Metodologías para el Seguimiento de KPIs

The KPI pyramid methodology is a fundamental tool for any digital business looking to measure its performance effectively. This hierarchical structure allows you to not only identify which metrics are really important, but also to understand how they relate to each other to drive business growth. Mastering this methodology will allow you to make data-driven decisions that really impact the results of your digital product.

What is the KPI pyramid and why is it important?

The KPI pyramid is a structured methodology that organizes metrics into three hierarchical levels, allowing you to clearly visualize how operational metrics impact bottom-line business results. This structure facilitates prioritization and focus on what really matters.

The pyramid is composed of three levels:

1. North Star Metric (at the top): the most important metric that defines business success.
2. Impact KPIs (middle level): Metrics that directly influence the North Star.
3. Operational KPIs (base): Metrics that affect the impact KPIs and are more actionable on a day-to-day basis.

This structure allows you to understand the cause-effect relationships between different metrics, making it easier to identify areas of improvement that will really impact the bottom line of the business.

How to identify your North Star Metric?

The North Star is the most important metric for your business and must meet three fundamental characteristics:

• Be easy to understand and communicate: Any team member should be able to understand it without complex explanations.
• Be directly associated with the business: It should reflect the core value offered by your product or service.
• Measure long-term growth: It should not be a short-term metric, but a sustainable indicator of business success.

To identify it correctly, you should ask yourself: Which metric is more directly linked to the core of my business? Which one best reflects the main objective of my application or service?

In the case of SaborApp (a food ordering app), the retention rate was identified as the North Star, since the main goal is to get users to buy lunches every day, turning the use of the app into a habit.

How to structure the different levels of KPIs?

Once the North Star Metric is identified, it is necessary to determine which other metrics impact it and how they relate to each other.

Impact KPIs

These KPIs have a direct influence on your North Star. They are metrics that, when improved, will have a positive effect on your main metric. To identify them, ask yourself: What factors directly influence my North Star?

In the case of SaborApp, two impact KPIs were identified:

• Time on task: The time it takes a user to complete an order directly affects retention. If the process is quick, users will be more likely to return.
• CSAT (Customer Satisfaction): Customersatisfaction is a determining factor for retention.

Operational KPIs

These are the most basic and actionable indicators that affect the impact KPIs. They are metrics that you can directly optimize through product or process changes.

For SaborApp, three operational KPIs were identified:

• Error rate: errors in the application affect both CSAT and time on task.
• Abandonment rate: If users abandon the checkout process, this negatively impacts time-on-task.
• Conversion rate: Although it could be considered an impact KPI, it was determined to be more appropriately classified as operational, as it affects both time-on-task and CSAT.

How to apply the KPI pyramid in your business?

To implement this methodology in your own business, follow these steps:

1. Identify your North Star Metric: Determine which is the most important metric that reflects the long-term success of your business.
2. Define your impact KPIs: Identify which metrics directly influence your North Star.
3. Establish your operational KPIs: Determine which more basic and actionable metrics affect your impact KPIs.
4. Analyze relationships: Make sure there is a clear relationship between the different levels of the pyramid.
5. Review and adjust: The KPI pyramid is not static; periodically review and adjust it as your business evolves.

Remember that the ultimate goal is to have a clear structure that allows you to understand how day-to-day operational actions impact the overall success of your business.

The KPI pyramid is a powerful tool for any digital business looking to measure its performance effectively. By implementing this methodology, you will be able to prioritize your efforts and resources in those areas that will really impact the success of your business. Have you used a similar methodology to organize your KPIs? Share your experience in the comments.