Lauren Olson, June 16, 2017
Metrics are indicators to help you to understand how your business, or your website, is performing. You can regularly check on these metrics through a dashboard, a place where you can see your most recent metrics (usually a spreadsheet, document, or website).
While metrics can sound intimidating (or deathly boring), they’re essential to understanding the health of your business.
Depending on the size of your business, you can set up a spreadsheet dashboard with something like Google Sheets or Microsoft Excel. If your business only has a few transactions and customers each month, you can manually input information daily or weekly.
If your business works with higher volumes, you can set up an automated dashboard with a service like Klipfolio or Zapier. These platforms enable you to pull and display data about almost every part of your business. Analyze anything from sales volume, to website traffic and social media growth.
When you take a methodical approach to metrics, you can understand operations and potential obstacles to whatever it is you’re measuring.
You may already be tracking your business through revenue and customers or leads, but monitoring your website through pageviews, time on page and bounce rates is equally critical. These metrics serve as leading indicators for how your business is performing.
The key in starting out with metrics is not to take on too many at once. Different metrics matter for different businesses. Know what it is you’re trying to measure (sales growth, phone calls made), and pick a few specific metrics (like revenue, leads, or pageviews). Leads and pageviews serve as leading indicators for your revenue — when you focus on those two, you can grow your revenue as a byproduct.
Don’t try to influence all your metrics at once. Instead, focus on just a couple at a time. Here are 9 metrics you can track to grow your business:
This is fundamentally the most important business metric, and you’re most likely already tracking it. In addition to revenue, you should track both gross revenue and profit. If you’re earning money with your product or service, revenue means profit. In plain english, that means you've bought a bit more time to build a successful business.
The ultimate goal of tracking revenue is to create a consistent path to generating revenue, so you can grow and scale your business. You also want to dig a bit deeper to see which metrics affect revenue. For example, you might find that increased awareness (measured by the number of website pageviews) results in a greater number of calls or contact submissions. That means more revenue!
If your business doesn’t do many different transactions (you’re an internet marketer with three main clients), and if you send invoices to collect payments, you can use a tool like Xero, Freshbooks, or Wave to keep track of your revenue.
If your business conducts a lot of different transactions (you’re selling novelty signs or t-shirts), you can use Stripe to keep track of your revenue.
Keep an eye on how many customers you have, and what you know about them. If you’re selling products, you might have dozens (or hundreds) of customers. Figure out what they have in common, and if you can group them into similar segments to make future marketing more effective.
Figure out how many of them you lose and gain each month. Also, keep an eye on your biggest spenders, or the ones that refer the most other customers. These high-value customers deserve extra attention and praise.
If you have only a few clients, you should consider how satisfied each customer is each week — and how you could nurture these relationships.
Customers are a lagging metric of current revenue. The most important thing is to retain them, so they can contribute to your revenue in the future. According to the book “Marketing Metrics” by Paul Farris, Neil Bendle, Phillip Pfeifer, and David Reibstein, “the probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%.”
You can use the same tools you use to track revenue in order to track customers: Stripe, Xero, Freshbooks, or Wave. If you want to track customer support, you can use a tool like Help Scout, Intercom (our favorite), or Zendesk.
People who are interested in your business, but haven’t bought from you yet, are called leads. They are a leading indicator of revenue — meaning a greater number of leads should generally result in a greater amount of revenue.
Measuring your leads regularly (monthly or weekly) will help you pinpoint how well your sales and marketing efforts are paying off.
Your goal is to grow the number of leads, and to identify high-quality leads: people who are able and ready to buy. Oftentimes, the only contact information you get from leads is their email address.
Leads are one of the most important metrics when you start out, because these people intend to do business with you. There is a tried and true method to test leads.
As your business grows and becomes more sophisticated, you should understand how to encourage top of funnel leads to move to the bottom of the funnel. In fact, if you’re optimizing for sales, your funnel should eventually progress to the point where fewer leads are leaving the funnel.
If you’ve got very few customers, but they all spend a lot of money with you, you may not need as many leads as other businesses. Here are a few ways you can set up Google Analytics to track your leads. You could also track your leads with a mailing list service, like MailChimp or TinyLetter.
Pageviews are important because they can serve as a litmus test for awareness. Are enough people seeing your website? Without awareness, your business will not generate additional leads or revenue. No other metrics matter until you are successfully driving people to your website.
On the other hand, pageviews are just the first step. Alone, they are not enough to contribute to your revenue.
Ideally, you want your pageviews to increase gradually. If you run a small business targeting local consumers, don’t worry about trying to match BuzzFeed’s numbers. You also don’t need — or want — traffic from everywhere. You want to make sure people from your targeted area are looking at your website.
You can use Google Analytics to track your pageviews and website visits.
While pageviews used to be the industry standard for measuring a page’s reach, time on page measures how long visitors spend on each page.
This is important to measure engagement. Is your page “sticky” enough to keep visitors paying attention, reading what you’ve written? Are they finding the information they want? Are you answering the questions they have?
It could be that your audience is only on your page for a few seconds, and then leave. What would it take for you to keep a visitor's attention for 40–50 seconds per page?
Your bounce rate measures the percentage of people who land on one of your web pages, but leave without clicking on anything or navigating to any other pages on your site.
It also measures engagement, and how well certain pages catch people’s attention. Average bounce rates vary by industry.
Having a certain level of bounce is healthy, it means the right people are staying, and the wrong people are leaving. Pay attention to the bounce rates for your landing pages and other high consideration areas. Pages that describe your product or services are critical and will give you a great deal of insight.
If your landing page doesn’t keep visitors on page longer than the rest of your website, and has a high bounce rate (70%+), you should revisit the messaging, visuals and copy.
Maybe you need to make your value proposition clearer, or you need to make your page more valuable (e.g., give away more information).
You can use Google Analytics to track bounce rate.
The Rule of Seven is a classic marketing tenant. It states that people need to see an advertisement seven times before it is effective. While the number may vary in today’s era, the principle has stayed the same: people need to think of something more than once, and consider it more than once, before they pay for it.
In today’s fragmented world, someone might not have meant to leave your page. Instead, they wanted to do business with you, but simply became distracted, left, and forgot to return.
If you see a lot of return visitors compared to the number of leads or customers you're getting, figure out why you think they are hovering and returning, but not biting. This disproportionate ratio might mean you should think about strategies to get them to convert into leads. You could try rewriting your copy, or present an offer of some kind. Gated content is a great example.
You can use Google Analytics to track return visitors.
Conversion rates measure the ratio of people who buy (or sign up) to the total number of visitors to your site. The higher your conversion rate, the greater the portion of your audience who exchanges something (money, email) for what you’re offering. It’s a gauge for your value proposition and how compelled people feel when they visit your website.
If your conversion rate is low, consider your call-to-action, and how well you’ve designed a high intent area of your page. Can people find the information they need?
If you’re in a high-margin, low-volume type of business, you can record this manually. If you’d prefer to automate this, you can set up Analytics to track conversion rate. You could also use Bitly to track clickthroughs to certain parts of your site.
If you plan on using social media as a way to grow your business, you’ll want to track how your efforts are paying off. That means keeping your finger on:
At bare minimum, you should track how many people are following you, and how many of these people end up at your website. This will give you a sense of whether or not it’s worth investing money into various social media platforms.
You can use HootSuite to track how your social media presence is growing.
While these are common, important metrics to keep track of, unless you interpret the data, it will be of no use to you. Use this information to identify areas that you can improve, and get clarity on how to actually do it.
Don’t get too ambitious. Instead, focus on a few metrics and areas for improvement, and knock them out one at a time.