Why most businesses are still obsessed with the wrong metrics

The 2025 look back...

Right, here's that post about metrics I promised last week – the one that's been costing businesses money for over a decade. I originally wrote this back in July 2012, based on the first edition of Watertight Marketing (which I was actually writing in 2010!).

My worry then was that businesses were becoming slaves to ROI calculations at the expense of everything that actually builds lasting value. And more than a decade later? I'm still banging on about it. Because it's gotten exponentially worse.

What I was going on about in 2012

Around this time, I coined the phrase "mindful marketing measurement" – the idea that how you measure directly affects the decisions you make, and you need to be conscious of that relationship.

My core worry was simple: businesses were using ROI as their primary metric, which naturally led them to constantly reduce spending. Less cost + same revenue = better ROI, right?

I used Apple's beautiful packaging as an example. How a simple ROI analysis might suggest cutting their "Lovingly packed in California" approach, but that attention to detail was exactly what built the brand that justified their premium pricing.

My message was straightforward: If you can't draw a direct line from the metric to the next action that signals buying intent, you're measuring the wrong thing.

It wasn't about immediate revenue – that was the mistake most businesses made. It was about progression. Are people moving forward in their buying journey? Are they taking the next step that shows genuine interest? Because if you've got those steps well covered, revenue naturally follows.

The danger was becoming so focused on short-term ROI that you'd "drill holes in the sides of your own bucket."

Why I was right (and why it got exponentially worse)

The fundamental problem hasn't changed. Businesses still confuse efficiency metrics with effectiveness metrics. They optimise what's easy to optimise rather than what actually builds long-term value.

But the scale of optimisation has exploded. In 2012, I was worried about cutting packaging costs. Now businesses are optimising every single customer touchpoint based on immediate conversion data, often destroying the very experiences that create loyalty.

Short-termism became algorithmic. What used to be quarterly pressure to improve ROI has become real-time pressure to improve every metric, every day. Many larger marketing teams now optimise campaigns hourly based on performance data.

The Apple example became prophetic. Remember when I worried someone might suggest Apple cut their beautiful packaging? Well, welcome to 2025, where businesses A/B test everything – including removing "unnecessary" elements from customer experiences – and often choose the option that converts better immediately, regardless of long-term brand impact.

What I got spectacularly right

This became a cornerstone of Watertight Marketing. The concept of mindful measurement was and is one of the key principles in the Watertight Marketing book. It's still bang on. If anything, it's become more critical as businesses drown in data they can act on but don't know if they should.

Time-lag awareness was critical. My point about there being "usually a time-lag to knowing the real market response" has become a defining challenge of modern marketing. We have more real-time data than ever, but understanding long-term impact is harder than it was in 2012.

Quality degradation is invisible until it's not. The warning about "incremental reductions in spend" adding up to "overall degradation in quality" has played out exactly as predicted. Businesses optimise themselves into mediocrity one small cut at a time.

Measurement shapes behaviour. The core insight that "the way you measure your marketing can have a direct effect on the decisions you make" is more relevant than ever. This principle runs through everything in the Watertight methodology – what you measure determines what you optimise, and what you optimise determines your long-term success.

Values need protection. The advice to "establish your quality standards, and stick to them" sounds almost radical in 2025's hyper-optimised world. But it's exactly what separates truly sustainable businesses from those that optimise themselves into irrelevance.

What looks adorably naive now

Assuming humans would stay in control. I thought business leaders would make conscious decisions about what to protect from cost-cutting. Now algorithms make thousands of optimisation decisions without any human oversight. Ask: Is this a good thing?

Underestimating the speed of change. I talked about quarterly ROI reviews. Now businesses get performance alerts every few minutes and feel pressure to respond immediately. Ask: How often is too often to change things?

Thinking ROI was the only dangerous metric. ROI was just the beginning. Now we have engagement rates, conversion rates, cost per acquisition, lifetime value ratios, and dozens of other metrics that can all drive equally short-sighted decisions if used without context.

Still true!

The questions that actually matter in 2025

Instead of asking "What's our ROI?" ask:

• What decision are we trying to make? Start with the decision, then find the data that informs it. Not the other way around.

• What would we do differently if this number changed? If the answer is "nothing," stop measuring it.

• Can we trace this metric to the next buying signal within 30 days? If not, it might be interesting but it's probably not actionable for improving your customer journey.

• Are we measuring inputs, outputs, or outcomes? Most businesses measure inputs (emails sent) or outputs (emails opened). Winners measure outcomes (progression through buying journey).

• Would a smart 12-year-old understand why this matters? If you can't explain why a metric matters in simple terms, you probably don't know either.

The uncomfortable truth about measurement in 2025

Here's what I've learned after 15+ years of watching businesses struggle with "mindful measurement":

The problem in marketing is that we're measuring too much, too often, with too little context.

The Apple packaging example I used in 2012? Most businesses today would A/B test removing it, see a short-term cost saving with no immediate revenue impact, and eliminate it. They'd never discover that it was the packaging experience that made customers willing to pay premium prices and recommend the product to friends.

We've become so sophisticated at measuring everything that we've lost the wisdom to know what not to measure.

The companies winning in 2025 measure fewer things, but they measure the right things consistently over the right time periods. They've learned that the best metric is often the one that stops you from making a decision too quickly.

Your mindful measurement reality check

Here's my challenge: Look at your current metrics dashboard.

For each metric you're tracking, ask:

• How quickly are you expected to respond to changes in this number?

• What's the minimum time period needed to know if this metric is genuinely improving or declining?

• What would you stop doing if this number got worse?

• What would you never stop doing regardless of what this number shows?

If you can't answer those questions clearly, you're probably not practising mindful measurement – you're just collecting data.

Because here's what hasn't changed since 2012: Great businesses are built on consistent value delivery over time, not optimised metrics in the moment.

The best measurement framework doesn't make you faster – it makes you wiser.

And wisdom, thirteen years on from this post (and 25+ years in business), is still the scarcest resource in business.

What have you protected from the optimisation pressure in your business? Drop a comment and tell me about a decision you made to stick with long-term value over short-term metrics.

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Also coming in September: My '101 Ways Your Customers Are Like Cats' minibook! Join the waiting list for first access and to play with the Feline Philosophy Finder – because understanding your customers shouldn't be harder than understanding why cats knock things off tables. Get on the waiting list here.

Next week: I'm diving into that 2012 blog post about using blogs for sales that shows how content strategy has evolved...