Metrics & Measurements: Making Sense of the Numbers In this episode, Sharan and Sudeep delve into the crucial topic of metrics and measurements in business. They challenge the conventional wisdom of "measure everything" and offer practical guidance for entrepreneurs and marketers. Our hosts kick off the discussion by reflecting on an earlier episode, "Measure What You Treasure," emphasizing the importance of measuring critical business factors. However, Sharan argues that many businesses measure everything indiscriminately, leading to confusion and poor decisions. The conversation is structured around three categories of metrics: Forecasts: These are guesses about future performance, such as sales projections and customer acquisition cost estimates. Sharan explains that while forecasts are attempts to predict the future, they should not be mistaken for actual measurements of current performance. Examples include the predictions of a cricket player's performance based on past trends, like Virat Kohli's anticipated scores. Snapshots: These provide status updates on current business performance, like market share and brand measurement scores. Sharan emphasizes that snapshots are point-in-time data that need to be understood in the context of past trends to be meaningful. For instance, understanding a player's current strike rate in a cricket match. Historical Measurements: These look at past performance, such as batting averages or cost-per-lead over time. Sharan points out that while historical data shows how well a business or individual has performed, it is not a reliable predictor of future performance. An example discussed is the initial high ROAS (Return on Ad Spend) of a wellness brand during COVID-19, which significantly dropped as market competition increased. Sharan and Sudeep provide practical examples to illustrate these concepts, including the challenges startups face with limited data and the pitfalls of applying tech valuation principles to FMCG businesses. They highlight the case of Dollar Shave Club, which was overvalued based on initial subscriber numbers but later faced high churn rates, illustrating the risks of misinterpreting metrics. Key takeaways from the episode include: Context is Crucial: Understanding the purpose and context of each metric is essential for making informed decisions. Build Trends: Relying on long-term trends rather than single data points leads to better insights. Informed Forecasting: Forecasts should be treated as informed guesses, not definitive performance indicators. Throughout the episode, Sharan and Sudeep emphasize the importance of using metrics thoughtfully and contextually to drive better business decisions. They conclude by reinforcing that while metrics are essential, their value lies in the context and trends they help build over time. Join Sharan and Sudeep as they lay out these fundamental principles, providing a practical guide to enhance your effectiveness as a marketer. Ready to elevate your understanding of business metrics? Tune in and transform your approach to data-driven decision-making. As always, do mail us your feedback, comments and any questions you may have for our hosts at [email protected]. We love hearing from you. SHOW WEBSITE CONNECT WITH OUR HOSTS Sudeep Chawla - ⁠Linkedin⁠ Sharavana Raghavan - ⁠Linkedin⁠ FOLLOW US CoBB - ⁠LinkedIn ⁠⁠| Instagram⁠ CREDITS - Album Art & Design by ting.in - Voiceovers by Anjale Stephanos - Music from Zapsplat.com *************************************** Please tell us what topics you'd like to have discussed on the CoBB, by filling in this ⁠CONTENT SUGGESTION FORM⁠⁠ It only takes a few minutes, and it will help us provide you with the content most relevant to you.