When identifying Key Performance Indicators, selecting appropriate success measures is essential. Most of the work I do occurs in web-based environments, where the fundamental operating principles are consistent. But the approach generalises well beyond the web.
The Purpose of Analytics
Analytics exists to accomplish two primary objectives:
- Identify the wins, celebrate them, and find the rules which produce more wins
- Identify the failures, and figure out ways to fix them
This enables teams to scale what works and eliminate what doesn’t. Simple in theory. Consistently ignored in practice.
Measures of Success
Success metrics clarify victories and help teams understand what worked previously. A good measure of success is task completion rate, conversion rate, or profitability. These metrics should be shared widely to align organisational purpose — everyone should know what winning looks like.
Measures of Failure
Failure metrics identify problems and reveal improvement opportunities. Bounce rate is a classic example. Unlike success measures, failure metrics work better when communicated to specific, localised teams rather than broadcast broadly. Broadcasting failure metrics organisation-wide tends to produce defensiveness rather than improvement.
Keep the success metrics public and the failure metrics targeted. You will get better action on both.