Do you know how well your business is performing? Do you have a clear idea of what you need to do to achieve your goals? If you answered yes to these questions, congratulations! You are probably using actionable and effective metrics to measure and improve your business processes. But if you answered no, or you are not sure, don’t worry. You are not alone. Many businesses struggle with choosing, measuring and using the right metrics to drive their growth and customer satisfaction.
Metrics are the numbers that tell you how your business is doing. They can help you track your progress, identify problems, test solutions and optimise your strategies. But not all metrics are created equal. Some metrics are actionable and effective, meaning that they are relevant, accurate and correlated to your business goals. They can help you make informed decisions and take meaningful actions to improve your performance. Other metrics are vanity metrics, meaning that they are superficial, misleading and irrelevant to your business goals. They can make you feel good about yourself, but they don’t help you improve your performance.
In this blog, we will reveal the secret to actionable and effective metrics. We will show you how to choose the right metrics for your business goals, how to measure them accurately and consistently, and how to use them to drive your growth and customer satisfaction. By the end of this blog, you will have a better understanding of what metrics matter for your business and how to use them effectively.
How to Choose Actionable and Effective Metrics
Choosing the right metrics for your business goals is the first and most crucial step to creating actionable and effective metrics. But how do you know which metrics to choose? Here are some tips to help you…
First up, start with your business goals and work backwards to identify the key performance indicators (KPIs) that align with them. For example, if your goal is to increase customer retention, you might choose metrics such as customer satisfaction, churn rate, loyalty program participation, etc.
Next, use the SMART criteria (Specific, Measurable, Achievable, Relevant, Time-bound) to define your metrics. For example, instead of saying “increase customer satisfaction”, you might say “increase customer satisfaction score by 10% in the next quarter”.
Then you want to avoid the local optimisation trap by ensuring that your metrics are aligned across teams and departments. For example, if your marketing team is focused on increasing website traffic, but your sales team is focused on increasing conversions, you might end up with a lot of visitors who don’t buy anything. You need to make sure that your metrics are consistent and complementary across the organisation.
Finally, employ both quantitative and qualitative data to capture the full picture of your performance. For example, quantitative data such as revenue and engagement can tell you what is happening, but qualitative data such as online conversations and customer feedback surveys can tell you why it is happening. You need both types of data to understand the root causes and drivers of your performance.
How to Measure Actionable and Effective Metrics
Once you have chosen the right metrics for your business goals, you need to measure them accurately and consistently. Measuring metrics is not just about collecting data, but also about analysing and presenting it in a clear and engaging way.
So how can you measure your metrics effectively? Use reliable and consistent data sources and tools to collect and analyse your metrics. You need to make sure that your data is valid, complete and up to date. You also need to use tools that can handle the volume and variety of your data and provide you with the insights you need. For example, you might use Postman to visualise API responses and conduct API reporting.
Establish baselines and benchmarks to compare your current performance with your past performance and industry standards. You need to know where you are starting from and where you want to go. You also need to know how you are doing compared to your competitors and best practices. For example, you might use a list of best travel insurance companies published by a popular news outlet as a benchmark for your own travel insurance business.
Use visualisations and dashboards to present your metrics in a clear and engaging way. You need to make sure that your metrics are easy to understand and communicate to your stakeholders and employees. You also need to make sure that your metrics are visually appealing and interactive. For example, you might use the Pulse dashboard to create effective metrics dashboards.
Finally, regularly audit your metrics to ensure that they are still relevant, accurate and correlated. You need to make sure that your metrics are not outdated, inaccurate or irrelevant to your business goals. You also need to make sure that your metrics are still correlated to your outcomes and actions. For example, you might use tips on how to measure leadership effectiveness as a guide for auditing your own leadership metrics.
How to Use Actionable and Effective Metrics
Measuring your metrics is not enough. You also need to use them to drive your growth and customer satisfaction. Using your metrics means communicating them, acting on them and learning from them. Here are some tips to help you use your metrics effectively:
- Communicate your metrics to your stakeholders and employees in a transparent and timely manner. You need to make sure that everyone knows what your metrics are, why they matter and how they are performing. You also need to make sure that everyone gets the latest and most relevant information. For example, you might use Martin Fowler’s guidelines for a more appropriate use of metrics as a reference for communicating your metrics.
- Act on your metrics to identify strengths, weaknesses, opportunities and threats in your business processes. You need to make sure that you use your metrics to make informed decisions and take meaningful actions to improve your performance. You also need to make sure that you prioritise and align your actions with your business goals. For example, you might use Forbes’ tips for getting accurate and actionable insights from company metrics as a guide for acting on your metrics.
- Learn from your metrics to test hypotheses, experiment with new ideas and optimise your strategies. You need to make sure that you use your metrics to learn from your successes and failures, validate your assumptions and discover new insights. You also need to make sure that you adapt and iterate based on your learnings. For example, you might use the Pulse blog, or even the newly launched Fintech CEO blog to gather insights about the latest trends in fintech and as a source of inspiration for learning from your metrics.
Actionable and effective metrics are the key to success in today’s data-driven world. They can help you track your progress, identify problems, test solutions and optimise your strategies. They can also help you communicate your performance, celebrate your successes and motivate your improvements.
Here at Pulse, we help you make sense of your metrics and turn them into actionable insights. With our AI-powered dynamic dashboard, you can access advanced data analytics for any business with Open Banking and Open Accounting enabled. Once set up, you can use our financial trend analysis to start making smarter business decisions right from the get-go!
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