Ever heard that saying that what you measure grows?
That’s all well and good, but do you ever wonder WHAT you should even be measuring??
Business comes with all kinds of numbers, metrics, analytics, and tons of other confusing terms and things you hear you’re supposed to be measuring. It’s easy to become so overwhelmed that you don’t even know where to start!
And do you REALLY have to track every single little thing in your business, or are there just a few key numbers you need to keep an eye on, at least initially?
I used to avoid this area of my business like the plague. Seriously. I had plenty of excuses that included things like “Where am I supposed to find the time to do that? I already don’t have enough time to do EVERYTHING else in my business!”
So I plodded along (yes, plodded), trying one thing after another to grow my business. If something worked (even though I had no idea why it worked), Hallelujah! If something didn’t produce the results I was looking for, I scrapped it and tried something else the “gurus” were hawking. Lather, rinse, repeat.
Besides being exhausting & soul crushing, what I’ve discovered is that if I had started tracking some basic metrics, I could have saved myself many late nights and headaches. Among other lessons, some of those things I scrapped were actually great, I just needed to make adjustments to how/where I was promoting them. I know because I revisited some of them. 😊
Being able to make business decisions based on data taken directly from my efforts is exciting and almost addictive. Based on what the numbers tell me, I can tweak things to get a better result. I’m in charge like never before!
I am encouraging you to take this to heart and begin implementing this in your business as soon as possible. It will absolutely put you in the driver’s seat!
Metrics vs. KPIs
Let’s start with what metrics and KPIs have in common. They are both used to measure different aspects of your business. Both are important and equip you to be able to make data-driven decisions rather than operating on a feeling or simply guessing.
How they are used is where they differ.
Metrics are activities you track, KPIs tell you how well you are performing, and your effectiveness of meeting your objectives.
Keep in mind that there are 5 common categories that they both will fall into: Financials, Marketing, Programs, Customer Service, and Team Members/Staff.
What are your Metrics?
Businesses vary, so not everyone tracks the same data. Depending on your business model, you will include the areas that are important to monitor for your growth. Keep in mind that Sales and Expenses are very broad and should be broken down into specifics.
In the online world especially, we like to track things like:
- Signups for specific lead magnets
- Conversions for specific ads
- Course enrollments
- Full pay options, payment plan options
- Webinar signups, attendees, conversions
- Social media engagement
- Page traffic
- Traffic from a guest post or interview
- Number of customer service inquiries related to various products or offers
- Proposals sent and proposals accepted
Some metrics are more important than others at different stages of your business growth. It’s important to know which numbers will help drive you forward, which you can tune out for now, and WHEN to start looking at what.
What are your KPIs?
According to KPI.org, Key Performance Indicators (KPIs) are the critical (key) indicators of progress toward an intended result. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.
They are the numbers that determine and measure the success of your business. They’re like your business vitals!
Just like metrics, your specific KPIs depend on your business objectives.
In a for-profit business, this usually comes down to revenue, profits, and expenses. For a non-profit, it might be money raised, money donated, people reached, etc.
For your business, the specifics might look like:
- Increasing the size of your list by 1500
- Increasing course enrollments by 50%
- Decreasing the percentage of customer service inquiries by 40%
- Increasing your team size by 3 people
- Decreasing the number of hours you work to 20/week
- Increasing donations by 25%
As you can see, your KPIs should be quantifiable. There is a huge difference between saying “I want to work less someday.” and “By the end of this quarter, I want to only work 20 hours per week.”
How do you track your KPIs and metrics?
There are lots of different systems. Programs, spreadsheets, even simple docs. It depends on how complex your KPIs are, how often you’re checking them, and the scope of your goals. You might also be tracking them on a weekly, monthly, quarterly, and annual basis, and you’ll want a system that allows you to see your progress at a glance!
How often should you review your KPIs and metrics?
Again, this depends on your goals, your capabilities, and the needs of your business.
For example, if you have stakeholders, you may need to review certain KPIs weekly or even daily. For smaller businesses, I recommend monthly to begin, and then you can adjust as you become more in tune with your flow.
How do you know if you’re on track?
What does the data tell you? Are you meeting your objectives? If so, you’re on track. If not, it’s an opportunity to tweak things for a better result.
In the example of decreasing the number of hours you work to 20/week, how many hours are you working now? If the number is more than 20, look at the number of hours you currently are working and what you are doing during those hours. Are there things you should be delegating instead of doing them yourself? Are there places where you’re the bottleneck in the business and need to map out some processes to take you out of certain areas?
A good question to ask is “What can I do differently to get the result I want?”
I do believe what you measure grows when you are nurturing it purposefully. When you implement metrics and KPIs in your business, you’re putting your stake in the ground and saying these things are important to you and you intend to achieve your objectives. For my woo woo friends, you’re telling the Universe what you want and you’re willing to do what it takes to make it happen.
You aren't wishing or daydreaming. You are in charge, armed with clear objectives and a concrete way to measure your progress as you make them a reality.
Ready to start mapping out your metrics and KPIs?
I’ll be going more in depth about what you should be tracking and how to connect your goals to your KPIs on August 15th in the Growth Strategies Café. You’ll also be able to ask questions to get answers for your specific business!