Seven-steps to set goals and pick metrics for customers
When you want to improve value for your customers, it pays to plan clear goals and a data-driven approach to achieving them. The problem is that it’s a tricky process with hidden traps that can make you feel good even if you’re running your business off the road. In this article I’m sharing the seven steps I take teams and decision makers through to turn ideas into clear and measurable customer goals.
Motivation
We all want our businesses to provide value to customers, but how do we know we’re achieving it? Well, there are financial metrics related to profit and loss that you monitor to maintain operations. However, these rarely give you actionable customer insights.
To grow, your goal cannot be simply to increase profit. You need to think about how to improve the user experience, increase satisfaction, reduce confusion, or increase loyalty. When done right, setting these sorts of goals, and picking metrics to measure their achievement, will help you deliver more value to customers, faster.
The Big Mistake: defining goals as metrics
An easy mistake is to define goals as metrics. Some examples:
- Increase conversion
- Decrease volume of customer service queries
- Increase customer return rate
These make intuitive sense. Why wouldn’t you want to increase conversion or customer return rate? But how do you feel about these goals:
- Make payments easier, evidenced by an increase in conversion
- Reduce confusion, evidenced by a decrease in customer queries
- Increase satisfaction, evidenced by higher return rates
Same metrics, big difference. These goals say exactly how you want to satisfy customers. The point here is that metrics should never define goals. Metrics only provide evidence that you’re achieving your goals.
If this doesn’t do it, here are my main reasons for not using metrics as goals.
Inflexible
Defining a goal as a metric limits your achievement to where you can measure that metric. Good goals are measurement agnostic and flexible enough to capture achievement in any scenario.
Unforgiving
Metric-defined goals are unforgiving when you pick an unreliable, invalid, immovable, or generally bad metric, which you almost certainly will. Good goals forgive bad metric choices and let you use others when you need to.
Uncertain
With a goal like “Increase conversion,” you’ll eventually have to face waves of uncertainty when things don’t go your way. Good goals clarify how to interpret evidence no matter which direction things go.
Unsafe
It’s not safe to make strong conclusions from any single metric, because metrics move for many reasons. Good goals let you triangulate your progress with multiple metrics and give you confidence in your decisions.
“Metrics should never define goals. Metrics only provide evidence that you’re achieving your goals.”
The seven-steps for setting goals and picking metrics
Having faced these hidden challenges many times, I broke down my process for setting goals and picking metrics into seven steps. It takes some extra time at first but will quickly become habitual and set you up for much more success than you’re likely to have otherwise.
Step 1. Draft your goal
What do you want to achieve? Don’t overthink it. Just put thoughts to paper. To demonstrate, think about wanting to improve the payments process of an e-commerce website. My first thought was:
Step 2. Get to the heart of what matters
“Why? Why? Why?” Ask yourself over and over. Why is this my goal? What problem am I really trying to solve? How am I improving value for my customers? Prod and probe until you reach the delicious center of what matters.
Why would I want to reduce clicks? Seriously? Maybe more is better. Keep asking and challenging and you might conclude that I really want to:
Do not underestimate the difficulty or value of this step. You’re not done if there’s still a metric in there. Every time I take people through this step, I have to keep pushing the question “why” until we get to something concrete and meaningful. It almost always starts with us surfacing biases and uncertain or conflicting objectives but ending with deeper insights and clearer purpose.
Step 3. Set your goal as a dimension with direction
The next step involves some forward thinking. At the end of the day, you’ll look to see if your metrics go up or down, in one direction or another.
To plan a connection with metrics, rephrase your goal as a dimension (the thing you’re interested in changing) with direction (how you’d like it to change). Here’s how I would rephrase our payments goal:
Be sure to define your direction with two clear poles: better/worse, satisfied/unsatisfied, more/less, and so on. The opposite of “easy” is “hard”. But what would the opposite be of something like “optimize”? If you can’t define both poles, you can’t interpret what’s happening if your metrics go in the opposite direction to the one you were expecting.
Step 4. Draw your goal
The easiest step: draw your dimension on an arrow pointing in the direction you want it to go.
This helps keep everything in order for the following steps.
Step 5. Imagine what you’d expect to observe at each end
For each end of your arrow, ask yourself, “In a world where [dimension] is [direction], what would I expect to observe?”
What would you observe in a world where it’s easy for customers to pay? How about where it’s hard? Get creative and I suggest having sticky notes handy. Here are some things I came up with:
Try to keep your focus on how the customer is thinking, feeling, or behaving, and not to include metrics yet.
Step 6. Refine and visualize expectations
For each expected observation, work through steps 2 to 4 to turn them into dimensions and directions that line up with your goal.
Things really start to take shape here and, for me, this is where the visual helps a lot.
Step 7. Pick your metrics
At long last, for each expected observation (blue box) list the metric or metrics (things you can measure) and directions that would be evidence of them happening. Overlay them on your visual like this:
There you have it! A visual representation of your goal, the things you expect to see if you are achieving it (or not), and the pattern of results you can actually measure to record them.
Summary and Practical Tips
At the end of the process, you can link your goal to metrics like this:
If all your metrics move in the directions you expect, then you’ve found evidence that you’re achieving your goal.
One tip if you do try this is to limit yourself to the 3 to 5 most relevant metrics. That should give you more than enough information to measure your achievement without flooding your dashboard with dials that might be faulty.
Finally, here’s a cheat sheet for the next time you give it a whirl:
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Thanks for reading, please share your thoughts and comments below, and I hope this was useful for you.
Want to read more? You can follow my latest posts as @drsimonj here on Medium, Twitter, or LinkedIn.
