When identifying the Key Performance Indicators (KPI) of your business, it makes sense to choose the proper measures of success. I have written about choosing the proper measures of success in the past. Since most of the work that I do is in the realm of the web, the principles via which we operate and do reports are more or less the same.
The only thing that changes is the conversion … or the success metric. In other words, the reason for which the website is built, the purpose of that site. Hence, the measure of success approach works.
Designing for new paradigms
However, what would happen if the product being built is not meant for the web, or was not based on the same principles? How would we go about identifying metrics and actionable reports.
For that we would have to go to the very reason why we need analytics.
The Purpose of Analytics
If I were to define the reason why we use analytics in any product, it would be to –
- Identify the wins, celebrate them and try to find the rules which get us more wins
- Identify the failures, and figure out ways to fix those failures so that we can improve
This view helps us do two things primarily, one to find out and scale the good things, and the other to find out and weed out the bad things in our product.
To do this, we would need metrics (or KPIs) that would indicate a success or a failure.
Measures of Success
The measure of success metric help in identifying the clear wins and celebrating them within the team. These also help in figuring out what worked for you in the past and on how to re-create those wins. One definitive thing that needs to be done (and I have learnt this the hard way), is that wins or measures of success metrics need to shared in a broader audience to give a sense of purpose to the entire team on what they are working on.
A good measure of success is task completion rate, or conversion rate, or profitability.
Measures of Failure
The measure of failure metric help in identifying failures within a certain activity. These are also metrics which help in identifying opportunities of improvement. Measure of Failure metrics should help us root out problems within our current design/product. I say root out, because once you identify the failure, you have to act and ensure that the failure does not happen again.
An example of measure of failure could be bounce rate.
Unlike measures of success, measures of failure may not be shared with large teams. Rather I feel (and I am want your opinion on this), that they are much more effective when communicated to the right localized teams.