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Choosing the Right Data Points
Analytics isn’t about reporting for the sake of reporting; it’s about tracking progress. And not just aimless progress, but progress towards something you’re trying to accomplish. If you don’t know where you’re going, metrics aren’t going to be particularly helpful.
With that definition in mind, here’s how we define a “good metric” at Sherpa.
A good metric is:
- Comparative
- Understandable
- A ratio or rate
- Behavior changing
A good metric is comparative. Being able to compare a metric across time periods, groups of users, or competitors helps you understand which way things are moving. For example, “Increased conversion by 10% from last week” is more meaningful than “We’re at 2% conversion.” Using comparative metrics speaks clearly to our definition of “movement towards business goals”.
A good metric is understandable. Take the numbers you’re tracking now - the ones you think are the most important - and show those to outsiders. If they don’t instantly understand your business and what you’re trying to do, then the numbers you’re tracking are probably too complex. And internally, if people can’t remember the numbers you’re focused on and discuss them effectively, it becomes much harder to turn a change in the data into a change in culture.
A good metric is a ratio or a rate. Ratios and rates are inherently comparative. For example, if you compare a daily metric to the same metric over a month, you’ll see whether you’re looking at a sudden spike or a long-term trend. Ratios and rates (unlike absolute numbers) give you a more realistic “health check” for your business and as a result, they’re easier to act on.
A good metric changes the way you behave. This is by far the most important criterion for a metric: what will you do differently based on changes in the number? If you don’t know, it’s a meaningless metric. This doesn’t mean you don’t track it - we generally suggest that you track everything but only focus on one thing at a time because you never know when a metric you’re tracking becomes useful.
We can help you with your measurement and analytics strategy contact us here to learn more.
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