Metrics are critical tools for evaluating business performance and efficiency. By tracking metrics that matter to your business, you can make important decisions about where to invest time and resources. The challenge is knowing which metrics to pay attention to. This article unpacks some business metrics through a case study and interactive demo Power BI dashboard that can be explored. We look at what they are, choosing the right ones, implementing them and making them more meaningful.

What are Business Metrics?

Business metrics are used to track, monitor and analyze quantified measures that assess the business process’s success or failure. There are hundreds of metrics. Some are broadly applicable like Sales Value, some are very focused on a specific company type, industry or process.

Within an organization, departments including common ones such as operations, finance and sales have their own, sometimes very specialized, metrics that matter. It is reccommended that metrics are reassed periodically to determine whether they are still relevant and useful to achieve the business strategy.

Choosing the Right Metrics

Processes are the heart and soul of every business and the means of creating value for your customers. When we look at business processes, we are always asking ourselves how we can improve them, make them faster, more accurate or less expensive. This is where data analytics starts adding value, when you can measure these levers that drives improvement. Identifying the most important processes is where you start identifying your most important metrics.

In the interactive Power BI Demo we explore some key metrics amongst some key business processes, these include Marketing, Sales, eCommerce Sales, Customer Retention, Production, Delivery and Fulfillment. It is important to note that the list of processes and metrics are by no means exaustive and complete, they are used to unpack the topic. Below is a summary of the metrics we have looked at. Are you currently measuring some of these?

Key Marketing Metrics:

• Sales Won
• Repeat Customer Spend
• Conversion %
• Open Lead Value
• Page Views and Unique Page Views
• Bounce Rate
• Avg Time Spent on Page

Key Sales Metrics:

• Total Sales
• Sales Order Quantity
• Completed Sales Orders
• Revenue per Customers
• Amount of Customers

Key eCommerce Sales Metrics:

• Online Revenue
• Online Transactions

Key Customer Retention Metrics:

• Repeat Customer Spend
• Repeat Purchase Ratio
• Churn Rate
• Once Off Customer Spend as % of Total Customer Spend

Key Production Metrics:

• Production Quantity
• Completed %
• Quantity to Go
• Avg Time per unit
• Production Cost
• Labour Value
• Time Spent

Key Delivery & Fulfillment Metrics:

• Deliveries Completed
• Total Delivery Hours
• Deliveries to Go
• % OTIF
• Inventory to Sales Ratio
  
  

Contact us today at hello@datalab.co.za to help you to create metrics.

Implementing Business Metrics

Deciding on the right metrics only solves half the problem. Tracking and presenting them intuitively to drive performance improvement is the second part of the challenge. Business metrics comes to life through effective presentation on dashboards and reports. Here are some guidelines to build dashboards that users will love.

When building and designing dashboards, the user and their goals needs to come first. See if you can identify the different persona's and audiences in the Power BI Demo. Some are aimed at Sales Teams, some at Management and some at the Production floor.

Decide on the dashboard category before you start. Is it an Operational dashboard helping the users understand what is happening now? Is it an Analytical dashboard helping users analyze trends over longer time periods to inform srategic decision making? Is it a Strategic dashboard helping executives to quickly understand the subject without having to dive into details.

Always stick to fundamental design principles. Make sure colour is for grabbing the users attention or helping to easily categorise things as good or bad and make sure colour is used consistently. Do not ever add any unneccessary elements that do not convey useful information. Use calculated proportions and relative sizing. Use information hierarchies and bookmarks to ensure users can navigate easily into detailed analysis and back. Keep layout consistent to help users be more productive. Provide context to avoid users needing to make assumptions or guess, use headings and information pop-ups to facilitate understanding. Make sure you prioritise performance, users are impatient and will lose interst or thought process within 5 seconds.

Making Metrics Meaningful

Let's unpack some of the techniques available to make metrics more meaningful, insightful and actionable. A metric can only be interpreted as good or bad when it can be compared to something. We reccommend two types of comparisons techniques:

• Application of various comparitive periods through time intelligence metrics
• Setting data driven or business driven targets

Targets are sets of metrics which must be accomplished within a set time. When you define your targets, and the metrics you’ll use to measure your success, make sure that these targets will have a meaningful, positive and obvious impact on your business. This will enable users to quickly understand where to apply their efforts of improvement.

Comparison against different periods through time-intelligence functions is another mechanism to identify if a metrics has improved or not. These comparison metrics include metrics variations like:

• Month on Month Growth (MoM)
• Year on Year Growth (YoY)
• Week on Week (WoW)
• Same Period Last Year (Day, Month, Week, Year, Etc.)
• Custom Comparison Periods (Specific Dates to Compare)
• Etc. etc.

Bottom Line