Monday, February 21, 2005

Metrics That Matter

Public radio loves its metrics. We've got more numbers than we know what to do with and they are frequently in contradiction with one another. So how does one go about deciding which numbers matter? It’s simple. Develop a strategy.

Metrics without strategy are meaningless. You first have to decide a direction and then figure out how you’re going to get there. That requires two types of metrics – “Ends” and “Means.”

"Ends" metrics are the most important. They represent real, annual goals like hours of listening or net revenue. It is what you strive for. They are goals that are completely under your control. They aren't percentages such as audience shares or ratings, which can change for reasons outside of your control.

"Ends" metrics answer questions such as, "Are we providing more service than last year?" and "Are we more self-sufficient than last year?" One could, in fact, stop the list of metrics that matter right there -- providing more service and being more capable of sustaining that service without subsidies. But that’s another discussion.

All the other statistics we use in public radio are means towards those ends. These "Means" metrics include Loyalty, Time Spent Listening, Donor Retention Rate, Pledge Drive Revenue, and others. They are important metrics that can help a station meet its end goals. But alone, they do not measure success.

Then there are numbers such as Share, Audience Composition, and Average Pledge Drive Gift. These are about the worst numbers public radio can use as measures of success.

The problem with Share is that half of the equation—the Persons Using Radio half—is outside of the station’s control. That makes it a poor choice for goal-setting. For example, a station can maintain Share while losing audience. That happens when overall radio listening drops. Maintaining Share in that situation is akin to going down with a sinking ship. Not exactly a success story. The opposite happens as well. Stations get more listening, but listening in the market overall is up. Share stays the same, or drops. So even though more listening occured, the station looks less successful.

The problem with Audience Composition was addressed in the “Cosmetrics” posting a while back. To summarize, it’s at the bottom of the barrel in terms of audience success metrics. That’s because percentages can change for the wrong reasons. Average Pledge Drive Gift has the same weakness. It can go up by driving away potential contributors. It can be forced higher by raising less money through the mail.

So if you want to start making sense of all of the numbers that are being thrown your way, pick two or three measurable goals that represent true improvement for your fiscal year. Then the find one or two critical numbers that help explain what it takes to meet those goals. Pretty soon, it’ll all start to make sense.

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