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Learn From Jonathan Smalley

Optimal Metrics for Executives

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1 — The metrics

2 — The goals

3 — Potential insights

Transcript

I'm Jonathan Smalley. I'm the Founder and CEO at Yaguara.

On Metric Optimization for Executives

As an executive or an ops leader in an eCommerce company, there's a million different metrics you could focus around. We've seen that across industries that some of the best metrics to stay focused on are always that top-line revenue growth. How are we growing week-over-week, month-over-month, quarter-over-quarter? And understanding the cycles and different segments there. The second thing to optimize around is understanding how that customer base breaks out.

Are we generating new orders and new revenue from the existing customer base that are coming to reorder? Or from new customers that we're acquiring? So what is our returning customer percentage across all orders? The next thing to look at is what are our unit economics around each order? What is our average revenue as well as profitability for each order? And what is our average cost per customer per order? These metrics allow us to make data-informed assumptions around what customer growth, customer value, and customer cost will look like long term.

What Are the Challenges of Metric Optimization?

Across all the companies that we've worked with here at Yaguara and thousands of eCommerce company leaders we've spoken to, one of the biggest challenges that we see for ops and interest leaders across the board is knowing what metrics they should be optimizing for and what they should be aligning their team around.

It's really easy to say focus on top-line revenue and growth especially at a time where things like raising a ton of money are celebrated but it's incredibly important to approach these top-line overarching metrics in a really thoughtful way. In a way that not only speaks to the results that you're looking for but also is going to inform and empower employees at a lower level.

We believe that alignment and transparency are paramount to company success and to rapid decision-making. Not only using data in a thoughtful and proactive way and not just the data that that you might normally be individually exposed to but also, that you have a context to communicate with that around. Understanding how what I'm doing, say inside of a CX role might matter and inform what our marketing team is doing.

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