Companies should also take risks instead of making implementing small and incremental improvements.
The author recommends focusing on the “right” metrics that can correlate with long-term business growth in order to out-perform competitors. This could include calculating the cost per response for TV advertising instead of ad recall, lifetime value of acquired customers and not only customer acquisition cost and the unsubscribe rate of email instead of opens and clicks.
Brands can only try “out there” solutions when they take a risk. The author notes that the idea of learning from trying and failing or the “growth mind-set” is popular. For businesses to learn from their failure, they first have to measure whether their experiment worked or not.
Additionally, measurement should not include unsubstantial metrics like ad recall or vanity metrics like impressions. Instead, brands should define and measure specific metrics that relate to business performance.
[6 minute read]