Welcome to our monthly spotlight series! Each month, we shine a light on a new topic chosen by one of our team members. This month, we’re excited to introduce Dragana, who will be guiding us through a crucial subject: KPIs and why they matter.
Dragana leads our marketing team with a creative leadership approach and strong problem-solving skills. She has worked with companies across various industries, including retail, aviation, e-commerce, and finance, using KPIs and metrics to guide and optimize marketing campaigns, ensuring data-driven results for us and our clients.
KPIs, or Key Performance Indicators, are essential for tracking progress and making smart decisions. Read more about KPIs, metrics, and analytics on our previous blog.
However many founders have unrealistic expectations about these numbers and don’t always know what’s typical in their industry. Dragana’s goal this month is to help clear up these misconceptions and provide useful benchmarks to set realistic goals.
To give you a better idea of Dragana’s approach, we chatted with her about KPIs, metrics, analytics, and how to set achievable targets. Keep reading…
Why did you choose KPIs as this month’s topics? What interests you about it?
I believe that metrics are the main (if not sole) indicator of the success or failure of literally anything. And yes, they can be the killer of any motivation or starlight we might have. But if we acknowledge this, face it, and embrace it, success and motivation will seem a lot different.
Every person, especially in the creative and marketing teams, comes up with this ‘super amazing idea’ just because it sounds super cool. But if you think about it: How much will the implementation of this idea cost? What results do I expect? What will I achieve with this idea? How will I measure the results?
It almost always comes down to: ‘Let’s not do it because it makes no sense.’ But if you consider it from a different perspective—such as developing an idea that will help us achieve a specific milestone or KPI (e.g., reaching 1 million views on YouTube, bringing in a new client, increasing web traffic by 10% month over month, or improving the conversion rate by 1%)—we are talking about a much more actionable, on-the-spot, results-driven approach that can actually lead to measurable outcomes. This way, we will know in advance exactly what we are measuring.
We work daily with companies, mostly funded startups, that need to show KPIs and milestones to investors and reach new milestones to secure a new funding round. Our clients often come with unrealistic expectations about core KPIs, believing they are easily reachable because their product or idea is great. In most cases, when the product goes to market, the numbers are not even close to the expected ones, leading to a significant demotivator for moving forward.
What if we set the right KPIs from the very beginning? What if we know exactly what we want to achieve in numbers and have the correct metrics in place? We would be able to see exactly what works well and what doesn’t. We would know in which areas we are strong and which we are weak, allowing us to make more informed decisions about any upcoming activities. There are infinite KPIs for every industry. By selecting the right ones, we can focus on the metrics that truly matter and track our progress more effectively.
Are you more of a numbers or a word person?
A numbers person definitely! I love looking at KPI reports, comparing MoM or YoY changes in anything. Numbers are everything.
You mentioned that many clients come to you with unrealistic expectations about KPIs. What are some of the biggest myth people have about it?
Everyone’s idea is their own baby. It was (and is) the same with me and Solveo. It’s the same with any of our clients and their products. Naturally, because it’s our baby, we believe it’s the best and has no flaws. While clients know their product and industry better than we do, we approach things from a metrics perspective. We generally know industry averages (e.g., CTR, CR, CAC) and have an idea of what to expect once the product hits the market. However, clients often have higher expectations, and it usually takes time to align these expectations with reality based on real statistics and performance after launch. Common myths include:
- Everyone will understand the product and use it easily (usually the person who has spent years developing or working on the product knows it by heart, but 90% of the market will not)
- The product is for everyone (nothing is for everyone. Even the most common daily products have a target. Take milk. Some people drink 0.5% fat, others 3.5% fat, some drink lactose-free, and some drink almond or soy milk, etc. So no, nothing is for everyone)
- I know exactly who my target audience is (until the product is on the market and in the consumer’s hands, we never know the right target. Every person finds a different value, often one that the creator hasn’t even seen or thought of. So, it is key to be open to understanding how consumers find value or interact with the product.)
- The product will sell itself (many believe that once a product is on the market, its inherent greatness will naturally lead to sales. However, without the right marketing, positioning, and customer education, even the best products can struggle to gain traction.)
- High traffic equals high sales (some clients assume that if they drive a lot of traffic to their website, sales will follow. In reality, high traffic doesn’t guarantee conversions. It’s about attracting the right kind of traffic and guiding them through a well-designed customer journey.)
