QTMA co-chair Nick Chan shares insights on how companies – especially startups – can implement reporting to make better decisions. Additional resources and data-tracking services are also linked (bottom of the page).
- Dashboard: “Progress report” of key performance indicators and metrics that are relevant to a company’s business objectives
- Dashboarding allows individuals/companies to gain insights to make better decisions
- Dashboarding is most relevant to startups and tech companies, but are useful across all companies
Properly Implementing Analytics and Metrics
- Metrics are more qualitative than you would initially expect; qualitative factors must be considered before you start reporting
- People often have different definitions for words (ex. different definitions as to what a “user” is)
- Clearly define all metrics to make sure that your team is “aligned” (all team members fully understand the business objective)
- Great practice for alignment: sit down with everyone who is invested in the business outcome and define metrics as clearly as possible
- In startups on the sales/marketing/revenue side, it’s crucial to define what constitutes a “lead”, “deal”, and opportunity
Core Principles of Dashboarding
- Speak and show the truth, not what people want to see. Be transparent and use objective data. This will allow you to more accurately understand how you can improve your company.
- Determine why you’re tracking the metrics you chose. What insights/value will this metric bring and how will it help you make better decisions surrounding your company?
- Communicate how your metrics are calculated. Allows others to understand how the numbers were derived.
- Ensure that your team is aligned in terms of understanding what and how metrics are tracked.
- Verify that you are tracking actionable metrics, not vanity metrics (difference explained below).
- Vanity metrics: Numbers that make you feel good but don’t offer value or guidance in terms of improving your company
- Vanity metrics are often misleading
Examples of Vanity Metrics
- Totals: Totals will always ever go up, making some companies seem better than they actually are. If the goal is to grow your company, rate of change is more important than determining totals.
- App installs/users: Doesn’t capture customer engagement, product use, or rate of acquisition. Doesn’t show how many customers actually enjoy your product.
- Content view: Doesn’t measure the quality of the content, the number of misclicks, bots, or crawlers.
- Newsletter signup/Email subscribers: Doesn’t measure customers’ actual usage of your product. Frequently, only 0.1% of these individuals actually convert and become customers.
- Actionable metrics: Useful numbers that allow you to make better decisions on specific business objectives
- When tracking metrics, make sure to ask yourself the purpose of the metric and how it is helpful
- Metrics often become more useful/actionable when they’re combined
- Look at context! All companies are different and will benefit from different metrics
Examples of Actionable Metrics
- Rate of user acquisition: Captures whether your actions are affecting the rate you are acquiring users. Also gives you feedback on if your new initiatives are making an impact on growth.
- Retention / Cohort Analysis: Captures churn (how many customers stop using a product) and how good your product is at maintaining customers
- Golden standard for startups and tech companies
- Important metric because user acquisition is expensive. If you have a lot of churning users, you will constantly have to burn money to acquire new customers
- Acquiring a new customer can cost 5x more than retaining an existing customer
- Ask yourself, “of the group of users that joined this week, what % of people are still using my product 1 week out? 2 weeks out? 3 weeks out?”
- Time Spent in App: Measures how much someone is actually using your app.
- Scroll Depth: Determines if people are actually reading your article and engaging with your content. Frequently used for blog articles.
- Bounce Rate: Measures the number of users who enter a website and exit without visiting any other page on the website. Determines if other pages on your site are interesting to users.
Distinguish Between a Symptom and a Root Problem
- Some metrics are lagging indicators; they only show symptoms of a root problem a while after you start tracking
- Ex. High churn rate is a symptom
- Potential root problems of churn include: selling to the wrong customer, customers' expectations aren't met, poor customer service, inaccurate pricing, competitors are better
- Make sure you’re addressing the root problem of an issue, not just its symptoms
Opportunity Cost of Tracking
- Sometimes it's more beneficial to not track data because the time taken to set up the tracking costs more than knowing that piece of information
- Ask yourself how detailed you want your data and if tracking additional data would be beneficial
Questions to Consider when Dashboarding
- What are you featuring?
- Do you have consistent fonts and colours?
- What’s the story you want to convey?
- How are you filtering the data?
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