5 Consequences of misunderstanding business metrics and how to fix them!
As a business owner, you already know that building a robust business plan certainly isn’t enough anymore. Your work doesn’t end with hiring competent employees and strategists for your company. Business metrics are essential for a start-up as it helps you to understand the success rate of the strategies and plans and analyzes if they are working towards achieving the targeted ROI or not.
Although metrics work as the navigator and drop hints as to when you should consider making alterations in your business strategy, banking too much on them can have an adverse effect on your startup.
Here are 5 notions that most entrepreneurs have when it comes to business metrics. As a bonus, I have also come up with ways to fix the mistakes before it’s too late.
1. Page views and emails sum up to sales
Page views or search engine queries could be reporting 1,000,000 searches per month and yet the after effects on your ROI may amount to zilch. Page views can be misleading in the sense that you could have just one searcher who could have made the most searches.
2. Metrics show you the whole picture
Most marketers understand that certain metrics and KPIs cannot throw light on the entire picture of how your company is performing. Therefore, it would be an amateur move to get your hopes up or make quick alterations to your strategies based on conclusions that don’t tell the whole picture.
3. All things can be measured
Take this for an example – you can calculate the page views and the ROI of your company, but is it hard to calculate qualitative metrics like customer satisfaction and employee’s interaction. While Google Analytics can help you with most of the quantitative marketing KPIs and your cost department can give you an overview of the sales and expenses margins, none of the above can really give you a final number for the impact that your business efforts have on your users.
4. Metrics cannot be manipulated
Firstly, it isn’t a wise decision on an entrepreneur’s part to judge the work performance of the business costs and marketing plans using metrics alone. Moreover, applying the wrong metrics and arriving at rash conclusions based on them can also prove to be detrimental for your company’s performance.
5. Theoretical interpretationdepicts the actual figure
Being an entrepreneur, you might not always understand how to assess metrics and KPIs. So, you may think that hiring a cost specialist or a marketing analyst can help you overcome this obstacle. Since the specialists have been trained to analyse metrics closely, they can be the correct people to judge the KPIs and come to a conclusion about the performance of the business.