The Edge

Why You're Using the Wrong Metrics and What to Track Instead

Written by Meghan Krause | June 8, 2023

You’ve got a dashboard. Maybe a dozen.

But do they actually change the way decisions are made in your business?

At Krause Analytics, we see the same story play out time and again: teams are flooded with reports but without anything truly actionable. Most aren’t struggling with a lack of data or tools—it’s a disconnect between what’s being measured and what actually drives results.

And let’s be honest, flashy dashboards don’t pay the bills.

The Problem with Vanity Metrics

Most dashboards start with good intentions: track revenue, monitor churn, surface KPIs. But topline metrics often mask bottom-line inefficiencies.

One client thought they were growing incredibly—until we uncovered hidden cost centers that, once addressed, boosted profitability by 112%. Another reduced annual product costs by $100K by analyzing unit-level margin data.

The lesson? Measuring what’s easy doesn’t always reveal what’s useful.

 

Make Your Metrics Work Harder

Below are some of the core metrics we help our clients operationalize—plus ways to level them up from informative to actionable.

Profit & Margins

Your surplus (or profit) is what remains after expenses.

  • Gross Profit focuses on the direct costs of delivering your product or service.

  • Net Profit includes everything—rent, salaries, tech stack, overhead.

  • Margins show each as a percentage of revenue, and can help you compare across teams, products, or time periods.

Make it actionable:

Look at gross and net side-by-side. Strong gross margins but weak net? You might have bloated overhead. Low gross? You may need to rethink pricing or reduce execution costs. Margins are often where high-growth orgs lose track of sustainability.

Collections & Realized Revenue

While most leaders are focused on growing revenue, actually realizing that revenue gets overlooked more than you'd think. What’s it all for if the cash never lands?

Often lacking context, A/R aging reports have a knack for becoming little more than a "Hall of Fame" for late payers.

What we like better:

  • Collections Effectiveness Index (CEI): Measures how much of your outstanding receivables or pledges convert into real dollars. A CEI below 100% means money is getting stuck.

Make it actionable:

Look at CEI by segment to pinpoint where and why revenue is being delayed. Ask yourself:

  • Are we providing payment options that align with customer preferences?

  • Do failed payments trigger automated recovery workflows?

  • Are chronic late payers hurting cash flow more than they’re worth?

Efficiency Multiple

Your efficiency multiple compares what you spend to the outcomes it produces—whether that’s revenue growth, donation lift, or another KPI. It’s a cash-efficiency lens used in both startups and nonprofits alike. A lower multiple means your cash stretches further and your growth is more sustainable. 

Make it actionable:

Track your efficiency over time and across efforts. Use it to:

  • Prioritize the highest-performing initiatives

  • Flag areas of spend that aren't delivering

  • Balance ambition during growth cycles

It’s particularly useful during budgeting, board reporting, and fundraising conversations.

Acquisition

Customer Acquisition Cost (CAC) tells you what it costs to bring in new customers. But CAC without context can be misleading. Would you rather spend $100 to acquire someone who sticks around for years, or $25 for a one-and-done buyer?

What we like better:

  • CAC Payback Period: How long it takes to recoup your spend. The shorter, the better.

  • LTV:CAC Ratio: Compares lifetime value to acquisition cost.

 

Make it actionable:

Segment by customer type or channel to understand which audiences drive the highest return. A short payback and strong LTV:CAC tell you where to double down. Segments with weak ratios may not be worth the resources to target and retain.

Retention & Reactivation

Churn Rate is common and easy to calculate—but it often lacks depth. Losing a low-value customer doesn’t hurt as much as losing a high-LTV one.

What we like better:

  • Net Revenue Retention (NRR): Measures how much revenue you retain and expand from existing customers. Break it into retention, expansion, contraction, and churn to see where to act.

  • Reactivation Rate: Tracks how many lapsed customers return. Typically cheaper and faster to win back than to acquire a new customer.

Make it actionable:

Build customer segments around retention and reactivation signals. Identify the behaviors or lifecycle stages that correlate with expansion, churn, and reactivation to design campaigns accordingly.

What Happens When You Get It Right

When your metrics reflect how your business actually works, you unlock results. Here’s what our clients have achieved:

  • 172% increase in bottom-line growth by focusing on the right financial levers

  • $1.02M in recovered revenue by exposing hidden shortages and inefficiencies

  • 87% faster delivery time by tracking the right process metrics and eliminating friction

The Bottom Line

Metrics that don’t drive action are just noise. The right ones? They’re levers for growth, profitability, and smarter decision-making.

If your dashboards aren't delivering clarity or outcomes, you're not alone—but it is time to fix it.