Understanding and tracking KPIs is essential, but as with everything in the business world, there are traps to avoid. When you're just starting out, it's easy to fall into some common mistakes. Let's tackle these potential pitfalls and see how to avoid them.
1. Focusing exclusively on growth
Seeing the number of subscribers increase is always pleasing. However, focusing solely on acquisition without paying attention to retention is a recipe for disaster. High churn coupled with high acquisition will be costly in the long run.
Balance your efforts between subscribers retention and customers acquisition. Ensure that new customers receive consistent value from your service.
2. ignore small changes
A small change in churn or CAC might seem insignificant at first glance. However, over the long term, these small variations can have colossal impacts.
Be vigilant. Set up alerts to keep you informed of changes in your KPIs, and act quickly to understand their causes.
3. Unnecessary comparison
It's natural to want to compare yourself to industry leaders or competitors. However, each company is unique, with its own dynamics, challenges and opportunities.
Instead of making general comparisons:
- identify companies similar in size, market or business model and compare your KPIs with them.
- Better still, use your own past performance to measure your progress.
4. Don't see the forest for the trees
With so many KPIs to track, it can be easy to get lost in the details and miss the big picture.
While tracking specific KPIs, step back regularly to assess how they interact and what they mean for the overall health of your business.
5. Ignoring the human side
Numbers are important, but behind every subscription is a person or organization with needs, desires and concerns.
- Integrate systems to gather qualitative feedback.
- Listen to your customers,
- organize interviews or surveys
- and use this information to enrich your understanding of KPIs.
6. Being too rigid
The world is changing, as is customer behavior and the competitive landscape. Holding on to obsolete strategies because they worked in the past is not the best approach.
Be agile. If a KPI isn't performing as expected despite your best efforts, it may be time to re-evaluate your strategy.
By avoiding these common mistakes, you'll be able to get the most out of your KPIs, make informed decisions and lead your subscription-based business to sustainable success.