The folly of using metrics out of context

"Last year we paid $235,000 in safety bonuses"

That's a message I saw on a taxi the other day.

It sounds good in that 1-second of attention as it drives by. Sounds like a safe taxi right? Safer than the other ones who don't pay that much for safety.

But then I thought about what it claimed.

The unsaid message is that this taxi company is safe. But the only proof they give is a single number without any context.

Is $235,000 a lot? Or is it just 0.01% of their revenue?

Is it more than last year? Or is it half or a tenth of what it's been?

How are safety bonuses calculated? Is there a bias to not report them so a driver appears safer than they are? Are all incidents reported and measured or just major ones?

I don't really expect the company advertising this to answer these questions, at least within the space of a taxi door.

This does illustrate that many metrics need a bit of context before you can judge if they are good, bad, or just a vanity metric.

That's why I try to give as much context around the metrics in Repeat Customer Insights.

It takes more work to compare your store to industry norms and to itself, but it's much more valuable than just a single abstract number.

(And with the new features I'm working on this week... it'll be even better soon).

Eric Davis

Repeat Customer Insights icon

Measure your customer loyalty

Measure the different levels of customer loyalty with Repeat Customer Insights. It uses various models to segment and grade your customers based on their behavior.

Install Repeat Customer Insights for Shopify

Topics: Metrics

Would you like a daily tip about Shopify?

Each tip includes a way to improve your store: customer analysis, analytics, traffic, SEO, customer acquisition, Rich Results, CRO... plus plenty of puns and amazing alliterations.