Ecom CFO Notebook - the issue with KPIs

Welcome to this issue of Ecom CFO Notebook – a weekly letter for 7–9 figure ecommerce founders and CFOs, sharing my perspective and stories for profitable growth.

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Sam here.

This week, we're rounding out our operations series by talking about something that keeps coming up in client conversations.

KPIs.

We're all drowning in dashboards. Beautiful ones. Color-coded metrics, real-time updates, slick BI tools that cost more than most people's cars.

But here's what I keep hearing: "I have all this data, but I still don't know what to do."

I get it. We convince ourselves that if we just had one more breakdown, one more chart, the right answer would jump out at us. But it never does.

Recently on the Merchant Spring podcast, I mentioned seeing brands with 60 KPIs where nobody knows what half of them mean or what to do with them. The host asked me what I thought was driving this.

Here's what I told him: There's always temptation to add a tool when what you really need is to ask better questions and make hard decisions.

We're treating symptoms, not the disease

I've watched this pattern play out dozens of times. Founder feels stuck on a business decision. Team suggests a dashboard upgrade. Everyone thinks better visibility equals better choices.

They bring in a $30,000 BI tool thinking it'll help. But it just gives them prettier versions of the same confusion.

The real problem isn't lack of data. It's lack of clarity on what we're actually trying to decide.

I see companies tracking customer acquisition costs across 47 different segments. Facebook iOS vs Android. Google broad match vs exact match. TikTok video vs image ads. The data is perfect.

But they can't decide whether to pause underperforming campaigns because they're afraid of losing scale. And they can't decide what "underperforming" even means because they haven't defined their actual thresholds.

The dashboard didn't fix their strategy gap. It just made it look more professional.

What I've learned about decision-first thinking

Running our own firm, I've caught myself in this trap too. We have dashboards for everything - client metrics, team utilization, pipeline data. All useful stuff.

But the times I've made our best business decisions weren't when I was staring at charts. They were when I got clear on what I was actually trying to choose between.

Should we raise prices? The answer isn't in a dashboard showing our current pricing spread. It's in deciding what kind of business we want to be and what our time is worth.

Should we expand our service offering? The data on current services is helpful, but the real question is strategic: Do we want to go deeper with fewer clients or broader with more?

I'd rather see a founder tracking 5 numbers they actually act on than a whole team obsessing over a dashboard they don't use.

Start with the decision, then find the data

Here's what's worked better for me and our clients:

List the 2-3 biggest decisions you need to make this quarter (hint, they should be related to your rocks). Then ask: what specific data would help me make these calls?

Nothing else matters until those decisions get made.

Example: You're deciding whether to launch wholesale. You don't need to track email open rates or social media engagement. You need wholesale margin after fulfillment costs, minimum order requirements, and working capital impact.

Track those 3 numbers. Ignore everything else until you make the call.

This ties back to the rocks framework I wrote about a few weeks ago. If inventory optimization is your rock for the quarter, you don't need 15 inventory metrics. You need inventory turnover, stockout frequency, and cash tied up. That's it.

One weekly check-in. Five numbers max. Simple question: Are these moving in the right direction? If not, what are we going to do about it?

To me it comes down to consistency.

We don't have to track every metric perfectly. It’s just about picking something and sticking with it. It’s so easy to analysis paralysis ourselves to death, but we’re more often than not going to get to the same place regardless of which comparison period is chosen.

The magic isn't in finding the perfect KPI framework. It's in picking a few core metrics and reviewing them consistently. Week after week. Month after month.

That's it. No fancy BI tool required.

Next week, we're sharing the results of our Q2 2025 benchmark report. Spoiler: as we’ve seen before, revenue growth doesn't always mean your margins are improving.

— Sam

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