Monday, April 12, 2010

Key Business Metrics [A VC]

Damn Fred Wilson and his intelligent posts.

This time he writes about Key Business Metrics and how important they are.

Early on when the company is developing its first product or service, those metrics might be related to product development like development resources, features completed, known bugs, etc. Once the product or service is launched, the metrics might shift to include customers, daily active users, churn, conversions from free trial to paid customer, etc.

These metrics are critical. Not necessarily THESE metrics, but a business must have clear metrics or key performance indicators and how to measure these.

I was shocked to find out how often these are missing, and it's so frustrating not knowing what you're judged by.

I've dealt with this at ESPN and I've dealt with it with clients.

With ESPN, KPIs aren't shared widely enough.

And clients know they want more Twitter followers and Facebook fans, but they don't know why.

As Fred points out, there are many different metrics to pick from. I'll let you check out his post for the full list.

But I'd add one to the customer service metric: Quality. And you can measure this by analyzing the number of returns, complaints or negative feedback your product or service receives.

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