Let's be honest – as product marketers, we're drowning in data. Every click, view, and interaction is quantified, creating a sea of data that we must navigate.
Amidst this data deluge, a beacon of clarity emerges: the One Metric That Matters (OMTM).
This singular metric, unique to each business, offers an invaluable focal point around which strategies can be developed, resources allocated, and success measured.
Want to learn more? Great!
In this article, we’ll explore:
- The definition of the One Metric That Matters (OMTM): Gain insights into what OMTM is and why it’s a crucial aspect of driving focus and growth in your business.
- How to identify your OMTM: Learn the methodologies and considerations that will guide you in pinpointing the key metric that will drive your business forward.
- ONTM’s relation to the North Star Metric (NSM): Understand the link between OMTM and the NSM
- Real-life success stories: Dive into case studies that showcase how various companies have achieved significant success through identifying and leveraging their OMTM.
- Challenges and solutions: Explore the common obstacles faced when determining and utilizing the OMTM, and discover practical solutions to overcome them.
- Actionable strategies for implementation: Acquire a range of actionable strategies and best practices that can be implemented to make the most of your identified OMTM.
One Metric That Matters
Adopting the OMTM isn't about disregarding other metrics, but rather about honing in on the one that is most indicative of your product’s performance and prospects.
It’s the metric that, at a particular stage of your business, is the most critical determinant of success. It could be user acquisition for a budding startup, customer satisfaction for a mature product, or average order value for an e-commerce platform.
The OMTM shifts as your product evolves, so it’s vital to periodically reassess what that metric is at each stage of the product life cycle.
Identifying your OMTM
Identifying the right OMTM requires a deep understanding of your product, market, and business goals. It’s about asking the right questions: What’s the key driver of our growth? What do we want to achieve in this phase? What does success look like for us?
Reflecting on my tenure as a Product Manager at Intuit, where I focused on financial data exchange platforms, pinpointing our OMTM was crucial. In the complex financial data landscape, several metrics were competing for priority, from user acquisition and customer satisfaction to the accuracy and completeness of the data exchanged.
We recognized the imperative need for our team’s OMTM to reflect the core value the company aimed to deliver – providing users with a comprehensive and reliable view of their financial transactions.
After thorough market research, discussions with users, and internal brainstorming, we identified percentage of missing transactions as our OMTM. This metric was not just a measure of our platform’s reliability but a reflection of the trust and value we offered to our users.
Every decision made and feature developed was geared towards minimizing the percentage of missing transactions. The entire team, regardless of their role, was aligned on the significance of this metric and contributed to its improvement.
This unified approach resulted in innovative solutions that enhanced the reliability and comprehensiveness of our platform, thereby strengthening Intuit's standing in the financial data exchange sector.
Relation to the North Star Metric
Now, let’s think about how the OMTM relates to the North Star Metric.
The North Star Metric is the metric that best captures the core value your product delivers to customers. It’s a leading indicator of your company’s success.
In the above example, the OMTM is percentage of missing transactions, and it serves as the key performance indicator for the product team at Intuit working on financial data exchange platforms. The NSM in this context, would be a comprehensive and reliable view of users' financial transactions, as it reflects the core value that the company aims to deliver.
Here’s a step-by-step breakdown of how the OMTM relates to the NSM in this example:
Step one: Identify core value – The company’s core value is providing users with a comprehensive and reliable view of their financial transactions.
Step two: Select OMTM – The percentage of missing transactions was identified as the OMTM as it reflects the platform's reliability and the trust and value offered to users.
Step three: Align team with OMTM – Every member of the team, regardless of their role, bought into the significance of this metric
Step four: Develop features and make decisions – All decisions made and features developed by the product team were geared towards minimizing the percentage of missing transactions. This unified approach resulted in innovative solutions that enhanced the reliability and comprehensiveness of the platform.
Step five: Achieve North Star Metric – Ultimately, by optimizing the OMTM, the team was able to provide users with a comprehensive and reliable view of their financial transactions, achieving their North Star Metric.
