Do you know what you should measure in your business? Which metrics are worth tracking and the importance of data based decision making.
What your KPIs (Key Performance Indicators) are?
Is it… FB likes? Retweets? Traffic to your website? Open rates? Click throughs?
Maybe. Maybe not.
The thing is, not all of those things necessarily mean more money in your bank.
I see people get obsessed with all kinds of vanity metrics and still remain clueless about what actually is moving the needle. Thus, risking to spend money and time on activities that are practically worthless.
So let’s fix that.
Let’s talk about business metrics every business owner needs to have in place and check regularly.
But know this: Collecting metrics just for the purpose of looking at some data is as good as not having any. The critical part is to actually DO something once you have your data in.
So. If you haven’t done yet, decide what you are going to measure and start tracking that.
Since there are literally thousands of things you can measure it can become overwhelming quickly.
So here’s what you do: Pick ONE metric and measure that.
Here are the three most important to help you with that choice:
Revenue: gross revenue and net profit.
Figure out what your goal is for revenue and make sure you keep track of your performance.
Cost of customer acquisition.
This simply means: How much money do you need to spend to acquire one new customer?
Lifetime value of a customer.
An important number to know. In combination with the cost of acquisition above, this will tell you how much money you can afford to put into getting new customers.
And that’s it. The three big ones you need to know.
But the list doesn’t stop here. There’s retention rate, open rate, total traffic, conversions on landing pages, cost per lead… and so on.
I’ve collected everything into a downloadable PDF so you can pick the ones that are most important to you. (Link at the bottom of this post.)
Then, once you have your metrics in place…
Start reviewing them on a regular basis.
Weekly, monthly… you decide what the interval is going to be. The important thing is that you stick with it.
So be consistent.
The easiest thing to do? Have a meeting every Monday morning and go through the data from the previous week. So you always know the health of your company.
Are the numbers going up? Great!
Things going down? Oops… But hey, still great! Because now you know WHAT to focus on. And you don’t risk wasting your time and money with stuff that would have no effect whatsoever.
The data helps you make that decision faster… and easier.
For example, if you’re not even close to that goal for gross revenue you said you want, look at what you are doing that’s not working… and change it!
You have to remember one thing: Your business is always evolving. No matter what business you’re in, things are constantly changing.
And the only way you can find out what is changing is… by looking at your metrics.
So here’s what you do:
Download the PDF, look at the list of metrics, and pick ONE that’s important to you. Then, start measuring that.
Soon enough you’ll have a pretty clear picture of what is working and what doesn’t.
And once you know that?
Level up the things that work and dump the things that don’t. Your business will grow faster and you’re going to waste much less time and money.
Originally published at eventualmillionaire.com on April 5, 2017.