Metric Definition and Incentive Alignment

Analytics is a business impact function, not a service function. To drive impact, you must move beyond "answering the why" to "defining what to do next." This framework ensures metrics are simple enough for everyone to understand while being mathematically linked to long-term growth.

Core Principles

1. Goal on Short-Term Inputs, Not Long-Term Outputs

Long-term outputs like "Retention" or "LTV" are terrible goals because they are impossible to move meaningfully in a 2-4 week sprint or even a quarter. Instead, identify the leading indicators (inputs) that mathematically drive those outputs.

• Output: Retention.
• Input Proxies: Order accuracy, delivery speed, price competitiveness, or selection (e.g., "Adding a Thai restaurant in Sacramento").

2. Prioritize Simplicity Over Mathematical "Perfection"

Avoid "Composite Metrics" (e.g., a "Merchant Health Score" of 0.35). If a team doesn't intuitively understand how to move the needle by 0.01, the metric is useless.

• The Test: If you tell a team the score dropped, do they know exactly which lever to pull? If not, break the composite into its individual components and goal on those instead.
• Rule of Thumb: It is better to have three simple, understandable metrics than one perfect, incomprehensible formula.