Metric Definition Framework
A metric definition is complete only when it can answer all of the questions below unambiguously. Use this framework as an interview guide when gathering inputs from data owners.
The 7 Questions Every Metric Definition Must Answer
1. What is it? (Plain-English definition)
One sentence a non-technical stakeholder can read and immediately understand.
Bad: "MRR is the sum of MRR."
Good: "Monthly Recurring Revenue (MRR) is the predictable revenue generated each month from active subscriptions, excluding one-time fees and refunds."
2. How is it calculated? (Calculation logic)
Provide the SQL, formula, or numbered plain-English steps.
-- MRR example
SELECT
DATE_TRUNC('month', billing_date) AS month,
SUM(subscription_amount) AS mrr
FROM subscriptions
WHERE status = 'active'
AND billing_frequency = 'monthly'
GROUP BY 1For derived metrics (e.g. MoM growth rate), show how it builds on a base metric:
MoM Growth Rate = (MRR_this_month - MRR_last_month) / MRR_last_month3. What is the grain? (One row = what?)
Clearly state the level of aggregation the metric is reported at.
"One row per account per month" — not "one row per event."
4. What is included / excluded?
List explicit inclusions and exclusions that are not obvious from the SQL alone.
| Include | Exclude |
|---|---|
| Monthly subscriptions | Annual subscriptions |
| Active status | Trial, churned, paused |
| Base subscription fee | Add-ons, overages, refunds |
5. What are the known edge cases?
Document any business rules that required special handling.
Examples:
- Upgraded subscriptions are counted at the new price from the upgrade date, not pro-rated
- Accounts with payment failures but not yet churned are included until 30 DPD
- Multi-currency: converted to USD using the exchange rate on the billing date
6. Who uses it and for what decision?
Name the consumer (person, team, dashboard) and the decision they use this metric to make.
"Used by the CFO and Revenue Operations team in the monthly board deck to assess subscription revenue health and inform hiring decisions."
7. What does "good" look like?
Provide a business benchmark or target range, if known.
"Healthy: > $2M / month. Alert threshold: < $1.5M (triggers exec review). Current YoY growth target: 40%."
Metric Types
| Type | Definition | Example |
|---|---|---|
| Simple | Direct aggregate of a single measure | Total orders |
| Ratio | Numerator ÷ denominator (both aggregates) | Conversion rate = paid / visited |
| Cumulative | Running total from a start date | Cumulative revenue since launch |
| Derived | Arithmetic on other defined metrics | Net Revenue Retention = (Starting MRR + Expansion − Churn) / Starting MRR |
Common Metric Anti-Patterns to Avoid
- Undefined scope: "Active users" without specifying what "active" means (login? purchase? any event?)
- Ambiguous time attribution: when a subscription started vs. when it billed vs. when revenue is recognised
- Double-counting: joining non-unique tables without aggregating first
- Hardcoded business rules in SQL: status = 'active' without documenting what other status values mean
- Missing denominator definition: "Conversion rate" without specifying the denominator population