Using actionable metrics to grow your e-commerce

Unlike vanity metrics, an actionable metric tells you what needs to be done so you can attain your goals. Actionable metrics provide a scientific way of determining what exactly to change to get a better result.

One of the best examples of this would be the results of an AB test. In an AB test, you use a specific variable to compare how two different alternatives improve your results. Let us say you have a landing page and are not sure what call to action to use on the button under the product. You could settle on two alternatives, Buy Now, or Buy here. The variable here is the call to action. You can use a metric such as clicks on the button for either alternative. You can decide instead to measure actual sales from each.

The click-through rate is an actionable metric because from measuring it, you can decide which Call to Action works best.

You don’t necessarily have to be comparing two alternatives but these metrics must be relevant to your goals. You can never go wrong with measuring changes in sales or conversion rate because ultimately, sales are why your business exists. Return on Investment, Churn, customer value are examples of other actionable metrics. You can also measure steps in the customer purchase process from the time customers are aware of you to the time they make a purchase.

There are a number of things that make it easy to spot actionable metrics:

  1. Focus on the ‘macro’ metrics. Ideally, your metrics should move you closer to business goals. These goals should be directly related to your business. Let us say you are measuring button clicks. If more customers click on one button more than the other but no one actually buys anything, then the experiment is a waste. A good Macro metric would be sales.
  2. Create simple reports. Fancy multicoloured graphs, spreadsheet and presentations are overrated. Keep reports simple enough that any user can look at it once and see what is needed. There are a number of useful ways to do this. Funnel reports summarize data according to your customer lifecycle. Any drop-offs are immediately apparent. Cohort analysis will help you compare different groups of users over the long term. AB test results are great for showing effects of short-term changes to specific variables
  3. Talk to people. Ultimately, metrics only get you are far as the actions of your consumers. Their motivations and reasoning are something else entirely. Actionable metrics should preferably be traceable to the people who generated them. If your funnel report shows that 100 out of 300 people signed up but did not make a purchase, you should be able to generate a list and get in touch. This is especially important for startups when qualitative information is important in improving the product.

There is a learning curve to this but it is absolutely necessary for getting value from your data. Once you get started, you will also get a better idea of what tools to use to get the right information from your data. Don’t get caught in the vanity metrics trap this 2019.

Article by

Glenn Ogolah.