The importance of Actionable Metrics

Starting a growth team certainly has its challenges, and one of the biggest ones that I’ve run into is picking the right metrics to focus on. It’s far too easy to pick feel-good, vanity metrics that don’t help you determine whether your various experiments and efforts are affecting the bottom line.

One of the main things that a growth team has to do is learn. A growth team is basically a start-up inside of a start-up, trying to learn how to dramatically improve acquisition, activation, retention, and revenue.

It’s far too easy to get stuck in the loop of just building stuff, without having a clear objective on what you’re trying to learn. It is, however, vital to be crystal clear about this to be able to easily observe what impact you’re causing to be able to shift gears based on the results.

When you’re optimizing towards learning, the right metrics and analytics play a key role. When you’re focused on feel-good, vanity metrics you have no way of knowing which experiments and ideas are having a meaningful impact on the bottom line. Vanity metrics such as button clicks and page views don’t tell you anything about the overall impact.

This is where actionable metrics come in. Actionable metrics should be simple, easily understandable by the team, and last but not least - actionable! They should capture meaningful change in customer behavior, resulting in an overall improvement in acquisition, activation, retention, or revenue.

Typical actionable metrics in a product-led company are sign-ups, activation, and paid subscription conversions. Optimally you should analyze your actionable metrics using cohorts (e.g. sign-up week), to be able to easily compare your efforts week-over-week.

By using actionable metrics, the team has a simple way of understanding the impact of their efforts, which results in better decision-making progress when it comes to determining what works and what doesn’t.