Instead of focusing on what’s easy to measure, startups need to track their progress with what really matters to the success of their business.

Growth will get your startup and team to where you’d like to be, and the growth metrics are your guide on how to achieve this. So the only way to maintain sustainable long-term growth is to choose the factors that really matter to your business, and then maximise the right combination of those.

Thanks to sophisticated digital marketing technology, companies often only measure and maximise what’s easy to quantify, such as top-line customer acquisition, CPA, or even conversion rates. But instead we need to look at what ultimately matters to growth which is what matters to running a successful business. That’s why it’s important to identify the factors that will make your company successful and that you can directly influence through your work, such as the strength of your brand and customer relationships, cost-effective growth marketing, and a highly effective and satisfied team.

There are two sets of metrics: leading metrics that directly influence how well your company is doing, and lagging metrics that improve as a result of doing the right things.

There are two sets of metrics: leading metrics that directly influence how well your company is doing, and lagging metrics that improve as a result of doing the right things. It’s easy to mistake the lagging metrics for all that matters, because they’re the easiest to measure and they show how much money you’re making or how many new customers you’re acquiring. But that’s not all that matters to growth or to running a successful business. The most sustainable way to grow is to keep an eye on both leading and lagging metrics - to work on what really matters to your business, whilst achieving the revenue and acquisition figures you need to run a financially successful business. 

So spend your time on improving the leading metrics, and keep a strict measure on the lagging metrics to make sure you’re on the right track overall. This might need some fresh thinking on how exactly to assess the metrics that aren’t as easy to measure. For example the strength and clarity of your brand mission is notoriously difficult to express quantitatively, although it would still be valuable to ask your team, customers and partners about how compelling your messaging is and see how many different descriptions of your value proposition you’ll get. 

Overall, it’s worth emphasising that the process alone of thinking through these metrics and how to capture them will bring you closer to what really matters to the success of your business.

Leading Metrics: Those determining the success of your business

Clarity of the brand / mission / positioning
  • Your company’s ability to clearly communicate your value proposition internally and to customers
  • Ask yourself: 
    • How easy is it to come up with ad and website copy, that reflects what your brand can do for your customers?
    • How easy is it to write relevant, valuable content?
    • If you ask 10 customers to describe what you do for them, how many different answers will you get?
Strength of customer relationships
  • Satisfaction with product
  • Satisfaction with customer service and delivery of the product
  • Customers’ trust in your brand and willingness to recommend it to others
Effectiveness of growth marketing framework
  • % of growth from non-paid channels (referrals, organic search, content marketing, online community, organic social) - this should be at least 50-75%
  • Number of effective growth channels that form your growth framework - should be at least 5 and include organic search, email and referrals
  • Understanding of how to run growth marketing framework profitably at a small scale - this needs to be ensured before looking to raise funding for scaling
Team effectiveness & satisfaction - measure all of them
  • Enjoyment of work
  • Quality of match with skill set 
  • Team dynamics / enjoying working with others
  • Workload
  • Realistic expectations

Lagging metrics: Those reflecting the success of your business

Existing customers
  • Total revenue
  • Avg. revenue per customer
  • Retention / churn rate
  • Customer lifetime value
  • Referral rate
Growth framework
  • New customer acquisitions
  • Cost per acquisition
  • Return on ad spend / return on marketing investment
  • CLTV / CAC ratio

How we chose growth metrics for our business

To give you some more inspiration, here are the metrics we have chosen to prioritise at Newton Bell. They represent what growth means to us and guide us in how we want to develop the business over the long-term.

Leading metrics
  • Clarity of brand
    • The similarity of various projects in terms of scope / challenge
    • How clear are we on communicating our value proposition through content, website and conversation
  • Strength of growth framework
    • Number of growth / business development activities we know can generate quality leads
    • New projects coming from existing clients
  • Quality of client relationships
    • The quality of the match between the client and Newton Bell (in terms of their needs, as well as personalities/approach)
  • Team effectiveness & satisfaction
    • Enjoyment of work
    • Quality of match with skill set
    • Team dynamics
    • Balance of workload
Lagging metrics
  • Total revenue
  • Average revenue per client
  • New projects
  • New pitches or proposals
  • Referrals from existing clients or network

Sustainable long-term growth requires you to keep working on what really matters to running a successful business: the clarity of your brand, customer relationships, knowing how to acquire and retain customers, and having a thriving team. The only way to keep improving on these things is to choose the combination of leading and lagging metrics that’s right for your business, and to regularly check on your progress along those lines.