The Hierarchy of Metrics

hierarchy of metrics

I spent this past weekend with a group of Duct Tape Marketing Consultants determined to gain a better understanding of how to use metrics to guide our own business and increase the value we bring to client engagements.

Perhaps the greatest discovery for me was that while there are many things we can and should measure, there’s a hierarchy to how we approach what gets measured and like any hierarchical structure if you don’t set up the base, you can’t hope to reach the pinnacle. (More on that in a bit.)

Business owners shy away from the topic of measurement, likely because it’s hard. But, if one of the primary objectives of owning a business it to grow and improve then this is your truth – you can’t improve what you can’t measure.

[tweetthis]If the objective of owning a business it to grow then this is your truth – you can’t improve what you can’t measure.[/tweetthis]


Now, others have said some variation of that statement, but with a culture of measurement, I believe your business is destined to float around aimlessly. You may indeed get to your destination, but at what cost?

Of course, the flip side is that you can overwhelm your brain with every possible measurable detail and then you might just end up worse off in the end. I mean you do have clients that need some attention too.

What to measure

Perhaps the toughest chore is determining what indeed needs to be measured. There’s no shortage of candidates. You have money metrics, content metrics, social metrics, conversion metrics, growth metrics, and even a few competitive metrics that all must be considered to understand a complete picture.

But, in the end, there may only be two things that matter.

Cost to acquire a new customer
Lifetime value of a customer

I don’t think most would argue that if you had a very firm handle on both of those numbers and could then focus all of your attention on dialing them in, this whole business thing would be pretty simple.

As I’m sure you’ve concluded, however, the progression to get to either of those numbers is where the work lies.

The first task is to accept that you can’t simply measure what’s easy, you have to measure what matters, and that’s a process as surely as a skill.

The process

Create metrics that serve priority objectives

First and foremost you must develop or, at least, acknowledge that you have several priority objectives that require tremendous focus and therefore measurement.

Typically, business objectives fall into a list that looks something like this:

  • Increase customer by X
  • Increase top line revenue by X
  • Increase lead conversion by X
  • Grow audience by X
  • Increase average $ per customer
  • Increase quality leads by X
  • Shorten sales cycle
  • Increase retention
  • Expand to new market
  • Increase profit and ROI

Of course, while every entry on the list above is noble and worthy, experience tells me that you can focus on no more than two or three objectives at any given time if you are to make significant progress. Each objective above could likely spin off dozens of projects and experiments and spread what resources you have to devote thin.

Determine how you’ll get inputs

Once you determine your key objectives, it’s time to establish target goals for each and figure out how you will gather the data you need to gauge whether or not you are on track.

If a key objective is to increase retention by 12% for example, you’ll need to know what retention is today of course, but you’ll also need to understand what activity, person or data point you’ll need to keep track of the variable.

Don’t overthink this one, you may just need to make sure there’s someone who’s accountable for looking into the CRM system to extract that number each month.

Establish tools for the job

While many businesses are still held together by spreadsheets and meetings, increasingly dashboards and collaborative spreadsheets are making their way into everyday reality.

Tools like Google Sheets, Dasheroo, and Cyfe make viewing the data you want to track much easier once they are set up. Business owners and consultants alike now have tools that can help keep key success metrics in front of the people who need make decisions based on what’s happening day to day.

Use results to make improvement

Of course, a great deal of what passes as measurement is simply a snapshot view of what happened. While this can be useful to report to an executive team or board, the real value comes by way of analysis.

With the right metrics in place, you might start to see why something happened, what trends the data suggests, and what you might do to make improvement. This, ultimately, is the true value of measurement.

Build a reporting culture

Finally, if metrics and reporting are an afterthought at the top, it will be very difficult to suggest that anyone in the organization by led by numbers.

What if instead of thinking of metrics as something that told the story of days gone by you began to use them to begin with the end in mind.

What if everyone’s job was to increase the lifetime value of a customer? How would that change the way people went to work?

If a consultant walked into your business and said the ultimate goal of their work was to help you increase the lifetime value of a customer – would that get your attention?

The hierarchy

Of course, before you run you’ve got to do a little walking – and perhaps even crawling.


The hierarchy of metrics suggests that you have to start measuring the little things first – you have to set your business and technology up so you can get a glimpse of the basic activity of the business – how your content is performing, how your social and email audience is growing, where your website traffic comes from and how leads are generated.

Something as simple as proper Google Analytics setup and reporting can give you a great deal of this information. The native social media platform and email service provider analytics can round out a great deal of the activity measurement. Tools such as Google Analytics dashboards, Megalytic and SproutSocial help with visualizing these reports.

While these numbers don’t tell a rich enough story to help you understand why someone buys and why they don’t, they are the foundation you must put in place to start to get to the next level.


With an analytics foundation in place, you can aspire to gain even more insight into the performance of your marketing initiatives.

In the performance phase, you’ll start to crave metrics like percentage of leads closed, individual campaign conversion and perhaps even the cost attributed to generating a new client.

This is the bridge stage and may take some time to master as campaign conversion, goal setting, testing and tracking is an art and science on its own.

However, tools like ClickMagick, kissmetrics, mixpanel and ClickMeter are designed to help you track and test conversion funnels. Even using goal setting and funnel visualization options in Google Analytics can give you greater insight into campaign performance.


Once you understand, track and focus on lead generation and conversion channels you are on the path to understanding how every activity contributes to the overall health of the business.

In the ROI phase, you can turn your attention to sales and marketing integration, CRM performance, Brand awareness, business development and yes – the lifetime value of a customer.

Yes, I know there is a great deal that can be done and a great deal that must be done to use data to drive your business decisions, but like every great journey, it begins with a step beyond where you are today.

So begin wherever you are with the end in mind, and the hierarchy of measurement be your guide.


Marketing metrics

You may also like