Get your metrics right

Good metrics keep everyone on track. They take the guesswork out of managing the business. You need to know where you are and where you are going. 

• What are your key business metrics?
• Can you forecast your future revenue using these metrics?
• How many people in your company are familiar with these numbers?
• Do your metrics answer your business questions?

For instance in a SaaS business there are standard numbers you need to be watching: CAC; LTV; and MRR, but depending on your business model, there may be more critical signals you need to look for every day. These can be layered onto longer term metrics to give short term projections and future forecasts. 
 

Avoid the Vanity Metrics Trap

Vanity metrics are the ones that go up every day, but don’t line up with a real business impact. For instance, in a growing internet business it's easy to get distracted by traffic, but if you're not monetising effectively you are watching the wrong metric.

Metrics should constantly be challenged to ensure they’re giving you actionable insight and not just making everyone feel good about themselves.

Smart Segmentation

For years I worked as a data consultant with brand marketing teams and agencies. Segmentation was a real buzz term. But it rarely meant more than using a simple field in the database to categorise data. 

For really smart segmentation you need to group your customers by characteristics. How much they engage with your product or service is much more relevant than what country or sector they are in. Go deeper. Challenge your data to find out what the most relevant signals are for your business. Choosing the wrong categorisations can be very costly.

In WhatClinic, we used to group our revenue and customers by country and clinic type, which seemed to make sense. We ranked markets and prioritised them based on total revenue. But the business model was complex and individual customer monthly revenue was massively variable (from zero to tens of thousands of Euros). To facilitate better targeting, we designed our own segmentation model. This combined specific clinic characteristics with geographical indicators. Ultimately, this transformed our sales and marketing strategy.