One of the concepts we’re pushing hard in the Lean Analytics book is the One Metric That Matters (OMTM). The idea is this: at any given time in your business there’s one key metric you should be focusing on. Here are some elements of the One Metric That Matters to keep in mind:
- It will change over time.
- It answers the most important question you have.
- It has a clear goal.
- It focuses the entire company.
- It inspires a culture of experimentation.
(1) When picking a key metric, think through the incentive effects. By optimizing for this metric, what will we do? What will we not do?
(2) We made Seeking Alpha’s one metric that matters daily direct uniques. We thought through the incentive effects to ensure they were aligned with our long term goals. The result: we eliminated our reliance on traffic partners, raised quality, and strengthened our brand.
(3) Had we chosen a metric like page views, monthly uniques or social shares, we’d have been incentivized to do bad things, with serious consequences.