- There is nothing like this on the market. My product is unique, I have no competitors. (If you are among those who have this view, I would just say one thing for you to rethink: Why is that? What is the reason that this product is so good but it still doesn’t exist anywhere?)
These are just a few. The list goes on and on…
What are some key KPIs Startups should track from the very beginning?
There are unlimited KPIs to track for startups, depending on the industry. Here are a few core KPIs to look out for:
- Number of users onboarded (total number of onboarded users)
- Number of active users (only users who use the product daily/weekly)
- Time spent in the app/product/website (how much time do the active users spend interacting with your product)
- Churn rate (percentage of users leaving your product)
- CLTV (customer lifetime value, how much a customer spends on your product in their lifetime of usage)
- Retention rate (percentage of users who continue using the product over time)
- Website Traffic
- CAC (customer acquisition cost, how much money you spend to bring in one customer)
- CTR (click-through rate)
- CR (conversion rate, number of customers over number of website visitors)
- Revenue growth rate (month over month)
- Burn rate (how much money you spend on the product)
- Sales cycle (how much time it takes to get a new customer)
What’s a common mistake businesses make with KPIs, and how can they avoid it?
A common mistake businesses make with KPIs is focusing too much on vanity metrics—those that look good on paper but don’t necessarily provide actionable insights or drive meaningful business outcomes. For example, metrics like social media followers or website visits might appear impressive, but they don’t always correlate with revenue growth, customer satisfaction, or long-term success.
- Align KPIs with business goals by ensuring that every KPI directly supports the business’s core objectives. For instance, if your goal is customer retention, focus on metrics like churn rate and customer lifetime value rather than just the number of new customers.
- Prioritize actionable metrics by choosing KPIs that guide decision-making and lead to tangible improvements. Instead of just tracking website traffic, measure conversion rates to understand how effectively your site turns visitors into customers.
- Regularly review and adjust KPIs as your business evolves to stay aligned with your strategic goals. Assess their relevance and make adjustments as needed.
- Avoid overloading with too many KPIs by tracking a few critical ones that provide the most value. Too many KPIs can lead to information overload and dilute focus.
How do you handle situations where KPIs are not meeting expectations? What steps should be taken?
Everything relies on the project’s initial setup and start. It can either meet or exceed expectations, but it frequently doesn’t because the client has set unrealistic expectations.It’s difficult to tell someone something won’t work after they’ve already raised funding. It’s typical in these situations for the goals to not be reached, but what matters most is that we as a company are aware of this. Telling a client that their goals are unrealistic when they reach is a challenging task since they believe they have a fantastic product. Instead, we try to demonstrate this through small steps and small tests, to avoid a big failure. The clients often want something to happen, but we shouldn’t just shoot in the dark to impress them. Instead, they should become aware of the real situation on their own so that we can manage it better, and at some point, start setting more realistic goals.
Many projects start with this problem, and we’re aware of it, but you can’t show it to the client without evidence. They think highly of themselves, their company, their services, or software—whatever it may be—and you shouldn’t just shoot them down by saying nothing of that is great. Instead, we take it step by step, focusing on one channel and one budget at a time, finding solutions along the way. Some clients have signed contracts but backed out after three months when things didn’t work. We recommend at least six months of testing different strategies, especially with our omnichannel approach.
So, in conclusion, it’s all about small steps that add up to big insights. Each move brings the client closer to seeing their expectations clearly, backed by solid proof.
If you could only track one KPI forever, which would it be and why?
Very tough decision. If I had to track only one thing, I would probably always look at the year-over-year (YoY) change in customers. I believe this would indicate whether any other metric or activity I’m not monitoring is working or not.
How do you see the role of AI and automation in the future of data analysis and KPI management?
KPIs and data are extremely hard to track and follow without a tool that can extract and tell me exactly what I need. As we accumulate more data every day, the only way we can use all that data and actually understand it is through AI tools and systems. Data processing automation is even more important. With all the data at this moment, we still need a lot of processing time, reporting, and data analysis. Automated processes of reporting weekly and prediction of future trends are essential!
Thank you, Dragana, for sharing your invaluable insights on KPIs and metrics. We appreciate your guidance and are grateful for your expertise.
