How do you measure your value?
One of the most fascinating pieces that we’ve read lately came from Looker founder and data analyst guru, Lloyd Tabb.
Tabb’s thesis goes right to the center of one of the most important questions facing any agency – what’s more important to your long term success, how valuable you are or how much value you are delivering?
The best way to answer this question depends on which set of metrics you believe offers a true measure of your success.
First, there are vanity metrics. Vanity metrics are essentially surface level metrics, things like number of hits, numbers of downloads, or the number of people using an app or a service.
Clarity metrics go much deeper. Clarity metrics are true operational benchmarks, things like the number of minutes a day that your product is actually being used, how long they had to wait to get service, how much are you paying for users and how long it takes to pay back that acquisition cost,
As an agency, you need to be developing and delivering solutions to your clients that are clarity based. Why?
Because clarity metrics really are the only measures that really matter.
In 2018, providing clients with solutions that offer true customer value is the only way to help them win.
Take car-sharing services…
The most commonly cited metric you read in the press is the sheer number of riders.
“But that’s the vanity metric. It doesn’t explain why customers keep coming back or how services can improve. To make service better, measure pickup times. The faster the car comes the more likely I am to use the service again,” Tabb says. “The difference between waiting one minute and 10 minutes is a clear indicator of quality of service. Analysis of the data will probably show you a cliff of what’s acceptable in wait times. Tracking wait time failures across dimensions like neighborhood or driver will improve customer satisfaction and repeat business over time.”
The implications are clear.
What you choose to measure can either give you real insight into your product, service and customer or it can merely provide you with anecdotal information about the category or vertical you’re operating within.
Data analytics can either be the hammer or the anvil.
Here’s to being the hammer.