Metrics for Design Thinking
Measuring Performance
Every bit of work and every penny invested are for nothing if you aren’t measuring their return. It’s a core tenet of operating a profitable, successful business. The same rule applies for design thinking initiatives: you must measure.
Metrics—the measurements by which you gauge an initiative’s success or failure (or other characteristics)—need to be one of your best friends, yet they are hard to get to know. They can seem aloof, elusive, oppositional, and secretive. In reality, they are eager to be transparent and give you everything they have.
As business owners and entrepreneurs, we face two distinct challenges when it comes to metrics: identifying the relevant ones and taking the time to measure them over multiple periods. That’s just for the metrics of the processes with which we are familiar. Introduce design thinking into the mix—new approaches to problem solving with which you may not be familiar—and you might think you need a whole new set of metrics.
This is not necessarily the case.
Many of the ways you normally measure progress can also be used to measure design thinking–based initiatives: foot traffic, inquiries, sales, referrals, impressions, click-throughs, content subscriptions, page views, follows and likes, satisfaction ratings, and churn. All of these measurements are applicable depending on the circumstance.
Relevant Metrics
Following is a brief reference guide to use in helping you and your leadership team determine what measurement to use when.
Uniquely relevant for retailers and public spaces, such as libraries and parks, foot traffic is measured by simply counting the number of individuals who enter your space within a specified timeframe. Measuring foot traffic is as easy—and as boring as—standing by a door and using a hand-held tally counter. If your marketing plan is designed to increase the number of visitors to your store, measuring foot traffic will give you insight into the plan’s success.
Prompting a customer to inquire about additional information is a call-to-action tactic often used by businesses with a long sales process or complex products. Inquiries are also a means of gauging a customer’s level of interest in a product or service. You can measure inquiries by tracking the mechanism you created for generating them in your call to action, for example, phone calls, emails, coupons redeemed, and so on.
This is likely the most popular measurement and one of the easiest to track. However, sales are not always an accurate reflection of an initiative’s success. Many other factors can affect sales: availability of inventory, cost, employee interaction, fulfillment, and so on. Although sales are generally considered the ultimate measure of success, that metric should never be the only measure.
New customers referred by current ones or by vendors—customers who come to you via word of mouth—are highly desirable by any business. To measure referrals through customer interaction, whether in person or on the phone, you can simply ask the customer how he or she heard about your business. Customer referrals through the Internet can be tracked using web analytics (see Appendix C for a definition).
Measuring impressions is often referred to as “counting eyeballs,” because one impression is equivalent to one person seeing one piece of communication (advertisement, web page, billboard, and so on) one time. Marketing communication is almost exclusively measured by impressions. Impressions can be measured in several ways. Print media measures impressions based on circulation and distribution counts. Broadcast media measures impressions based on data reported by listeners or viewers through services such as Nielsen. Impressions for online media are measured by unique IP addresses.
Click-Throughs
This is a means of measuring web-based communication specifically. A click-through is the action someone takes when they click on an advertisement or a link embedded in one piece of communication that takes the reader to another piece of communication, for example, a link from a retailer’s e-newsletter to the retailer’s product page.
A click-through is occasionally followed by an opportunity to subscribe to a company’s newsletter. If one of your goals is to increase your database of customers and potential customers to whom you can communicate regularly, use this metric.
Page Views
A click-through can also be followed by a page view. A page view is a specific type of impression, measured by tracking unique IP addresses. It is the equivalent of one person viewing one page on your website one time. Page views are a common metric for measuring a website’s traffic.
Follows and Likes
In the realm of social media, “follows” and “likes” are the primary means of measuring customer engagement. On Facebook, users “like” businesses. On Twitter, Instagram, Pinterest, and similar platforms, users “follow” businesses.
Satisfaction Ratings
Rating satisfaction with a business, whether among employees or customers, is a common practice. The rub is that this metric requires a baseline to measure against, so satisfaction must be measured twice before results can be meaningful. The most common means of measurement are surveys, which can be delivered online, via phone, or through the regular mail, and customer comment forms.
Churn
This has nothing to do with butter. Churn, also called churn rate or attrition rate, refers to the rate at which a business loses customers. Churn is measured during a defined timeframe, and although it is a metric most commonly used by subscription-based business models, like mobile phones and magazines, it can be relevant to any business sector that tracks the purchase history and behavior of its customers. If the life cycle of your product or service is three months, and a customer hasn’t made a repeat purchase within nine months of his or her initial purchase, you’ve probably lost that customer.
When to Measure Performance
Many clients have asked me when they should measure performance. My pat answer is “Always.” In all seriousness, keeping your finger on the pulse of your business by measuring relevant metrics regularly is good business. Getting into the habit will help you identify potential challenges and opportunities while they are still on the horizon so you can prepare for their arrival.
If measuring performance is new for you, select relevant metrics that you can measure at a frequency that will be not only meaningful but also feasible. Some business sectors benefit from daily or evenly hourly measuring, others suffice with monthly or quarterly measurements. At the absolute minimum, take measurements of relevant metrics at least annually, which could be at the end or beginning of your fiscal year, or on your business anniversary date . . . essentially any date that makes sense for you.
From a design thinking point of view, I firmly believe that regardless of your ongoing measurements, you also need to measure before and after any design thinking initiative. It’s logical and necessary if you want to gauge results accurately. For example, if you are going to redesign your store to increase foot traffic, you should measure that foot traffic prior to the redesign. Also measure the foot traffic afterward at three regular intervals so that you have an average foot traffic count, which you can then compare to the result you obtained before the redesign.
Measurement and the Iterative Nature of Design Thinking
By its very nature design thinking is an iterative process that perfectly illustrates the saying, “If at first you don’t succeed, try, try again.” Hence, design thinking includes prototyping and testing as critical steps in the process. Those of us who use design thinking in our businesses know that rarely (f ever) will we get it right the first time, regardless of what “it” is. There is and always will be room for improvement, so we prototype and test as many times as necessary to get the results we want. Therein lies the core reason that measurement is hugely important not only in business but also in design thinking. Knowing the results of our efforts aids us in making adjustments quickly so we can try again, and again, until we get it right.