Metric context matters
Metric context matters
How holding everything up to a revenue line gives you a clearer growth picture and takes the vanity out of vanity metrics
I was recently talking with a prospect, and they told me about something their CEO always harps them on.
“Toni, my CEO never wants to see a graph without a target line.”
Which I responded with “Perfect!”
What their CEO is doing in this case, is putting everything in perspective.
By judging every metric by something else, it gives you a lot of valuable context to how you’re actually doing.
“Our numbers are going up!”
Great, but is that good? Should it be going up a lot more? Did we actually think it would go down?
If you have a target line, then it immediately becomes clear.
You can show this graph to a 6-yo, and she will be able to tell you if you are doing a good job.
Context matters
So how can you create context around a metric?
You need to have an expectation of how this metric should be performing.
This expectation can be based on your past performance.
Or it can be based on you hiring a bunch of people and expecting that they should be increasing this number.
Expectations are the little brother of Targets.
Not everyone in your organization should carry a target.
But - frankly - everyone should have an expectation of what to achieve by when.
In our world, that means expectations for metrics and targets.
What about vanity metrics? Keep ‘em
Vanity metrics are something we’ve all been told to stay away from.
Awesome, you got 100 more social followers. Bravo. (btw, are you following me on Linkedin already?)
The big misconception about vanity metrics is that people think it’s about the metric itself that doesn't matter.
If you ask an aspiring Linkfluencer like myself, I think 100 more followers is great.
The part that makes this a “vanity” metric though is that it always goes up.
And if something goes up, you can add a green arrow to it.
Green Arrow = Celebration.
This number can basically only go up, so celebrating it is… vanity.
It’s really the same with Opportunities or even Revenue.
Are you adding more Opps every week? Yes? Great. Vanity Metric!
What you need to be checking is, are you adding more Opps this week than last?
The delta, the increase, the improvement matters. Not that the metric itself moved. Because it always will.
It all needs to lead back to Revenue
You could argue that everything that isn't hard cold cash is a vanity metric anyway.
I think your CFO and CEO would agree to that.
More revenue or fewer costs. That’s all that matters.
So what you wanna do is to speak their language even if you discuss a metric somewhere in the funnel: you wanna connect them to Revenue.
Gap in MQL product of 20%? Boss, Marketing is creating a $1.26M ARR issue in the funnel.
Suddenly, it’s not a metric anymore. Suddenly it’s the hard cold cash they are interested in.
And suddenly, urgency ramps up.
In short:
Add a target or expectation to everything in your funnel & assign ownership
Track the increase and the improvement
Link your metrics back to revenue
If this is interesting, feel free to request a demo on Growblocks.com; we are solving many of the issues above and more.