.com, chartbeat.com, and others.
While the data you collect may be helpful, you first need to reduce the noise.
Why just One Metric
Simplicity: Though it’s a single metric it might be a complex metric. In fact, the best metric may end up being a composite metric. But the key is that it’s a single simple point of focus for you and the team.
Focus: With only one metric you can focus solely on driving that number.
Experimentation: The team might not be clear how they can drive this metric. There may be a variety of ideas, but not all of them will work. The use of the one metric that matters approach grounds all conversations and ideas around what will move the needle for this one metric. It will require innovation, collaboration and experimentation.
Flexibility: What’s the most important metric in the business right now — the one to measure, the thing that’s most broken. Find the single metric that’s most important for the stage of your company’s development — then be ready to change it.
Perhaps you’ve optimised the number of enrolments in your gym — but now you need to focus on cost per customer so you turn a profit.
Maybe you’ve increased traffic to your website — but now you need to maximize conversion.
Perhaps you have the foot traffic in your coffee shop you’ve always wanted — but now you need to get people to buy more than just one coffee while using your wifi for hours.
Identifying a good metric
A rate or ratio is better than an absolute or cumulative value. For example, “New users per day” is better than “Total users.” Absolute numbers tend to be vanity metrics.
Is it comparative to other time periods, sites, or segments? “Increased conversion from last week” is better than “2% conversion.”
It should be no more complicated than a golf handicap. A good metric has to be incredibly simple and easy to understand; otherwise, people won’t remember it and discuss it.
For “accounting” metrics that report on the state of the business (to the board, investors, bank, etc.), your metric needs to be reflected in the bottom line.
Make sure that your One Metric that Matters directly assesses how your business is doing against the purpose of the business.
The more specific the better. It’s important to stay away from aggregated totals, so your OMTM is not sales. Your OMTM may be sales per week for high volume customers. In this example you have now chosen a customer segment, a date range and together those make your metric specific and targeted, which in turn makes the next actions obvious.
I’ve had some fun over the holidays, building visualisations with domo.com, using six months worth of client data. The trick now is to see if they can identify the One Metric which will focus the team around a common and measurable goal.