Step six: Strengthen company standing – By achieving its overarching goal of providing users with a comprehensive and reliable view of their financial transactions, the company was able to strengthen its standing in the financial data exchange sector, ultimately fostering growth and continued product success.
Real-life success stories
Dropbox: User engagement
For Dropbox, the journey to becoming a cloud storage giant was paved with a focus on user engagement. Recognizing that the more users engaged with the service, the more likely they were to recommend it to others, Dropbox ingeniously optimized its referral program, incentivizing both the referrer and the referee.
This laser-focused approach resulted in a 60% increase in sign-ups, propelling Dropbox to millions of users and establishing it as a leader in the market.
Slack: Daily active users
Slack, the team collaboration tool, chose daily active users as their OMTM. In a market saturated with communication tools, Slack differentiated itself through superior user experience and functionality. The company meticulously analyzed user behavior and feedback, iterating on the product to make it indispensable to users. The result was a surge in daily active users, establishing Slack as a go-to tool for team collaboration and communication.
Challenges and solutions
Shifting focus: One of the common challenges when implementing OMTM is the temptation to shift focus from one shiny metric to another. This shifting of focus can lead to diluted efforts and a loss of direction. The solution is to regularly reassess the relevance of the current OMTM and reaffirm commitment to it, resisting the allure of other metrics until the product evolves to a stage where a shift is warranted.
Data overload: In today’s digital age, the abundance of data can be overwhelming. The plethora of metrics available can overshadow the OMTM, making it harder to stay focused. The solution is to streamline data collection and analysis processes, ensuring that the OMTM remains at the forefront of decision-making.
Actionable strategies for implementation
As we’ve seen, getting your team focused on the One Metric That Matters can have enormous benefits for both the company and the customers, but how can you make that happen? Here are four strategies to guide you to success:
1. Align with business goals: Your OMTM should be in harmony with your overall business objectives and product strategy.
In my experience at Intuit, ensuring that our OMTM was tightly aligned with our mission of providing reliable financial data was pivotal. This alignment allowed us to make strategic decisions and allocate resources effectively, ensuring that every action taken was a step towards enhancing the reliability and completeness of our financial data exchange platform.
2. Regular review and adjustment: The only constant in business is change. Markets evolve, customer needs shift, and new challenges emerge. It’s essential to regularly review the continued relevance of your OMTM and be ready to adjust it as your product, market, and goals evolve.
At Intuit, we instituted weekly reviews of our OMTM, examining its impact on our platform's performance and assessing whether it continued to reflect our core objectives. This practice ensured that we remained agile, adapting our focus and strategies to align with the ever-changing financial data landscape.
3. Educate and communicate: The importance of the OMTM needs to be understood and embraced by the entire team. Clear communication and education on why this metric matters above others are essential for ensuring alignment and focus across all levels of the organization.
4. Monitor competing metrics: While the focus should be on the OMTM, it’s also essential to keep an eye on other important metrics. Balancing the OMTM with other key performance indicators ensures a holistic approach to product development.
At Intuit, we also monitored metrics such as user acquisition and customer satisfaction to maintain a comprehensive understanding of our platform's overall health.
That’s a wrap
The One Metric That Matters is more than just a metric; it’s a philosophy. It’s about understanding that in a world inundated with data, clarity comes from focus. The stories of Dropbox and Slack illustrate how a clear focus on OMTM can drive unprecedented growth and success.
Identifying and focusing on the right OMTM can be transformative. It aligns efforts, optimizes resources, and serves as a barometer of success. But it’s not a set-and-forget strategy; it requires regular reassessment and realignment as your product and market evolve.
For product marketing managers, the OMTM offers a clear and actionable framework for driving product success. By aligning the OMTM with business goals, staying agile, and leveraging it for strategic decisions, marketers can navigate the sea of data and steer their products towards uncharted territories of success.
The journey to product success is fraught with challenges, but with a clear focus on the One Metric That Matters, the path becomes more navigable. Embrace the OMTM philosophy, and let it guide your product to unparalleled heights.