Four Steps Toward Actionable Metrics

Melaney Smith

Updated · Jun 19, 2003

The interviews and preparation I did for my recent series on metrics gave me a lot of food for thought. I think it's clear by now there's no magic set of metrics that works for everyone. Similarities can exist between businesses with similar goals or individuals with similar roles. But the question, What should I measure for my Web-based business?, has no stock answer. You have to figure out for yourself which metrics will most assist you with what you're trying to accomplish.

This naturally leads to the question: How do I figure it out myself? I answered this in great detail in a series on yield models. Short answer: Start with an understanding of what your company wants to accomplish. Identify your role in the overall company goals. Finally, identify the critical steps that will lead to success, then choose metrics to measure those items or actions.

But other themes emerged in the interviews. Themes related to choosing metrics but requiring a little reading between the lines.

Know Your Goals and What It Takes to Achieve Them

An obvious goal for any business is profit. Because revenue is necessary for profit, we often focus first on revenue. What does it take to generate revenue, and which steps in the process fall into your realm of responsibility? In the case study, the company pinpointed a single metric as a precursor to sustainable revenue. All I spoke with are focused on that metric, albeit from different angles.

Know Your Role

Knowing your role is not to be confused with knowing your title. Where do you fit in the overall process of achieving the company's primary goals? The people I spoke with for the series clearly understand where they fit and chose metrics that apply to their own specific success criteria. Understanding the part you play, and how it relates to the parts others play, will help pinpoint the most important metrics to study.


The two points above center on understanding the steps that lead to success and where you fit in that process. A natural extension of this is communication throughout the organization to ensure all parties are in synch.

Communication was a behind-the-scenes theme of this series. Interviewees primarily addressed metrics and what they use them for. Reading between the lines, there's a lot of communication involved because there's so much focus on improving results. Often, we find a change in results in our own realm of responsibility is caused by (or affects) changes in someone else's arena. Your success may depend on your ability to get other people to improve their own metrics.

Be Prepared to Act

In none of my interviews did I encounter people who use metrics merely as a report card. The goal of metrics is action. Our case studies show complete agreement on this point. The people I spoke with know what to do next in any number of scenarios. A spike in revenue? They know where to look to determine the cause and to capitalize on it. Unexpected decrease in sales? They know what to do to pinpoint the areas that need addressing. The key is choosing metrics that lead to action, not simply knowledge. You must act quickly to take advantage of opportunities for improvement. That's the whole reason to look at reports in the first place. Metrics are a means to an end.

Plan Ahead

We heard from one project manager who reminded us how much easier it is to obtain necessary data if you plan for it during the development phase. Whether launching a new product or redesigning your site, stop and recalculate the steps to success and the metrics you'll need to monitor those steps. Then, include the metrics in the development plans.

A note to those of you playing catch-up in the data game or trying to obtain data or software to evaluate jobs you're already performing: Show a business justification for the resources you need. I've played the catch-up game many times. It's always hard. I've been most successful when I can demonstrate the benefit to the business in financial terms.

Say you're an e-mail marketer trying to justify purchase of reporting software. You might present scenarios illustrating how different CTRs impact revenue and follow up with case studies focused on the effectiveness of the “test and measure” method for optimizing e-mail campaigns. By showing not only your own plans for the data but also estimates of the financial benefit, you stand a better chance of getting the resources you need. Don't be afraid to use hypothetical data (clearly labeled as such, of course). The fact it's hypothetical only serves to clearly illustrates you lack the data you need.

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