You’re Looking at the Wrong Part of the Funnel

Part 3 of a Series: From Messy Problems to Clear Definitions

When the Problem Isn’t Where You Think

Most teams don’t struggle to find problems. They struggle to find where those problems actually happen.

In the previous article, we explored how KPIs can be misleading when taken at face value. A single number, like “sales,” often hides multiple drivers, and breaking it down helps us understand where the problem sits. That already brings a level of clarity.

But in many real-world situations, even that is not enough.

Because sometimes the issue is not just about what is changing. It is about where in the journey things are breaking.

A Familiar Situation

Let’s return to a common scenario. Sales are down.

In Article 2, we worked through this and arrived at a more precise understanding. Instead of treating it as a broad issue, we narrowed it down to something specific, such as a decline in new customer sales for a particular product through an online channel over a defined period.

That is already a well-defined problem.

But it still leaves an important question unanswered. Where exactly is the breakdown happening?

Are fewer people finding the product? Are visitors not converting into customers? Or are customers simply not returning after their first purchase?

This is usually where teams start debating solutions, before they have agreed on where the problem actually sits.

At this stage, the problem is clear, but the path to solving it is not.

Performance doesn’t drop everywhere. It breaks at specific points in the journey.

Introducing Pirate Metrics (AARRR)

This is where Pirate Metrics becomes useful. Often referred to as AARRR, it breaks the customer journey into five simple stages: acquisition, activation, revenue, retention, and referral.

What makes this framework powerful is not its structure, but the shift in thinking it creates. Instead of viewing performance as a single outcome, it encourages you to see it as a sequence of steps, each with its own behaviour and potential failure points.

That shift matters, because most business problems do not affect the entire journey equally. They appear at specific stages.

Why This Matters

Many teams focus heavily on outcomes. Revenue, sales, and conversion rates are tracked closely, and when these numbers move, attention follows. But outcomes are the result of a sequence of events, not a single action.

Outcomes are easy to measure. Breakdowns are harder to see.

When something goes wrong, it rarely goes wrong everywhere at once. Instead, it shows up at a particular stage.

You might have strong traffic but weak conversion, or strong initial purchases but poor retention. In some cases, customers may be engaging but not recommending the product to others. Each of these scenarios produces a similar outcome, but they are fundamentally different problems.

If you only look at the final number, all of them look the same.

How It Works in Practice

Returning to our earlier example, sales from new customers through online channels are down. Using Pirate Metrics, we break this into stages and examine each one.

We start with acquisition. Are fewer people visiting the site? If traffic is stable, we move to activation. Are visitors failing to complete their first purchase? If conversion is the issue, we can focus there instead of analysing everything else.

As we go through this process, the problem begins to localise again. Instead of asking a broad question about declining sales, we begin to identify a specific breakdown point.

At this point, something shifts.

You are no longer analysing data. You are analysing where the journey breaks.

And that changes everything.

The problem is not the outcome. It is where the journey breaks.

Why This Changes the Way You Analyse

Once you think in terms of stages, your approach to analysis becomes more focused. Instead of trying to explain a general outcome, you begin by identifying where change is happening. This reduces noise, prevents unnecessary exploration, and directs effort to where it matters most.

More importantly, it changes the questions you ask. Instead of asking what is happening to sales, you begin to ask where exactly the drop is occurring. That shift may seem small, but it has a significant impact on how quickly you arrive at useful insights.

A Common Mistake to Avoid

A common mistake at this stage is to analyse all parts of the journey at once. This often leads to an overwhelming number of metrics, dashboards, and possible explanations, without a clear sense of direction.

The purpose of Pirate Metrics is not to expand your analysis, but to focus it. It helps you identify the stage that matters most, so your effort is directed where it has the greatest impact.

Connecting Back to the Bigger Picture

In Article 1, we introduced the idea of moving from messy problems to clear problem definitions. In Article 2, we used the KPI Dimension Map to understand where the problem sits within a metric.

Pirate Metrics builds on this by helping us understand where in the journey the problem occurs.

Together, they form a progression:

• KPI Dimension Map helps you understand where in the data

• Pirate Metrics helps you understand where in the journey

  
  

Where This Doesn’t Go Far Enough

It is important to recognise the limits of this approach. Pirate Metrics helps identify the stage where performance is breaking, but it does not explain why the breakdown is happening.

That still requires deeper investigation.

However, without first identifying the correct stage, that investigation is often misdirected.

Where We Go Next

So far, we have focused on understanding and defining the problem more clearly, first through structuring messy situations, then by breaking down KPIs, and now by identifying where breakdowns occur in a journey.

The next step shifts our focus.

It is no longer about understanding the problem, but about ensuring that what we build actually addresses it.

In the next article, we will look at the Data Team Lean Canvas, and how it helps align data work with real business needs.

Closing Thought

Outcomes tell you something changed. Journeys tell you where to act.