How to establish key business metrics

List articles about key business metrics are everywhere. You can find 55 "essential" metrics for this and 78 for that.

Some of them are genuinely useful. But almost all of them assume you've already done the behind-the-scenes work: figuring out which metrics actually fit your business, and whether your team can do anything meaningful with them.

That assumption leaves a lot of people behind.

It's especially true now, when the SaaS world is, as our own founder put it, "awash in metrics." Thousands of articles debate the merit of this metric or that. And yes, plenty of list articles will tell you exactly which ones you need right now... or else your entire company will come crashing down.

Business, life... nothing works quite that way.

The real problem isn't a shortage of information. It's that most of that information is only useful if you already know which key business metrics you need and precisely how to put them to work. Many businesses aren't sure about either.

A growing company just seeing the first signs of product/market fit is searching for which metrics to focus on so it can start to scale. An established business navigating a major pivot needs a new set of metrics to spur growth. An internal innovation team launching a brand-new product may find that the metrics they lived by no longer apply.

This piece is for anyone humble enough to admit they're unsure, and motivated enough to do something about it. It's for leaders who want to go beyond the list articles and into the work that actually makes metrics useful.

There are many processes out there, including proprietary methods that cost good money. What follows is an approach drawn from what many teams, including a few of my own, have found success with. It runs in two phases.

Phase 1: choosing the right business metrics

• Determine the stage (or even micro-stage) of your business

• Assess the strengths of your team

• Understand where your potential customers hang out (and where they go for answers)

• Categorize which key business metrics you could pursue, and make a decision

Phase 2: making metrics work inside your company

• Delegation and ownership

• Benchmarking and goals

• Processes and systems

• Communication and transparency

• Accessibility and visualization

Phase 1 is about finding the metrics that genuinely matter for your product or service, and matching them to your team's capacity and overall strategy. Phase 2 is about action: who owns what, how the work gets done, and how the numbers stay visible and trusted across the business.

Phase 1: choosing the right metrics

1. Determine the stage (or even micro-stage) of your business

Some metrics are simply more important at certain stages than others. You get more confident answers when you're asking the right questions for where you actually are.

If you're in the startup stage, the critical question is whether users are engaging with your product, and whether that engagement is the kind you want.

Once you've moved into the growth stage, Monthly MRR and Customer Churn Rate become the foundation for growth and retention decisions. These are the numbers that tell you whether the business is actually building on itself.

When you've established that you can grow and are growing, efficiency becomes the focus. That's when metrics like CAC Payback Period and Quick Ratio start to matter most.

For a closer look at the metrics that matter at each stage, see: The 14 key metrics of modern business leaders.

Which stage is your business in right now? Is it somewhere between stages? Ask others on your team what they think. When you land on an answer, it becomes a torch that lights the way for everything that follows.

2. Assess the strengths of your team

With the pace of business today, especially in SaaS, there's a strong case for focusing on strengths rather than spending precious time shoring up weaknesses.

Understanding your team's strengths doesn't mean mastering StrengthsFinder. It means taking an honest look at what each person brings, not just in the context of your company but in the industry at large.

You might have someone who could be a masterful project manager but is stuck trying to write all the technical documentation on their own. If you're running a lean team, that may simply be the reality for now. But if there's any capacity to nudge that person toward their natural strength, it's worth pursuing.

Your team's strengths also shape the overall strategy you can realistically put in place. Here's what that looks like in practice. If you're short on advertising budget but have built a team well-suited to inbound marketing, you should lean into that strength. And you'll need to lean into the metrics that come with it: unique readers, email subscribers, organic-content-to-trial conversion, and similar indicators.

The strategy follows the team. The metrics follow the strategy.

3. Understand where your audience hangs out (and where they go for answers)

Even at major marketing conferences, seasoned marketers advise founders not to spread themselves thin across too many platforms, while doing exactly that with their own businesses.

The drive to be everywhere your potential customers might be is understandable. It's also one of the fastest routes to burnout, and one of the easiest ways to fall into a cycle of constantly starting and stopping metrics-based campaigns.

When you know where your audience is, you can build a focused strategy around reaching them. If they're on LinkedIn, the relevant metrics look different than if you're scanning leads at a trade show. The platform shapes the numbers worth tracking.

A useful example: Booyah, a small ice cream shop based in Toronto, knew exactly how to reach their audience. They understood the visual appeal of their product, their own ability to capture it, and people's habit of sharing food photos. Instagram was the obvious fit. And because Instagram relies heavily on hashtags, including location-based ones, they could target their efforts to potential customers in and around the city.

Here's a story about how they used Instagram metrics, among others, to fuel their growth.

There's a second layer to this. Many businesses today need to be both a great product and a trusted educational resource. That means knowing where your customers go when they have questions, what those questions are, and whether you can become their go-to source for answers.

Two free tools to help you find out:

• Answer The Public: surfaces the questions people are actually searching for

• Bloomberry: shows where those conversations are happening online

Content marketing metrics will tell you whether you're becoming that trusted source over time. Here are some content marketing opportunities worth reviewing.

4. Categorize which key business metrics you could pursue, and make a decision

"Could" is the key word. You may be fully stretched just keeping up with product updates, with no capacity to build out a content strategy. That's a legitimate constraint, not a failure.

