I have some of the smartest clients in the world. Yes. Seriously. These are people who are completely brilliant at what they do- they are often very well known, and have communities numbering in the thousands. Yet, even these very well known brilliant people have questions about what business metrics are most important.
Actually, more honestly, they have questions about why metrics are important at all. To my way of thinking, if something in your business isn’t measured, it’s not sustainable. Too many people build their businesses on hopes, wings, and prayers- guessing or intuiting how or where to invest more time, energy, and money.
The reality is that if you’re tracking well and keeping good metrics, your business will speak to you. It will tell you exactly what it needs more of- and what it doesn’t.
The second point of resistance is often around the idea that tracking and measuring isn’t sexy.
And that’s true. Tracking and measuring isn’t nearly as fun as posting a fun update on Facebook, or being retweeted by your adoring followers on Twitter. But as I already said, if you’re not tracking or measuring, your current level of success is not sustainable.
The third point of resistance is often around the idea of not knowing what to measure.
And while there are points at which too much measurement and tracking can become ridiculous, not useful, and just downright burdensome- most businesses are no where near this limit.
At minimum, there are several statistics you should be tracking in your business:
1) Where your clients are coming from
This is equivalent to “how did you hear of us?”- and you want to find this out from every potential client who contacts you. Knowing this can help guide your decisions of where to invest more of your marketing time and effort. If, for instance, the bulk of your contacts are coming from referrals, you will want to spend more resources there. If, on the other hand, more of your contacts are coming from search engines and good search engine placement, you’ll want to spent more resources there.
2) How much traffic/how many opportunities you’re getting
Since I work primarily with online businesses as a consultant around small business marketing, I always want to know how much traffic my client’s website is getting, as well as what methods they are using to generate traffic. While paid traffic has it’s place, I think the best way to build a solid business is to also get high organic search engine rankings too. The idea of opportunities results from traffic- the more people who see your message, the greater the likelihood that people will inquire about your services.
3) The business conversion path and conversion rate
This refers to how many people are becoming clients. Most businesses don’t keep track of this at all, and of those who do, they don’t do it thoroughly. A complete conversion path will document what actions the client took to move from being interested in the service or product to purchasing the service or product. When you have a clear conversion path, and a strong conversion rate, you can better profit from the traffic and opportunities you are getting.
4) The size of your business database
Online, this might be measured in terms of your email list size. The idea is that the greater number of potential clients you have access to, the better. So you need to be focused on building your prospect list at every opportunity. You can do this by offering a valuable informational product, or a trial offer in exchange for someone’s email address. If you can’t get someone to buy right away, the next best thing is to get them into your mailing system for ongoing followups.
There are several other metrics you might want to measure, but measuring these will give you a strong foundation.
I suggest you monitor these at least once a month if you are comfortably busy, every two weeks if you could use more business. The more data you collect and examine, the more profitable your business can be.
It’s just dollars and sense.