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December 31, 2021

In my business, I used to focus on input metrics. How many hours did I work? How many new clients did I bring in? etc. But then I realized that focusing on output metrics was a much better way to measure success. Output measures how effective you are at completing tasks and achieving goals. It’s more important to focus on what you’re actually accomplishing, rather than just putting in the time or effort. Between input vs output metrics, are you focusing on the right KPIs for your company?

Input vs Output Metrics

What is the difference between input vs output metrics? Input metrics are used to determine how effective a company’s marketing and sales activities are in generating leads.

Output metrics, on the other hand, are metrics that are used to determine how effective a company’s sales and marketing activities are in converting leads into customers.

Setting Goals And Performance Metrics

What are performance metrics? They are measurements of how effectively a business and its staff meet its goals.

All stakeholders should be involved in deciding these key performance indicators. Everyone from customers to the board should be taken into consideration.

At your meetings, you can assign tasks to your employees. This could include telling the marketing team which client to focus on or which part of the company’s budget needs to be allocated.

Having clear, attainable goals for yourself and your business is essential to persuading potential investors that you know how to make a profit. Having a plan for the future and knowing how to reach your goals can be incredibly influential when asking for money.

There are two kinds of data: input (behavior) and output (results).

It is important to distinguish between input and output when setting and achieving your goals. By understanding this distinction, you can increase your effectiveness in reaching your objectives.

When running your business, it’s important to have specific, quantifiable, and achievable objectives so that you can clearly define success for your team.

These metrics help you prioritize which activities to perform, and which customers to focus on.

Assigning tasks to team members based on their performance is a great way to track their achievements.

How To Set Goals – Output Metrics

Metrics that measure results are output metrics. They are similar to the result of a science experiment with more analytic data.

Most of our goals are centered around quantifiable results: $5 million in revenue, $500,000 in profit, a 10-point NP score, and so on.

All of our financial statements are completed with output metrics such as revenue, cash, etc. These output metrics are used to measure where we are, get a sense of our baseline, and set our future financial goals.

What it can’t do, however, is change our habits.

How To Measure Effort – Input Metrics

Input metrics are less popular. They focus on what we put into the business and what we can control.

Some input metrics are how many sales calls you make, how many hours you spend writing blogs, and how many posts you shared on social media. The best way to measure your input metrics is to look at behaviors that you can control.

Imagine a world where we can set daily goals for the number of sales we want to achieve. The only factor that determines whether or not we succeed is ourselves.

Closing 1 deal (outcome) depends on a lot more than just making a phone call. There’s the factor of whether someone will actually pick up, listen, and agree to purchase.

What To Focus On – Driver Metrics

Driver metrics are just what the name says: they drive or influence the performance or value of other key business measures. Identifying driver metrics is the single most important skill when determining what to monitor and what to improve.

When we set goals for ourselves, it’s important to understand the underlying motivations behind them. By doing so, we can identify small behavioral changes that can have a big impact on achieving that goal.

Why Product Managers Should Track Metrics

The only way to know what people want is to measure it. Don’t guess, just track it.

Relying on gut feelings, speculating, and gambling on user feedback is no longer a viable strategy for making decisions about your product.

To stay on top of your game, you need to be setting and tracking the KPIs that make sense for you and your business.

Product metrics can help product managers:

  • Identify features that are most popular, underutilized or a waste of time
  • Learn how users engage with a product
  • Find out how many users return after signing up
  • Gauge customer satisfaction

The key to growing your business is learning which product metrics are most essential to track.

Which Metrics Should Product Managers Monitor?

Most product managers track the following metrics:

  • Customer engagement
  • Sales revenue
  • Conversion drivers
  • Customer retention
  • Product activation
  • Active usage
  • Customer satisfaction score

Which key performance indicators (KPIs) are most important? A global survey of 500 product managers showed that these are the top three:

input vs output metrics (Source)

While active users, reach, and conversions are all great ways to measure the success of your product, they’re not the only important ones.

Every business and product is different and has different goals and needs depending on its stage and its ambition.

Industry-Specific Metrics

One of the best ways to understand what you should be monitoring is to see what your peers are paying attention to. Here are some common examples of what we’ve seen across different verticals:

input vs output metrics (Source)

Although these are more specific, they still aren’t enough. There is no single, universal way to measure the success of your sales team.

To get the most value out of your analytics, you need to tailor them to your business.

Input vs. Output Metrics

While revenue and retention are important, they’re both output metrics. You won’t be able to affect them until it’s too late.

This is why you need to measure and track the inputs specific to your product or service, your industry, and your business.

The most well-known example is the “7 friends in 10 days” metric on Facebook.

After noticing that new users who had 7 Facebook friends within their first 10 days of signing up were much more likely to be retained as customers, this became a key input parameter used by the company to measure retention.

Find Your Focus Metric

One way to approach this is to frame your outputs as your main focus, while your inputs represent all the smaller elements that support that main point.

While your main focus may be on the number of sales you make, supporting metrics will be much more specific, such as how many phone calls you made, or how many people you met.

As a product manager, it’s essential to have checks and balance systems in place. This could include setting up key performance indicators (KPIs) and measuring whether or not those KPIs need to be adjusted.

Conclusion

If you want to be successful in business, it’s important to know the difference between input vs output metrics. Output measures how effective you are at completing tasks and achieving goals. This is a much better way to gauge your success than simply counting the hours you work or the number of new clients you bring in. Keep your eye on the prize and don’t get sidetracked by focusing on the wrong things.

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