Define Your Key Performance Indicators
All right, here we go. We're going to get into some stuff today. All right? Here's our goal. Identify what metrics to follow. To ensure the success of your business, identify what metrics to follow to ensure the success of your business. How many of you pay attention to any kind of metric on a daily basis? Okay, a couple of you? Yes, I think probably the online audiences thinking pretty much the same thing. Uh, some people are real numbers. People really detail oriented, um, and can get excited about the metrics that they have other people. I have fallen into this camp before I could get really obsessed with numbers. And so sometimes I check out on the numbers for a while because they take me down the wrong path or they waste my time. But we're going to talk today about the metrics that are actually important, um, and the ones that were important to you because the ones that are important to you might not be the ones that are important to me. But before we get into that, let's take a l...
ook at what we did in the previous lesson. Lesson Businesses that stand out are clear on what's important to them now. Originally, way back in Lesson three, we talked about this in terms of personal values, but in the previous lesson we turn. We talked about this in terms of response. So what responses motivate you and inspire you to create new work, to do your best work, to do work that's unique to you and to move your business forward? Businesses that stand out are clear on what's important to them. Directing your prospects. Actions keep you on track and focused. One of the ways that we can get off track is by paying attention to things that don't matter paying attention or worrying about how other people's businesses get their customers to respond. You know, worrying about you know that well, my, my people don't do this or my people don't do that. How can I get them to do more of this or that? Maybe that doesn't matter to you. Maybe it's not important. Just because one person sets their business up in a way that elicits a certain response doesn't mean that your business has to set itself up that way. Let's first talk about vanity Metrics and I hinted at this in our in our previous lesson Vanity metrics. And this is the This is a term that was, as far as I know. Coined by Erik Reece, the lean startup vanity metrics are those numbers that we pay attention to that don't actually tell us anything about the health or success of our business. And one of the reasons this is important and lean startup world is because startups are notorious for concentrating on metrics that mean diddly squat, you know? So maybe it's new free users. Well, you don't know at the beginning how many free users they're gonna turn into page users. And so maybe it's it's a vanity metric for you. Uh, maybe it's page views, right? Website clicks don't mean anything if those website clicks aren't turning into the actions that make your business successful. Um, you know, it could be all sorts of things. What are some numbers that you guys have tracked in the past that have turned out to be unimportant? Vanity metrics, Melissa. Social media following. Yeah, Social media followers. Yeah, that's another big startup. Bumble too, right? Is what we've got 100,000 followers on Twitter. Great How much revenue do you bring in last year? Zero. Okay, let Z talk about that in your billion dollar valuation. Um, other vanity metrics. Yeah. Michelle Block post comments, log post comments. Yeah, absolutely. If you don't see block Post comments turning into the people who are commenting turning into customers, that's a vanity metric. It doesn't really mean anything. Uh, you know, for me, a lot of times the people who are commenting were on my block were awesome members of my community. Maybe they were brand evangelists. There were people who got really excited about what I was doing on drily liked talking back. But I very rarely saw those comments turning into the kind of clients that make my business really successful. Those kind of clients would like really low. They might be on my email list. In fact, they were probably on my email list, but they weren't tweeting me. They weren't facebooking me. Ah, lot of them weren't even emailing May, And then all of a sudden they would decide this is my time and they pull the trigger. Either they'd schedule a session with me or they'd sign up for one of my programs. I had no idea that that they were there, and then I got really excited like, Whoa, where have you been? And thank you so much. And I'm thrilled to work with you. So yeah, block comments or another Really, really great one. Um, Facebook likes is the one that I always come back to is that's a big vanity metric now. And I even say that having putting right now a lot of attention on my Facebook page, Um, it's something that I'm enjoying experimenting with. But I also know that if I can't measure the things that actually count, then it doesn't. It's not helping me. So I'm doing two things. I am tracking some of those things that it would be more like vanity metrics like New likes to my page or likes on Post. But I'm also pairing that with an ad strategy that allows me to track conversions. So then I know when those increased Facebook likes are actually leading to dollars and cents, and when they're leading to email sign ups and those, there are two necessary responses air to non negotiables. Your business must be driving new email sign ups and purchases And so I could balance those two things I could turn. What could be a vanity metric into something that's actually, um, you know, driving the success of my business or contributing