Metadata
- Author: Olga
- Full Title:: KPIs Done Wrong: Fixing Common Reporting Mistakes - Issue 228
- Category:: 🗞️Articles
- Finished date:: 2024-10-23
Highlights
here are 20 ways to calculate ARR:
(View Highlight)
📝 I often see people debating the “right” way to calculate a KPI, arguing over which method is more accurate or appropriate - like whether to use bounded or unbounded retention, whether to exclude new users from DAU, or whether to exclude canceled trials from churn rate. The reality is, we actually need all of these KPI variations to fit different use cases. (View Highlight)
chasing reporting accuracy often comes at the cost of making it more complicated. (View Highlight)
It’s all about finding the balance between precision and ease of report maintenance. If you can, aim to keep KPI logic simple and intuitive. Limit the number of variables and calculations. (View Highlight)
How to determine if your proxy metric is effective:
- The proxy metric should be sensitive enough to be influenced in the short term - such as screen views, button clicks, session time, or number of transactions.
- Good proxy metrics are simple and don’t involve many complex filters or calculations.
- The metric should be independent of other product features, marketing initiatives, or similar factors.
- The change in the proxy metric should indicate the direction of change in the target metric. (View Highlight)