Business Metrics that Matter
I’m having more and more conversations with business leaders that are still not leveraging the metrics at hand. There’s an old saying that I have bumped to the top of my 2015 presentations when talking with clients.
“Are you being productive, or just very busy?”
I prefer to be productive. Producing. Putting in work Being able to measure the results of that work. Comparing the different types of work I am doing. Increasing what works, and doing less of what doesn’t. And if it involves budget – even more scrutiny is applied.
Here are just some of the recent business metrics excuses:
- Our traffic is up so why dig any deeper? Why is it up? Do you know from which sources? Do you know if it is up just because they are here to login? Was it from PR? A Campaign? A blog post? An infographic? Did it bring the type of traffic that will convert? What landing pages spiked? Staying at the surface does not give you insight as to what is really happening and if it is good.. or not.
- My team is making their lead goals, and that’s the focus.
Leads are very important. But are they good leads? Where are they coming from? Which lead sources bring in higher valued leads than others? Which sources convert better, faster, stay as customer longer?
Is it possible that some of your best lead volume sources are costing your Sales Team the most time and energy – only to close a small deal? Or no deal at all? Is it possible that getting 1/2 the number of leads may be better for your organization – if you could prove they were of higher value and converted better?
- I’m not increasing the marketing budget until sales closes more deals. What if you didn’t have to? What if you could shift your spending based on the lifetime value of a customer, instead of cost per lead? You might know what source creates the most customers, but if those customers aren’t staying, it might be better to put more effort into a source that creates fewer customers that stay longer. Effectively producing a better long term ROI.
- I’m not paying someone to pull data and update spreadsheets all day.
Measure twice, cut once. If you’re not taking the time to know the exact measurement of what you’re doing, then chances are you’re trying to build is not going to look as nice it could be.
Investing in the right tools will get you better results. Investing the time to get all your data into one spreadsheet (or DB, or tracking solution) will allow you to see how your running from front to back. You need to know the spend and the traffic on the front end – and how efficiently or inefficiently it gets to the back end.
- Our web/marketing guy has enough on his plate, adding more tracking is just a waste of time. Stop chasing chickens. Knowing what campaigns, blogs, tweets, landing pages, and funnels are creating the most revenue will liberate you and your team. Imagine simply focusing on what’s important.
- Content is king! We just need to focus on getting more blogs and tweets out there.
Gotta love the old shotgun approach. Maybe you need to test the water in a few areas when you’re getting started, but by now, you should be able to successfully measure what content has produced the most ROI. Cut the rest for now, focus on what’s produced the most – then maybe venture out on a few new ideas and see if they show any promise. But please, stop throwing it all out there.
- The reporting dashboards give us enough visibility to what is working best. If you’re organization has the ability to use APIs to pull all of your web and social media traffic in with your funnel conversions, through your sales process, and tie back into your billing tables… then you’re dashboards are simply giving you silo’d information. Be sure you have common key’s to connect all of that data together.
- If my sales team likes/dislikes the leads, we do more/less.
One of my favorite excuses. Sales people can be the most important part of your revenue equation, but they are also often the most self serving (Insert hate mail here). What I mean is, Sales people often go after low hanging fruit. Are you able to segment out your leads by potential revenue? Get the right size leads to the right sized reps to maximize your funnel.
You’re funnel should be smart enough to route to the right sized teams. I always try to respect the subjective statements brought to me in sales meetings, but then I immediately dig in to see if there is data to support that. Is it systemic, or just an issue with one rep? Is there another rep that could handle these better? Is it just an excuse?
- I know my overall cost per lead and as long as we make our numbers, I move on to other pressing things. As with #3, your cost per lead may be allowing you to hit your lead goal. It may be allowing you to hit your first month revenue goal. But are they staying with you? Does your CPL formula pay itself back? Sometimes calculated loss leaders are important, but if you can’t measure that either, you may be throwing money away that would save time be better spent on what may be higher CPL campaigns.
- The Board is OK with our results, there is no need to confuse them with more detail. I don’t need them to ask more questions. Boards love to know that you have your shit together. You’re not going to confuse them. You’re going to show them that last quarter your budget produced “this much revenue” and because you are able to do complete front to back metrics, changes you plan to make to X campaign this quarter will produce “this much more long term revenue”.
Are you able to answer these questions and take actionable steps?
I expand on many of these bullets with questions, because I can’t tell you if your basic data points are making you successful, or if you are just lucky, or if you could be doing 3x better with just a small shift in strategy. The bigger question is, how would you answer these questions if the Board asked you?
In a future post, I will share how waterfall metrics work and how you can use pivot tables to view many levels of granularity quickly to get the answers you need.
What excuses have you heard? Leave them below.
Thanks for sharing.