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Metrics and Kpis, how to select the right ones to measure the success of your business

Key Performance Indicators (KPIs) Key Performance Indicators o Key product performance indicators) are metrics that offer an x-ray of the success of your business. They help us understand if products or services meet business objectives, and if marketing, communication and sales strategies are working correctly. But choosing the right KPIs can be complicated, so here are 10 tips to guide you in this task:

10 tips to help you measure the success of your business

1. Focus on User, Business and Product Objectives

Select KPIs that are in line with what you want to achieve. If it generates income directly, it is likely that income is a key indicator, for example.

2 Define Specific and Realistic Objectives

Knowing your goals is an essential step, but they must be clear and achievable to be useful.

3 Use Percentages and Deadlines

Define performance as a percentage of revenue and set realistic timelines for evaluating it.

4 Avoid “Vanity Metrics”

Vanity metrics are those that project a positive image, but do not add value. These metrics may seem attractive, but they don't offer a real view of the success of your business.

An example could be the number of downloads of an application. Many users may download it, but that doesn't say much about its success. A more appropriate metric would be the use of said application or the conversions it causes.

5 Don't Measure Everything Measurable

Select the metrics that really tell you about your business. Over-measuring can lead to wrong decisions. Better to choose the metrics yourself that will really inform you about the success of your business. 

6 Combine Quantitative and Qualitative KPIs

  • The quantitative indicators, such as daily active users or revenue, measure the number of events that occur. This is how “hard” and statistically representative data is collected.
  • The qualitative indicators, like user comments, help you understand why those events occur; for example, why users are not so satisfied with the product.

The combination of the two types of KPIs will give you very valuable information about the success of your business.

7 Use Indicators of the Past and Future

Past indicators, such as revenue and costs, tell you about the results of past actions. Forward-looking indicators help you understand the likelihood that your product or service will achieve its goals in the future.

8 Broaden your Look beyond the Financial

Financial metrics, such as revenue, and customer metrics, including engagement and referral rate, are the two most common types of metrics in most businesses. While these metrics are certainly important, they are not enough.

But if you don't take into account that your team's motivation is low or that the quality of the code is deteriorating (in the case of a digital product), you will be ignoring what these indicators indicate: that the success of your business will be compromised in the future.

9 Observe the Trends

Comparing data helps you better understand what is happening and take appropriate action.

This helps you spot trends, allowing you to better understand what is happening and take appropriate action.

10 Surround yourself with experts

In a field as complex as this, expert help can be invaluable.

At Immoral, we are happy to help you monitor the success of your business. Do you want to know more? ¡Contact Us!

This process of measuring and analyzing is not just a technical task, but an exciting and humanizing adventure that connects you with the essence of your business. Taking the time to understand and apply these tips will not only optimize your business, but will also bring you closer to your customers in a deeper and more meaningful way.

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