to the success of my business. So what actually counts what actually counts? We've talked about two, and this is going to go for everybody. You need thio be defining email sign ups and sales as performance indicators of your business, because if you're not driving sales, you're not making money and you won't be in business for long. And if you're not driving email sign ups, you're not building new prospects. Your it's essentially it's lead generation, right? And if you're not generating new leads, if you're not bringing new people into your business, then there won't be more money to give make sales and give you money later on. That's a problem. So those were the two things, but there are other. There are other metrics. There are other numbers that we can track that really count towards the success of our business. Some of them happened before the sale, and some of them happen after the sail, and ideally, there's a sort of cycle that happens where there's metrics or indicators that I track before that sale happens, like email subscriptions. And then there's metrics that I track after the sale happens. So, you know, client results or customer results or referrals or even tweets. You know, maybe someone signs up for your new low price service and they tweet about it. Uh, that could be that could be something that pulls people back into that loop, right? And so if you are concentrating on getting those metrics higher, presumably higher is what you're looking for, not something like bounce rate, where you're going lower, but we'll use higher. Then. If you're making those those numbers higher, then that's going toe output on the other end in making your bank account higher. Yes, good. Do we want that? Do we want more money? Okay, good. Okay, So key performance indicators are the metrics, the count, and you don't have to track everything. I don't want you to think that Oh, gosh, Terror is giving me this crazy amount of homework to dio in my business every day or every week or every month. You don't have to track everything you want to track those few metrics that really, really means something. Those things that you want to be able to push the needle on so you can get more results out on the other end. So let me give you some examples and we'll start with my business in Kickstart Labs, which is our membership community. It's Ah, it's a support community, a resource library and access to me for a monthly fee. The goal is to be a non going resource and support community, which means we want members to stick around. It's not about buying in for a month, getting what you need and getting out because getting what you need, the reason that you wanna be there is for ongoing support, ongoing community access, ongoing access to me and I'm going access to our resource is the goal is longevity both for me, and I want my my customers goal to be longevity as well, because I want them to be in business and I want them to be continually improving their business for the long term. So all of our metrics look at how to get people to stick around. So, yes, we measure new subscriber, So every week my assistant goes in and looks on makes a tally for me, so I don't have to pay attention to it on a daily basis, because this is something I would get stuck on or obsessed with. So she goes in and she looks at the new members and says, Okay, we've got five new members this week. We have 10 new members this week. Maybe this week we'll have 50 new members. That's this week 50 new members. But we also measure new conversations. So part of the community is a Google plus community. Or at least it is for now, where members can talk back and forth to each other. They can get advice from me. They could get advice from our community member and get advice from other members on dust kind of trade back in back and forth. Information. It's awesome. So we actually measure how many new conversations take place on a weekly basis because we know that new members stick around longer when they're engaged in the community, and the easiest way to get people engaged in the community is to give them regular reminders that were there. And the nice thing about Google Plus is that every time a new conversation starts, most people are getting a notification to their Gmail box or that little red circle in the top part of their screen. That that, you know, there's something new toe look at in this community when our customers, when our members stay engaged, they stick around longer when they're not engaged, and that monthly fee comes out of their account. They're like, Oh, I really need to cancel that. I haven't used that at all. So we want to make sure that we are pushing the needle on getting them engaged and making them want to stick around. Makes sense. That's a really simple, really relationship driven key performance indicator. Okay, now let's look at one of my other boat. Lisa. Yeah. So do you also measure like the level of engagement within the posts? Like we don't track that one? We could, um that would absolutely be interesting. We have a pretty consistent level of engagement. Pretty rarely does anyone post and only get one or two responses back. And when they do, it's mostly like, Oh, you've answered that question. Thank you so much. Or like Oh, that was That was exactly what I needed. I'm I'm regularly really impressed with the level of engagement on each post, so it's not something that we felt the need to track right now. But it's it's something another thing that we can do to varying degrees and we're working on improving this is that, uh, inside our members area. On the website, we use a woo plug in called Sensei that allows us to track how