Metrics in Your Business: What is Your One Number?
Wednesday, August 31st, 2011
With the plethora of ways to measure business performance, how do you not get lost in the complexity of it all? Josh Stailey shares how to find meaningful metrics for your business today.
Hello, this is Josh Stailey from the Pursuit Group. This time I want to talk about metrics and measurement. Metrics is a graduate degree term for measurement. So what we want to do is talk about measurement and metrics in your business. It’s a big deal now, Google Analytics for your website, all different kinds of measurements for performance and key performance indicators or KPIs and everything else. I hear about this all the time and most of the time it simply doesn’t work because there are so many things or companies even that are dedicated to wanting to learn about that and do it. Give it up because it’s too complex.
So let’s talk about metrics for your business in a meaningful way that you can apply today. So I think the key thing is that you need to first of all find what your one key metric is, your one measurement that you want to begin to track first in your company and it should something that is driving your bottom line or your top line for that matter, something that tells you that if this goes up my income is going to go up or my billings are going to go up or something else good is going to happen with the company.
So you can’t tell me that your driver, your key driver is sales. That doesn’t tell me anything. What does me is what is it that drives sales? Is it for example, if you are a retail outlet, you have a storefront, if you know that if you get 20% more people in the door you’ll get 20% more sales? Then that is a key driver. People n the door is a driver. If you are an organization that sales subscriptions then getting somebody to sign up for your content or your service, whatever it is that is you key piece and it might not be that. That may be your sales. It may be in order to start that you have to get them to actually get to your website before they sign up for a subscription, so visits may be and you know that if your visits go up 20% your subscriptions are going to go up 20%
So what you want to do, what I think you need to do is to go out and sit down and figure out what your one number really is, the number that you can find and track that is a predictor for future success and then when you get that watch that number. Start looking at that number from a standpoint if I do this what happens to that number, if I don’t do this what happens to that number and that can be any number of different things. You can spend money toward it. You can spend attention in one form or another to making that number go up. There are many different ways to do that, but once you find a number that you can reliably correlate to the outcome you want that is your one number. Then you can pay attention to that and the very specifics about making that number work better.
Now the critically important process or piece in this process that you must do or this will fail utterly is you need to track and measure every single thing you do to make that number change, so that you can go back and look and say all right I did these four things, number one failed, number two was marginally successful, number three actually got me about 20% more and number four doubled my numbers. So what do you learn about that? Don’t ever do this one, take a look at these two and see if you can make them better, but invest in this one, but you can’t do that if you don’t track and what I find in almost all small businesses is a failure to be able to tell me exactly the results of any efforts they made toward moving any particular metric.
This is Josh Stailey from the Pursuit Group. Love to talk metrics again with you. If you have specific questions write them down and we’ll pick them up later. Thank you.
Our friend and contributor Josh Stailey passed away unexpectedly on September 10, 2011. We have valued his expertise and willingness to share his insights with us. We discussed the appropriateness of sharing content he provided before his death with his business partners at The Pursuit Group and they agreed sharing his expertise was a fitting tribute to Josh.
Josh Stailey was a 40-year veteran of the marketing and sales wars, a journalism-trained professional who understood the role of information and technology in today’s business world. A consultant and writer, he was a founding partner of The Pursuit Group, which specializes in designing and implementing demand-generation systems for small- and medium-sized businesses. He has also consulted with Fortune 500 companies on customer experience management and content system design.
To be included in our video interviews or if you need video services for your company, please contact us.