This is where capacity meets strategy. By determining your company's stage, assessing your team's strengths, and understanding your audience, you now have what you need to categorize the metrics worth pursuing and identify what a realistic strategy around them looks like.

If there's only one viable path, now you know. Move to Phase 2. If there are a few options worth considering, lay them out and have an honest conversation with your team about which one you're best equipped to pursue. Anonymous surveys and one-on-one conversations both work well for getting a clear read on where people stand.

In my experience, making the final call tends to come together more cleanly than expected. When enough thought has gone into the previous three steps, and honest conversations have happened, there's usually a clear direction that most people can get behind.

Once you're there, you can focus on the metrics your team is genuinely ready to act on.

If you've made it through Phase 1: good. Now the real work begins.

Phase 2: making metrics work inside your company

1. Delegation and ownership

Establishing a key business metric is not enough; you must build it into your company.

Ray Dalio's Principles (PDF here) offers one of the clearest frameworks for thinking about this. Dalio describes the need to treat your business as a machine: some people design and delegate, others carry out the work. Both roles are essential.

He puts it this way:

"Your 'machine' will consist of the design and people you choose to achieve the goals. While having the right design is essential, it is only half the battle. It is equally important to put the right people in each of these positions."

Dalio also makes a point that stings a little for hands-on leaders:

"Managers should view the need to get involved in the nitty-gritty themselves as a bad sign."

There are times when getting into the details is necessary. But leadership around key metrics requires that everyone on the team knows who is delegating and who owns each specific metric. That clarity makes it easier to prioritize, to say no when outside projects land on the desk, and to stay focused on what actually moves the business forward.

Ownership without ambiguity is what keeps the machine running.

2. Benchmarking and goals

Once your metrics are agreed upon and ownership is clear, the next step is understanding benchmarks while setting goals that are realistic and meaningful for your specific situation.

There's often a tension here. When an email marketing lead sees a 25% open rate for a list of 50,000 cited as the industry benchmark, she has to decide whether to chase that number or set her own target. Her own goal is more useful. She can work toward it, track what she achieves, and then use those results to set her own benchmarks over time.

Industry benchmarks get diluted quickly by differences in context. A financial services newsletter, where subscribers act on time-sensitive investment information, will have a very different open rate than a five-day email course where subscribers learn at their own pace. Comparing the two tells you almost nothing.

Research the benchmarks. Set your own goals. Track your progress against those goals, and use that history to build benchmarks that actually reflect your business.

3. Processes and systems

A process is the organized set of activities that help you get something done. When you run multiple processes consistently, they form a system.

If you're running an A/B test on a product change, you likely have a process for how that works. Some teams use tools like Trello, moving a card from Test Launched to Collecting Data to Complete so everyone stays aligned. That's a process. String enough of those together and you have a system that keeps the machine moving.

What matters here is that processes are easy to explain and easy to follow. Each person on the team needs to be able to work toward their metrics efficiently, without reinventing the workflow every time. And the leader's job is to see how all those processes connect, not to get pulled into running them individually.

A manager who is constantly adjusting individual parts risks losing sight of whether the whole machine is actually working. The system view is what makes the difference between a team that's busy and a team that's making progress.

4. Communication and transparency

Even the best processes break down without clear communication and genuine transparency.

The owners of each part of the machine should have some sense of what the others are working on and why. They should know who to contact, and how. Where one person's work directly affects another's, some degree of shared accountability makes sense.

The leader who is stepping back to see the whole picture still has a role here: making sure the communication lines within the team are clear, that there are safe channels for questions, that people take pride in what they own, and that the key metrics everyone is working toward are visible and shared.

Dalio again:

"Be radically transparent. Provide people with as much exposure as possible to what's going on around them. Allowing people direct access lets them form their own views and greatly enhances accuracy and the pursuit of truth."

Transparency only works when it's paired with access.

5. Accessibility and visualization

Saying the data is available means nothing if people can't actually get to it. Transparency without accessibility sends a quiet message: the information exists, but not for you.

If you're in a leadership role, your team needs constant, ideally real-time access to their own metrics and the metrics of the business. One of the most effective ways to build that into the culture is a TV dashboard: a live display in the marketing area showing that team's numbers, another in customer success showing ticket volume and response times.

When the numbers are always visible, they stop being something people have to remember to check. The team knows where things stand without having to ask, and without waiting for someone to pull a report or paste numbers into a chat. That's the difference between a metric that informs decisions and one that sits in a spreadsheet.

Data that's visible, reliable, and consistently presented builds something harder to measure: a shared sense of what matters and why. That's what makes the work feel connected to something larger.

A few final thoughts on establishing key business metrics

If you haven't already, spend some time with Principles by Ray Dalio. You may disagree with parts of it, but his leadership at Bridgewater Associates through the 2008 financial crisis, when most competitors were collapsing, is worth understanding. Some of the ideas will stick.

One that applies directly to this work:

"Create an environment in which... no one has the right to hold a critical opinion without speaking up about it."

Feel free to mix and match parts of the two phases here. You may move through one step quickly and spend weeks on another. There is no perfect formula, and the process should fit your business, not the other way around.

Before you go deep into either phase, consider sharing What are Business Metrics? with your colleagues. Getting everyone aligned on the basics at the start will save time and make the harder conversations easier.