4 rules of thumb that make a good metric

A good metric is a number that will drive the change you’re looking for.

1 ) A good metric is comparative : Being able to compare a metric to other time periods, groups of users, or competitors helps you understand which ways things are moving.

Example: “Decreased churn rate from last week” is more meaningful than “2% churn”.

2 ) A good metric is understandable : If people can’t remember it and discuss it, it’s much harder to turn a change in the data into a change in the culture, products or services.

3 ) A good metric is a ratio or rate : Accountants and financial analysts have several rations they look at to understand, at a glance, the fundamental health of a company.

Ratio rate metrics are easier to act on and inherently comparative.

Example : A distance per hour : is something that you can act on, because it tells you about your current speed, and whether you need to go faster or slower to get to your destination in time.

4 ) A good metric changes the way you behave : This is by far the most important criterion for a metric : What will you do differently based on changes on metrics?

Example : “Experimental” metrics, like the results of a test, help you optimize the product, pricing, or market. Changes on these metrics will significantly change your behavior.

A good metric changes the way you behave toward reaching your goals and destinations.