Useful metrics need to be two things.
- Understandable — everyone should be able to clearly explain them.
- Deterministic — when they go up (or maybe down) you should feel really confident that something good has happened.
Ironically, deciding if something is “understandable” and “deterministic” is subjective and debatable. I’ve found that it’s more effective to rephrase the idea like this.
Everyone should know when to cheer.
Last year I saw a blog post called One Content Metric to Rule Them All. As I read the post, it got increasingly complicated — weights, means, expectations, and logarithms.
This fails both tests; it’s hard to understand, and it’s not deterministic.
Imagine trying to explain to someone that this metric increased from last week. I’d expect them to start poking holes in it. Did the values go up or did the expectations go down? Which groups improved and what were their weights? Etc, etc.
A good metric — one that everyone knows when to cheer for — helps everyone in the organization unite around it. They can understand the impact of their work and see what it’s contributing to. Maybe more importantly, they can also understand the impact of other teams’ work because it’s driving toward the same goals.
The specifics of what you should measure depend on what you’re trying to do, what creates the most value for your customers, and what your bottlenecks are. Simple metrics are usually better than complicated ones, although as Albert Einstein famously said, “Everything should be made as simple as possible, but no simpler.”
Here are a few examples that often work well as cheer metrics.
- Signups — this one is very simple, but in some cases it can fall victim to confusing data like spam, backfills, and poor retention.
- Engaged users — Further down the funnel from signups. Obviously you’ll need to define what being engaged really means for you.
- Revenue — An obvious one for direct commerce businesses. Also, the best-day-ever milestones for revenue are particularly good for cheering.
- 1-day/7-day retained users — These are very popular in gaming and other products with very high attrition.
- Total time reading — We wrote a lot about this one at Medium.
- New hires — One of the primary goals of any growing team.
It’s probably easy to imagine any of these going on a TV in your office and everyone feeling like their work can contribute to moving the numbers up. If you can actually get everyone to cheer that’s pretty fun, too.
Run Hop is building analytics tools for products focused on engaged users. For more information and early beta access, visit us at runhop.com.