While today’s entrepreneurs are fascinated with Eric Ries, Peter Thiel, Steve Blank and Seth Godin (and rightly so), I fear I’m too frequently referring to an unheard of an esteemed author from decades ago; as though the entreprneuers of today are happy being ignorant of the past and willingly doomed to repeat the mistakes of it. Peter Drucker, author of Innovation & Entrepreneurship, was writing about what makes companies successful before most of the authors of today were in place to make the successful companies of today, well, successful.
My reason for sharing that is simply conveyed in a few of his wise words:
- “If you want something new, you have to stop doing something old.”
- “There is nothing quite so useless as doing with great efficiency something that should not be done at all.”
- “What gets measured gets improved.”
- “Results are gained by exploiting opportunities, not by solving problems.”
- “Management is doing things right. Leadership is doing the right things”
Begging a question… how does one know what’s right?
How do you as a founder know what’s old, useless, or an opportunity? How do you know what to improve without measuring?
I’ve shared in great detail, previously how startups set up Google Analytics. The platform with which to start, there is an adage I admire: if you’re not measuring, you’re not marketing and if you’re not marketing, you aren’t in business. But, once you have the measures in place, do you really know what questions to ask? What matters?
The Startup Marketing Metrics that Matter
Focus your attention first on one and only one. This metric alone speaks volumes about your performance, ability, and sophistication. When advising or consulting with a new startup, one of the first questions I ask of everyone with whom I meet/interview is, “what is your conversion rate?”
How can one number be so significant and substantial? Particularly, at an early stage when it might not be accurate? What if we’re a Sales based organization or only convert offline?
The reason for the question, the reason you must have an answer, is that not having any idea shines a spotlight on your ignorance, priorities, and gaps. As a potential investor, employee, consultant, or advisor, answering to such a question, “we have no idea,” is a huge red flag. You may not know what it is, but answering that, “we’re trying to figure that out, can you help?” is a far better answer; conveying your commitment to metrics and performance, that metric, and the sophistication it takes to determine what it is not just for yourself but in your market.
Of the number of emails, coffees, meetings, RFPs, and registrations you receive: how many buy?
Why is conversion rate so telling? Marketing is the cornerstone of your intelligence; it’s not your lead gen, search engine marketing, SEO, email, nor growth strategy alone, unless you’re doing it wrong, it’s how you know what to build, when, why, how, and for whom. Marketing is the distinguishing characteristic of a business and as the cornerstone of a business is creating a customer – how well are you doing that? How well do you convert?
Your conversion rate indicates the quality of your brand, website, store, and product. It sheds light on your competitiveness, price point, and even SEO. Is it improving or falling? How does that compare to others in your space?
It’s not the be-all-end-all metric, but the simplest data point on which to focus, and data which tells so much about your business. If you don’t even have a clue what it is, why would an investor take a risk on you? So, before we get into the dashboard metrics and KPIs that are the purpose of this article, start here, learn how to set up Google Analytics and know how you convert.
Marketing Dashboard Metrics that Matter
Some time ago, so frustrated was I with the analysis PR firms provide about their impact that I took a stab at what you can and should expect from the PR agency with which you’re working (it’s become a rather popular article in spite of PR friends being a little miffed at me for demanding that they track and measure their impact). Simply, far more than audience and traffic, PR can and should be measuring impact: on interest, on demand, on conversion.
Thus, we’re talking about complicated questions not easily measured. How on earth do you go from Google Analytics (data) and the conversion rate to the metrics that matter, intelligence?
Work toward constantly monitoring and optimizing for the following:
- Traffic. From where are people coming.
- For which of that is paid and what is the ROI?
- How much comes directly to us and the brand? This helps measure offline activity and awareness of the business as direct/brand volume must know about us. How? Track “Direct” traffic and brand keyword search traffic.
- From what keywords is traffic coming? Organically vs Paid. What does that mean about the awareness of and interest in the business?
- How much overall from Organic Search?
- How much from Social Media as a result of OUR actions vs. others? – When we tweet vs. not
- How much from email that we send?
- How much from “referrals” (others – partners, bloggers, news articles)
- Leads (not customers, but measuring interest by capturing those who might convert). Roughly, by way of the same breakdown as above so I won’t belabor.
- Cost per Lead and Cost per Acquisition. Same breakdown as above.
- Lifetime Value. revenue * gross margin * repeat purchase or retention rate
- Site Value. By way of establishing and accounting for the $$ value of leads, conversions, and engagement. Track what pages on your site are worth.
- Engagement metrics.
- Site Bounce rate (by page)
- Site Page Speed (by page)
- Employee application leads
- Sales and HR response time
- Conversion rate of lead to customer/hire
- Client/customer leads (by vertical and by lead source – traffic source)
- Response time
- Conversion rate
- Traffic to Lead
- Lead to Marketing Qualified Lead
- MQL to Sales Qualified Lead
- SQL to Quote
- Quote to Closed
- Social media reach and engagement.
- Email performance.
- Delivery rate
- Unsubscribe rate
- Open rate
- Click through rate
- Conversion rate
- Inbound Link Rate.
- Landing Page Conversion Rate. How are specific, key pages converting? What are key pages?
- Home page
- Contact page
- About page
- Blog home
- Blog posts (overall)
- Features pages
- Recruiting pages
Most importantly, appreciate that raw numbers are worthless. Truly. Hence the point in my article about PR Agency Accountability: knowing the audience for something is essentially worthless.
Data is really only valuable in the context of deltas (changes) and comparisons. Raw numbers are meaningless so account for and present them week over week, month over month, year over year AND/OR annotation (notes) indicating where changes were made that affect your business – Deltas. What are deltas?
- Site redesign
- Major blog posts
- News coverage
- Event participating
- Speaking engagements
- Email drops
Critical to intelligence in business is tracking the things that cause changes in your business metrics and monitoring the changes, as result of those iterations AND over time. Only then can you work to improve and optimize and only then do you have the credibility as a business owner or founder to convey to potential partners, customers, employees, contractors, investors, and advisors that you have any clue what you’re doing.