All business owners have one thing in common: They want their business to be successful.
It doesn’t matter what industry they’re in, what product they’re selling, or what problem they’re solving. Every business owner wants to rise to the top …
Most people know what success feels like … but what does success look like?
Contrary to popular belief, this doesn’t have to be very complicated to find out. Because although success may look slightly different depending on your job, almost every company can track success with one thing: the right metrics.
It’s a growth tracking method that Monique Morrison, co-founder of Jeronamo Digital Solutions and DigitalMarketer ELITE Coach, uses on a daily basis for her clients. She recently spoke in her DigitalMarketer workshop about the power of metrics and how you can use them to project and achieve growth for your business.
Why high-level success metrics are important
Using the right metrics to track business performance is a surefire way to determine if you are growing your business. They are trackable, specific, easy to understand, and take the guesswork out of the process.
You can see where you are now and how it compares to that time in the last month or last year. And most importantly, you can use these numbers to project what success will look like a year later.
As we figure out what went right and wrong with our business, it’s great to look back at the past. But none of this matters unless we figure out how to apply what we have learned from the past to the future. By keeping track of the right metrics, you will get the milestones and checkpoints that you need to achieve by being able to assess exactly what you’ve done in the past.
Reliable methods of quantifying success cannot be underestimated. In an evolving business world where you’re always looking for a competitive edge, it’s often better to look inward than outward. Tracking your success metrics can bring something concrete to the table by figuring out what worked really well and what didn’t work so well at all.
And best of all, you don’t have to spend a dime tracking your own metrics. It just takes time and a little effort.
Which metrics are important?
To be honest, there are a lot of metrics that can be important to your business.
However, there are some general metrics that are helpful for any company to keep track of. But that also largely depends on whether you are a project / service oriented company or an e-commerce / retail company.
The project and service-oriented business must pursue the following:
- Month-to-month sales
- Sales count from month to month
- Lead conversion rate
- No-show / cancellation rate
- Landing page conversion rate
- Average cost per click and click rate
Ecommerce and retail businesses need to track:
- Month-to-month sales
- Sales count from month to month
- Unique visitors per month
- Average ad cost per click and click rate
These are the stats that are most important to your business as they give you a bird’s eye view of when things are going right. These metrics are very broad and are the culmination of everything you do. That said, they all translate whether money is flowing into your company’s bank account.
Let’s take a deep dive into why these statistics are important.
Sales month after month
Monthly revenue is the metric that any business, regardless of industry or niche, should be tracking to measure and project growth. It’s literally the number that tells you how much money is going into your business, and one that you definitely have your eye on. Without addressing it, you won’t be prepared to conduct basic business analysis yourself.
There is only part of this metric that needs explanation: the length of time. Although some companies may perform a formal assessment of their earnings on an annual basis, a monthly assessment is more effective. This way you can see how your sales fluctuate with different promotions or marketing strategies, and then learn how to analyze and adjust those strategies in a timely manner.
If you try to keep track of it on a weekly basis, you run the risk of overreacting to unimportant shifts. And the last thing you want to do is drive yourself crazy.
Monthly tracking is the way to go. To find these numbers, all you have to do is look for your books or bank statements. If you have a specific accountant ask him or her. It’s that simple, but it really matters.
Sales counting month by month
Similar to sales, this is important for any business. Your sales numbers can tell you how many sales you are making and how much money you are making, but it also adds important context to your sales number.
That’s because this metric analyzes the number of sales, not the amount of money. This is a great way to review your earnings and see if you are converting a number of small sales or some really large sales to US dollars. This allows you to analyze the type of audience you want to target and optimize your marketing plan.
You can also use it to find the customers who are bringing you these high sales so you can send them an exclusive offer as a small thank you.
To find this number, you can check your ecommerce platforms or do a manual count if you are a brick and mortar business.
Average ad cost per click and click rate
You can use these two metrics to measure the effectiveness of your online advertising. It not only tracks the amount of money you pay to see them, but also the number of times people actually click and interact with them. This is important as digital advertising is one of the cornerstones of any great marketing strategy, and knowing how to optimize your ads is vital to growing it.
To find these numbers, look no further than the platforms you advertise on. Facebook and Google, as well as every other platform you may be on, provide these statistics for you. You just have to know what they mean.
Unique visitors by month
Tracking unique visitors is an important task for ecommerce businesses as their business is entirely online. It’s the same reason brick and mortar businesses like to keep track of how many people come in and out of the store. If you can’t get people through the (virtual) door, you never have a chance to sell anything.
Knowing the number of your visitors can also help you assess the effectiveness of your advertising and SEO, as well as the persuasiveness of your landing and product pages. When people aren’t visiting your website, you know you can probably make changes to get more traffic, and therefore more sales. When your traffic is high but your sales are low, you know your advertising and reach aren’t the problem.
You can find these stats on your website’s dashboard, as well as through Google Analytics and even some of your advertising platforms.
Lead conversion rate and no-show / cancellation rate
While these statistics are different, they’re also one and the same – mainly because it’s easy to keep track of both at the same time.
For project and service-oriented industries, a large part of your work consists of lead generation. Your goal is to create leads and then convert them into customers. You can use these statistics to determine just that. Are you converting leads into customers?
Of course, you want your lead conversion rate to be high and your cancellation rate to be low. However, it’s important to keep both of them in mind as this will give the most complete picture.
By comparing them side by side you can see the rate at which you are converting. Then you can use it to roughly project how many new customers you can expect to do what you do in a given time period. Then you can have a baseline when trying new things to increase that lead conversion rate.
You can find this data in Google Analytics or contact your CRM software. Anywhere you track or organize prospects you can keep track of how effective your lead generation (and deal) is.
Remember that these statistics are important because not only do they show what you’ve achieved, but they can also project you into what you can achieve in the future.
And having a good idea of where your business is going is one of the most powerful tools you can have.
Numbers don’t lie – that’s why metrics are your company’s best friend. They take all the guesswork out of the growth and tell you exactly how well your business is doing. And as you can see from the metrics above, there are all sorts of numbers that can give you helpful information about your business.
Then you can use all of these numbers to paint a completely honest picture of your company.
And once you have that, you can make any changes you need to grow. Then you can see if you were able to do this by simply comparing your current numbers to your previous numbers.
It really is that simple, but it really is that powerful too. You can influence the success of your business in real time by taking the time to find out what success actually looks like. And while this includes money in your bank account, metrics show you that success goes much further.
Track metrics and take control of your business. Trust me you won’t regret it.