How to Choose the Right Performance Metrics To Track for Your Business

Have you ever received a Slack message like this…?

We’ve all been asked for on-demand performance updates from our team, boss, client, or other stakeholders. 

You’re often expected to know how everything and everyone is performing at any given time. But with the number of apps you’re using and the amount of data you have access to, gathering and making sense of that information isn’t always so simple — unless you get ahead of it.

If asked right now, can you answer the above question definitively, in a way that truly reflects the work done and the results produced for the business?

Without performance metrics and KPIs to gauge your success, most of us have no way to illustrate to higher-ups what we do or how it impacts the business. And without the right metrics, our “performance” may not accurately reflect the work you’ve done.

But with the right performance metrics, you’ll never be caught flat-footed again when asked for performance updates.

In this article, we’ll show you how to pick the Metrics that help you communicate your impact, and confidently set Goals to predictably produce that impact.  

This article is a part of an in-depth training course on business analytics and Predictable Performance. You can view this information in video form, and see the rest of the training series, here.

What Are Examples of Performance Metrics?

Typically, performance metrics as they relate to your business are metrics that communicate an end result, things like:

• Website traffic
• Leads
• Event Registrations
• Sales
• Upgrades
• Churn, etc.

Unfortunately for most businesses, this is as sophisticated as it gets when it comes to tracking and monitoring performance metrics in order to get a handle on performance and make adjustments when they matter.

Tracking only the outcomes means your team lacks visibility into the specific activities that actually drive those outcomes.

By staying up-to-date on those metrics, what we call Output Metrics, your team can actually forecast performance and get ahead of issues before they impact your business.

The Types of Performance Metrics Your Business Should Track

The first step toward telling an effective story with data is making sure everyone who cares about performance agrees on which metrics are needed to measure it. 

But there are countless metrics you can track using a business dashboard software. Where do you start? First, organize your metrics into 2 categories:

• Output metrics
• Outcome metrics

1. Output Metrics

What are Output Metrics? Output metrics measure your activities. They are direct measurements of the work you’re doing on a daily or weekly basis. Put simply, they measure your output. 

For example, let’s use a fictional company called Predictably, Inc. to illustrate our points here––the team at Predictably, Inc. may track “blog posts published” as an output metric that contributes to their initiative of driving more traffic and signups this quarter. To track the work they’re doing, the sales team may monitor  “sales calls logged” and the support team may focus on “tickets resolved.”

Output metrics allow everyone on the team to use data to answer the question, “What was my output this week?” 

They also help prioritize your daily activities by keeping you focused on things you can control—like publishing a new blog post, making another sales call, or answering 5 more support tickets.

2. Outcome Metrics

But, as I’m sure you know, just tracking what you do isn’t enough. You also need to track the impact of these activities using a business dashboard. 

This brings us to the second metric type that is key to predicting performance––Outcome metrics.

So, what are Outcome Metrics? Outcome Metrics measure the impact of your outputs. For Predictably, Inc. this means they measure the impact of the blog posts published, the sales calls logged, and the support tickets resolved.

Outcome metrics are typically the metrics that companies obsess over. These metrics are the ones that are shared with stakeholders like bosses, clients, and investors. And rightfully so—they’re great indicators of performance. 

So, what would Outcome metrics look like at Predictably, Inc.?

For the marketer at Predictably, Inc, “website sessions” is an obvious outcome metric for them to track. It directly measures the impact of their “blog posts published” goal.” They might also track the number of leads generated or even the number of customers acquired as outcome metrics. 

For the salesperson, “deals closed” is the obvious outcome. And for customer support, Net Promoter Score, retention, or even upgrades are all reasonable outcome metrics to track. 

When used together, output metrics and outcome metrics highlight the work you do and the results of that work on your business.

 Leading vs. Lagging Outcomes

One issue with using outcome metrics is that they’re dependent on people outside of your organization taking an action, like the people that visit your website, the prospects you hope will buy, or the people that rate your support responses. 

In other words, you don’t directly control outcomes like you do your outputs. Nor, should you be expected to. 

While some outcome metrics may show immediate impact and act as leading indicators of success, the most important outcome metrics are usually delayed or lagging indicators of success. This delay can make it difficult to know how to predict performance. 

For example, if Predictably, Inc. publishes a new blog post, sessions from social traffic to their website may spike immediately after they share the content with their followers—a leading outcome. 

However, sessions from organic traffic will most likely take a little while to grow. For Predictably, Inc., the majority of their traffic comes from Google search, making the likely success of any individual blog post hard to detect immediately—a lagging outcome. 

Here are a few other examples of leading indicators of success:

• Website sessions from social traffic
• Deals created
• Net Promoter Score (NPS)
• Video views
• Email open rate

Connecting Your Output & Outcome Metrics

One mistake many companies make is failing to monitor and share their output metrics and their outcome metrics alongside each other.

Because outcomes are often delayed, outcome metrics alone aren’t great at providing you and your team with actionable information on how to improve, nor do they tell the story of how hard (and smart) you’re working to achieve them.

Plus, to really improve performance, you need to know what you can do right now to make a difference. 

To monitor their work effectively and tell the whole story, Predictably, Inc. presents their output (the number of blog posts they publish) alongside social sessions and organic sessions—to show the immediate and eventual outcomes. Expectations are that sessions from organic will go up over time, but not necessarily in lockstep with the amount of content published. 

• Leading outcome: Social sessions
• Lagging outcome: Organic sessions, sessions
• Output metric: Blog posts published

Similarly, while a salesperson from Predictably, Inc. might be able to hustle and create a bunch of new qualified deals quickly, their deals can take months or even years to close. Therefore, they report “calls conducted” as an output metric, “deals created” as a leading outcome metric, and “deals closed won” as a lagging outcome metric. 

• Output metric: Calls logged
• Leading outcome: Deals created 
• Lagging outcome: Deals closed won

Here are the output and outcome metrics that Predictably, Inc. tracks for their initiatives:

Initiative	Output Metrics	Outcome Metrics (Leading)	Outcome Metrics (Lagging)
Blogging	Number of posts published	Website Sessions from Social, Pages per Session	Website Sessions from Search, Leads, Customers
Sales	Calls conducted	Deals Created,	Deals closed won
Customer Support	Number of customers helped	NPS	Retention, Upgrades

Your Turn

For your own initiatives, you can identify the right output and outcome metrics to track alongside each other by working through the Align Exercise in your workbook. (Sign up for the free Predictable Performance training course to access the workbook.) Let’s go through the process together here.

1. First, write down the key tasks you’re responsible for completing as part of a larger initiative or on an ongoing basis.

These are your output metrics. 

For the marketing team at Predictably, Inc., these include things like publishing new blog posts and updating and optimizing old blog posts, so their output metrics would be tied specifically to these activities. 

2. Next, write down the areas of your business you’re looking to influence with these key tasks.

These are your outcome metrics, as they should reflect the impact of your key tasks on the business.

Based on the output metrics we identified for Predictably, Inc., the marketing team would track “sessions” and “signups” as corresponding outcome metrics.

And once you nail this, you start reporting on performance by using one of our performance dashboards available to download here.

Wrapping Up

“Performance” is a huge broad concept, and it means something different to nearly everyone. But the reality is, you need a mechanism in place to enable you to report on concrete performance numbers—as a function of your activities and the results they produce for the business.

By understanding the appropriate metrics to monitor, you can improve performance while establishing yourself as a valuable, data-driven member of your team.