Using Metrics to Create a Competitive Advantage

October 29, 2010

I’m typically talking about cloud computing trends or recent infrastructure investments within the technology market. I ran across an article recently that is aligned with OpenView’s thinking when designing a strategy for scaling a business (check out OpenView’s Managing Director, Scott Maxwell’s recent blog on SaaS metrics for more information: Scott)
The Wall Street Journal reported an article on the online grocery delivery service Fresh Direct and their new CEO’s management approach to using metrics to cut down on customer churn and increase loyalty. Measuring key metrics is something which OpenView spends a lot of time focusing on and implementing for our portfolio companies, thus it’s easy to relate.

Since 2005, Fresh Direct appointed three CEOs and while their customer churn accelerated throughout their tenures, it seems they never thought to measure key data for delivery tracking, orders completed on time, and complaints. In 2008, Rick Braddock took the reins as CEO and forced his company to focus on how to stop losing so many customers instead of how to gain new ones. The methods behind his methodology involved focusing on thirty service metrics with effort to minimize complaints and also deliver orders faster. When the company finally began tracking, their deliveries were on time only 80% to 92% of the time. Fast forward to today — more than 97% of deliveries are on time. Furthermore, the company has made progress in reducing complaints, returns and wrong items. WSJ Article
A majority of OpenView Venture Partner’s investments utilize the senior advisors and operational experts within the OpenView Labs portion of the firm (Labs) to help scale their business; whether product development, go to market strategies or general recruiting. Measuring key metrics (Marketing KPIs for instance) and digesting data in an effort to identify and improve underperforming parts of a business is a significant component of how OpenView and OpenView Labs can help.


Peter Zotto is the GM at <a href="">Price Intelligently</a>. Previously he was an analyst at OpenView where he helped to identify qualified investment opportunities.