The Measurement Imperative: What gets measured gets improved

Written by David Carpenter | January 27, 2013

“If you cannot measure it, you cannot improve it” – Lord Kelvin

The British mathematical physicist and engineer who figured out the value for Absolute Zero (and has had Absolute temperatures named in his honor ever since) gave us a rule to live by as marketers and business people: If you want something improved, you have to be able to measure it... benchmark it, set goals round it, and figure out how to "move the needle".

We throw that "needle" phrase around a lot these days, especially when helping clients relaunch a stagnant website or begin using social media effectively. But what does it really mean to measure a business? What are the critical KPIs (key performance indicators)?

I was really impressed when a prospective client turned us onto the For Entrepreneurs blog by David Skok, a five-time serial entrepreneur turned VC, at Matrix Partners. He goes above and beyond and shares some serious know-how and business value in a post entitled, "SaaS Metrics 2.0 – A Guide to Measuring and Improving what Matters".

David uses HubSpot, of which we are a platinum agency partner, as one of his two primary examples, which makes the article even more compelling and timely.

If you have a Software as a Service or Subscription revenue model business, this post is a must read. If you're merely a fan of measurement and analysis, you'll get a ton of value out of reading it as well. Here's the premise of David's post:

SaaS/subscription businesses are more complex than traditional businesses. Traditional business metrics totally fail to capture the key factors that drive SaaS performance. In the SaaS world, there are a few key variables that make a big difference to future results. This post is aimed at helping SaaS executives understand which variables really matter, and how to measure them and act on the results.

The goal of the article is to help you answer the following questions:

Is my business financially viable?
What is working well, and what needs to be improved?
What levers should management focus on to drive the business?
Should the CEO hit the accelerator, or the brakes?
What is the impact on cash and profit/loss of hitting the accelerator?

What KPIs do you use to measure your business?

Standing out amongst the crowd as an SaaS company requires having traffic and metrics to measure. In order to hit the 3 Keys of Success previously mentioned, streamlining your business for greater engagement and profitability is a logical starting point. In the hands of a seasoned marketer, these techniques are expertly implemented and generate focused revenue.

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