We all get caught up in the vanity of marketing. We like to know how many page views our last post got or how much time visitors spend on our site. These numbers might look impressive on paper, but they don’t indicate how content is driving our bottom line.
You know the feeling – your product launches, your blog post gets noticed or the case study you’ve completed on your biggest sale starts to get some comments.
You watch your traffic grow and you can’t pull yourself away from the analytics for the whole day.
But what really matters these days?
So, what are the metrics that matter and how do you measure them? What are the metrics that matter most to you?
Vanity vs. Actionable: What’s the difference?
Let’s start by quickly defining the difference between vanity and actionable metrics.
Vanity metrics: Numbers or statistics that look good on paper, but don’t really mean anything important. Vanity metrics show that your efforts are making a difference but you don’t know what that difference is.
Actionable metrics: Statistics that link to specific tasks that you can improve on and to stats that you can tie in to the goals of your business.
If a metric isn’t actionable and you can’t do anything to make it better why are you tracking it?
The number of your visitors, subscribers, and followers are often meaningless – some say.. but
Take Google Analytics..
- Users: this provides the total number of unique visitors to a particular page on your website.
- Pageviews: records the total number of times a particular page on your website, be it a product page, or a blog post, is viewed.
- Unique Pageviews: this metric combines pageviews that are generated by the same user during the same session, so you can gain an insight into the number of sessions during which that page was viewed.
And Social Media..
- Shares: this encompasses Retweets, Repins or any channel-specific social share metric that demonstrates the reach of your content and the fact that it resonates with your audience and they find it...
- Comments: It takes more effort for a reader to post a comment on a blog post than it does for them to like it, so this is often a strong gauge of how engaged your community is. For Twitter, this could include both Mentions and Tweets linking to you.
- Follower growth: Consider any new followers in your regular reporting; they have made a conscious decision to be exposed to the content that you’re posting.
These are useful. So, they are not completely meaningless, but perhaps they aren’t what you should be spending most of your time or energy on.
Worried that you don’t have as many Twitter followers as your competitor? Don’t be. You can buy a huge following for a few quid.
So what metrics should you be tracking? To do this you need to determine what the goals of your site and business are. These are some of ours..
- Earn enough income to support everyone who works in the business - obvious
- Enjoyable and meaningful work.
- Satisfy our customers and help them accomplish positive results.
To get to these we look at the following..
- The revenue side... Above all else, you need to track where your revenue is coming from. Each time someone pays you, it needs to get tracked. This includes all these metrics:
- Lifetime Value
- Total Revenue (Month, Quarter, Annual)
- Net Profit
- Average Order Value
- Number of Transactions
- Average Length of Subscription (for subscription business models)
- Conversion Rates
Site-wide conversion rate is important but there’s a great deal to conversion rates. Track the conversion rates of your traffic sources, primary keywords, and marketing campaigns. Don’t compare yourself to the industry or your competitors because your goal is to establish an internal benchmark. Then try to beat it.
There’s going to be some overlap with conversion rates and your leads/customers. One of your top priorities is to track the conversion rate of prospects to leads, and leads to customers. When someone comes to your site, they’re a prospect. When they give you their email, fill out a contact form, create a trial account, or add a product to their cart, then they become a lead. When they give you their credit card, they become a customer. Track the conversion rates at each step.
- A/B (Split) Test Results
A/B experiments produce the most actionable of all metrics, because they explicitly refute or confirm a specific hypothesis. Either way, you can use split-tests to take action on anything from minor copy tweaks to major changes in the product or its positioning.
- Funnels
Sections of your site and marketing might be highly defined. Like an ecommerce checkout process, your visitors are forced to follow a series of steps before they convert. Other examples include email signup processes and webinars. When you have a funnel that people follow before converting, you need to track each step. This tells you where your funnel breaks down. Do your customers abandon the checkout process right before submitting payment? Or do they never get past the cart page? Knowing where people stop tells you exactly what you need to work on.
- Cohorts (customer segmentation)
Different groups of customers behave completely differently. Do you know what separates your most profitable customers (they come back month after month) from the customers that buy once and never return? To understand how these groups behave, you need to use cohorts.
Cohorts separate your customer into groups so you can find trends in the data.
- Marketing Campaign Performance
Do your marketing campaigns bring you profit? If not, you need to change something... Or test new ideas until you force them to work (if they’re not profitable, they’re not working). Either way, you need to know how much profit each campaign brings you.
Take the total revenue of each campaign then subtract the cost of marketing and the cost of goods sold. If you end up with a negative number, obviously you have a problem.
Which Metrics Matter for a Business or Blog?
As your business matures and you start to take a view on what’s important, what you need to know and maybe what you can find out you start to see metrics you used to focus on don’t matter nearly as much as you used to care about them.
Here are some examples of the different types of metrics that typically matter to you as you progress through each stage of entrepreneurial maturity.
- Infant: traffic, followers, subscribers, reviews, social media shares
- Adolescent: Number of sales, revenue, conversion rate, time on site, customer satisfaction
- Mature: profit, retention length, churn rate, revenue per customer, costs of goods sold, impact
What metrics you should be tracking in your business really depend on your goals. We at Alchemyinteractive helps you to know what metrics you should be tracking.