Data collection, measurement and analysis are key elements of any successful business. Unless you know what’s happening and why, there is no way to correct problems or gauge progress.
Unfortunately, in today’s “data rich” environment, it’s easy to collect information that, while possibly one hundred percent accurate, is not relevant for your particular business and circumstance. As a result, you can miss important trends and make poorly informed decisions.
Money in the bank
When it comes to metrics, here at Keyword Connects, we have a simple philosophy: track the numbers that help you take a check to the bank. Anything else – even if it involves numbers that are trendy, or easily measured, or simply, “what we have always done” – is a potential waste of your time and scarce resources. Some people call these “vanity metrics.” We call them useless.
Instead, we recommend taking a sober and well-reasoned look at your particular operation, making sure that the numbers you capture and pay attention to are relevant … to you … right now.
1. Start with the end in mind.
This time of year, we are all focused on plans for 2019. But not every company will have the same objectives. Some are focused on overall growth. Others on profitability. Still others on launching a new product line or entering a new geographic area. Your plans for the coming year will dictate which tactics you put in place and, as a result, which metrics you’ll want to focus on.
Are you in heavy growth mode? Then you’re probably looking at lead volume and close rates.
Are you looking to expand into a new market? In that case, you’ll want to make sure you separate out the data in that area from your overall reporting.
Are you in a steady state? You might want to pay special attention to referral rates and profitability.
The point is, when it comes to metrics, one size doesn’t fit all. The numbers that matter most are the ones that apply directly to your goals and current situation.
2. Be willing to ignore what doesn’t matter.
The challenge with marketing in the 21st century is that there are so many options. Facebook, Pinterest, paid search, print advertising, billboards, radio … the list goes on and on, with new options appearing every week.
But you’re interested in what drives your business, not (necessarily) what’s popular or even obvious.
Take the example of “impressions,” defined as the number of times one of your ads is viewed. If you’re trying to break into a new territory and raise awareness, impressions may matter. But if you’re already established and known, you care about leads and sales – you’re not nearly as interested in impressions.
The same goes for “likes,” “followers,” “views,” “clicks” and other commonly tracked awareness indicators. Racking these up may feel good, but in many cases, these also fall under the heading of vanity metrics.
As mentioned above, the only metrics that really matter are the ones that help you reach your goals. Ignore the rest.
3. Put your metrics into action.
Once you have a handle on what matters – and what doesn’t – do your best to incorporate your essential metrics into the way you do business every day:
- Tie your important metrics back to your budgeting and planning process.
- Share the numbers broadly with your team, so that they stay focused on the things that make a difference.
- Be prepared to make changes, incorporating new metrics as needed and tossing out those that no are no longer meaningful.
Data is not insight
Metrics that don’t (or no longer) matter can seep into your company without your realizing it. It’s easy to get caught up in paying attention to what’s new and trendy, even if, at the end of the day, none of this has a real impact on your business.
Figure out what you’re trying to accomplish, ignore the numbers that don’t apply, and use your key metrics to make smart, informed business decisions.