When you hear the word “metrics”, can you instantly visualize what we’re talking about when it comes to your online marketing and your business? Metrics are simply the measurements that help you determine if you’re reaching your KPIs. More importantly, they are critical to guiding your business decisions.
Without having a firm understanding of your metrics — that is, what they are and how you’re measuring them — you have a weak foundation with which to base all further business decisions on. If you were in trouble, you really wouldn’t know it until it was too late unless your metrics were showing red flags.
Metrics are the key data that you should be measuring at all times.
So, with that being said, do you know your metrics right this second? Without researching things, you should always know these business metrics off the top of your head:
- Revenue Increase Needs
- How many additional customers you need to reach those revenue increase needs.
- The average revenue per customer your business is achieving.
- Close Rates
These four metrics are the foundation for practically every business and they determine the choices you make and the successes you’re able to achieve henceforth. With these numbers, you can extrapolate further statistics based on your individual business numbers, which can then help to give you a better picture for other areas of your sales.
Consider how you make your business decisions. Then consider how you’d do that without having any hard data or metrics about your business today.
Without metrics, you’re basing your decisions off of feelings, hunches, and straight-up guesses.
You can probably guess how things go from here. It’s about as effective as hiring a complete stranger to make corporate decisions without having any prior knowledge of your company. They can look at what they think is happening, but they don’t know where you’re going, what your customers are doing, and what needs to happen to achieve your bigger goals.
Let’s throw a wrench into the system here to jumble things up even further.
Data and metrics are two different things.
Here’s a quick example from DoSomething.org, who posted a video on YouTube in 2011 that garnered almost 2 million views:
[The video] featured some well-known YouTube celebrities, who asked young people to donate their used sports equipment to youth in need. It was twice as popular as any video Dosomething.org had posted to date. Success! Then came the data report: only eight viewers had signed up to donate equipment, and zero actually donated.
Zero donations. From 1.5 million views. Suddenly, it was clear that for DoSomething.org, views did not equal success. In terms of donations, the video was a complete failure.
The data — 1.5 million views — said one thing, but the metrics — zero donation — said another.
The fact of the matter is that all metrics are proxies for what really matters, and while you can’t pick your data, you absolutely must pick your metrics. The best metrics are an accurate representation of the success of your business. What changes is how you look at the data, and by smartly analysing the data is better ways, you can reap the most out of the data you’re handed and make better decisions going forward.
Have you heard of vanity metrics? In the business world, these are like dandelions. They’re pretty to look at, but in the business world, they’re weeds using up resources and undermining the property value. What we’re looking for here are meaningful metrics. And these metrics are only valuable if you can actually manage to them.
There are three key aspects to any good metrics:
- Consistent data
- Quick/easy to collect
- Cheap to obtain
You have to be able to replicate the process and do so within a reasonable (preferably free) budget. And doing it quickly is how you stay on top of changing trends. Data must be readily available and continually updated.
Do you know your metrics?
You tell us: What metrics does your business use?
Mark Thompson is the co-founder of PayKickstart and has been an online Entrepreneur since 2008. Having generated over $20 million dollars, he understands the everyday struggles and challenges that businesses face. Mark has made it his life’s mission, to help Entrepreneurs grow, scale and automate their businesses using the PayKickstart platform.