One thing that sets good founders and marketers apart from great ones is that they know what metrics matter, measure those metrics, and make decisions based on the data they are seeing. Unfortunately, with the sheer volume of platforms being used for advertising, marketing, sales, analytics, data & more, it’s often incredibly hard to know what is worth tracking and spending time on, and what’s not. A common mistake that I see founders make is that they search and search for a platform to help them with analytics, they spend time setting up the right events to track, and then they produce a bunch of half-baked reports that make them feel good (because we all love reports and metrics!), but rarely provide the critical insights needed to drive actual growth. These reports almost never tell the whole growth story either, and often they may use vanity metrics – those fun but unimportant-to-the-business metrics – in place of important metrics the company can learn from, and the output is a set of data that’s just not that relevant.
Some examples of this include things like:
- Site visits as a core metric
- Conversions without understanding which sources are creating signup or lead volume
- Tracking that “organic search” traffic is going up, but not understanding how to quantify the impact
- Seeing an increase in time on site or in app without correlating that to revenue or retention
- The list goes on and on and on!
Here’s where the problem lies – often initial reports are based on good data, but that data isn’t used to make accurate predictions or decisions about the company on because the metrics impacted by the data don’t truly matter to the growth of the startup.
For example, I’ve all too often seen a chart showing visits to signups by channel, without seeing the retention of those signups who purchase from a particular channel after 6 months. Tricky, right? Often, in our effort to build comprehensive reporting, we often miss the simple things that truly matter.
This is why for the past 10 years I’ve been relying on 2 things:
- Understanding what core & proxy metrics exist for the company that truly matter – some call these a “North star metric,” but I almost always see more than one metric as important
- Manually run reports that I can trust to help me guide my decisions.
For this post I’m not going to get into core and proxy metrics (we cover that in the Mastering Growth program). Instead, I’ll focus in on how to run manual reports that will get you results by helping to guide your decisions.
Before you roll your eyes and say “not another manual thing for me to do” let me explain.
This process doesn’t take a lot of time. It doesn’t mean you don’t use robust data platforms to track your core data. And it doesn’t mean you can’t automate most of the work that goes into reporting.
But I’d urge you to manually create the report that tracks your most important metrics, and to do so on a weekly basis. Here’s where building a simple growth dashboard comes in.
Building a simple growth dashboard
The most important consideration for building a simple manual growth dashboard is to understand what your main metrics are. Below is a framework I use with every company I work with to help suss out what’s important, and what you can ignore.
Considerations for a growth dashboard
There are some key questions you can ask yourself and your team to understand what you should be reporting on. This will differ company to company and industry to industry, but here are some primers to get you started:
- What key metrics matter to me and my business in terms of acquisition, activation, monetization, and retention? Choose one main metric from each area of focus.
- What are the leading and lagging indicators of success on a month to month basis? How do I know what metrics from above impact my future growth?
- What are metrics that happen frequently (i.e. daily) that I should be tracking knowing they’ll lead to lagging metric growth over time?
Common growth metrics
You first want to track the right metrics for your company across the main areas of focus. Here’s a starting point to pick and choose from:
Top of funnel paid acquisition
- Ad impressions – what’s happening at the very top of my audience building efforts?
- Clicks – what sources are driving clicks? What are those clicks doing once on my site or in my app? (see EPAG below)
- Click through rate (CTR) – what’s the % of people who see my ads or search results and end up clicking?
- Cost per click (CPC) – how much do I pay per click in each channel I’m spending marketing dollars in?
Top of funnel organic
- SEO impressions (using google webmaster tools to get data) – how many people are seeing
Below is a chart showing SEO impressions and clicks for a website. This is pulled from Google Webmaster Tools and the Search Console.
EPAG (end point acquisition goal) / Product
EPAG is essentially the handoff between acquisition and activation – what is it that you want the user to do at this step of the customer journey? This could be:
- Unique visitors
- App Downloads
- Email captures
- Free trials
- Demo requests
- Webinar sign-ups
Remember – revenue is a lagging metric (as is retention), so you’ll want to start to establish a way to spot trends for future revenue and retention. For example – I know if I can get 100 site visits to my webinar page, I’ll get 50 to sign up, and 10 will become customers. In this case, I’d track visits by source, sign ups (EPAG metric) and purchases from that cohort of users.
Common revenue metrics include:
- New subscribers
- New Revenue for transactional purchases
- Gross marketplace value (GMV) for marketplaces
Retention can be viewed from a few angles, but common retention metrics include:
- Total subs
- Churn rate – % subs who churn each month
- Repeat site visitors
- NPS – yes, you can use NPS as a proxy to retention, though I normally don’t
- Many more…this Hubspot article has some other ideas you can use
You next want to measure conversion rates. Conversions happen between key ares of focus. Common metrics for conversion that I’ll look at include:
- Unique visitor week over week growth (WoW as the abbreviation)
- % visit to action (i.e. trial, sign up, email capture)
- % visit to action by channel
- % action to purchase by channel
- % action to revenue (i.e. trial to subscribe or purchase)
- % revenue growth
Finally, you’ll want to roll in your costs:
- Customer acquisition cost (CAC) for paid
- Total spend
- Payback window (in months)
Once you have a good understanding of where to start with your metrics, you then want to plot them out in a growth dashboard. I’ve included a sample below that you can grab. From there, you can start to focus on some reporting best practices.
Getting into the reporting groove is critical. Choose an interval to report on (I use Monday through Sunday, others use Sunday through Saturday). Report the prior week’s metrics the day the new week starts, and stick to that window of time for reporting. For me, that means Monday AM updates for most of the startups I work with.
Look for trends and correlations
Learn to spot correlations & trends. For example, in the example I’ve shared you’ll see a Week 7 traffic spike from Twitter ads. Lower intent traffic from that led to lower % subscription the next week. This is completely normal, but you want to document this. This in turn impacted next week’s churn…and so on. Eventually you’ll become great at understanding why certain metrics are moving in good (or bad) directions.
What about reporting platforms?
I love products that help track and report on events (Mixpanel, Segment, Google Analytics to name a few). You absolutely should use any and all products that make sense to get you the data. But every week, I manually update my growth dashboard. I can’t stress this enough – doing this forces you to “own” the metrics. You have nowhere to hide when you’re running these updates on your own.
Building an example dashboard
Below is an example dashboard after a few weeks of tracking data. I was pretty pumped when Lenny Rachitsky recently chose my dashboard to feature in his article talking about SaaS growth metrics and tracking: https://www.lennyrachitsky.com/p/the-most-important-bottom-up-saas