far people get in. The resource is that we have on the site. And so that's something else that we dio is. You know how many people are finishing these things? How many people are starting new courses on a regular basis? How many new courses are they starting on then, You know, as time goes on, because we're always fiddling with these things, so sometimes we contract certain things, and sometimes we can't. But as we, as time moves on in the community, grows will be able to make relationships between how many new courses someone starts or how far they get in courses, and how long that there are new member. Because with membership sites, turnover is one of the biggest problems that you have to look at, and we actually track that as well. So it's not just new members but current active members s so that I can see where we're going up and down, where there's attrition and when there's growth on DSO knowing what your cycle on the average customer is or knowing for us knowing what your cycle on the average customer is is really important, because then if we can extend that, then we make more money, right, and this is that. It's funny. Even that statement makes me feel a little uncomfortable because I don't want anyone to think that they're being reduced to numbers, and this is something we all have to think about. Uh, just because you have a relationship based business doesn't mean that numbers aren't important. You can track numbers and not feel like you're reducing your customers to being a number. I don't want anyone to feel like a number. That's why you know you can tweet me and I'll tweet you back. That's why you can You can come here and I'll I'll talk to you and we'll talk more over the brakes. You know, I don't want anyone to feel like a number, and numbers are a key way that you could drive success in your business and understand what actually makes you successful. So let's look at another example in my quiet power strategy program. The goal is to help clients double their revenue and earn, and for us to earn referrals back to the program. Referrals is one of the major ways that we get people back. And so we track this by measuring homework completion and client revenue generation. So, in other words, not I'm not tracking my revenue generation. I'm tracking their revenue generation. The more people that hit the $8000 plus or more mark during a certain period around the program, the more I know they're likely to refer back to the program and be highly satisfied with their experience. That's sort of like the threshold, and so I'm I'm constantly looking at that number, but we also measure homework completion, and one of the reasons that we do that is because I coach that program at a high level now. But I have three coaches that work underneath me, and so they each have a group of clients. Um, s O. I want to know who I can't keep track of. Everybody. I have a relationship with everyone because I talked to them on the phone. Uh, you know, every week. But I can't keep track of everyone's homework completion. So we have a spreadsheet where we track this out and we look at okay. This person did this homework. This person did this homework. This person did this homework. And not only that, but you know, this was the ah ha moment that they had or this was the insight that we came up with. That helps me create a better experience, but it also helps me. No, you know, it's It's an indicator of the success of the program and how satisfied people are inside of it. Yeah, so we want our clients to do the work. But we know they refer mawr when they get results, too. So and that's what this is all about. It's all about the cause and effect key performance indicators, air about cause and a fact. So if I know my clients refer MAWR when they get results like generating more than $8000 in unexpected revenue are unplanned revenue because of the program then I want to help us. Many people get $8000 or Maurin unplanned revenue in a certain period of time because that's going to set me up really well for the next watch. And it works really well. Okay. Eso to six figure launches later for this program. I think I think we're doing okay. So what metrics can you follow to ensure success down the line in order to figure out what metrics you wanna follow, what metrics you want to track To ensure your success? You need to know what that success is. So you wanna look at what some of your goals are And these air little goals were going to set one big goal later in the session. But for now, let's look at little goals. So think about your products. What goals do you have for your individual products? Do you want to keep people around longer? Are you looking for new sales? Are you looking for consistency and sales? Are you looking for the success of individual launches? Where maybe you've got two big places where sales coming here? Other people, The success for them is consistent. Predictable revenue from their products what constitutes success for each of the products or offers that you make. Then think about your marketing and outreach. What constitutes success for your marketing and outreach? Is it new emails? Sign ups? Is it more Twitter followers? Because new Twitter followers doesn't have to be a vanity metric? If you've got a way to turn that into sales, then by all means do that. Maybe it's active participation on a webinar. You know it's It's pretty standard nowadays that if you get 1000 people to sign up for your webinar, you'll get about 150 to 200 people to actually show up. And then I would say That's on the high end. So about 15 to 20% of people that sign up for a webinar actually come out. So maybe one of your metrics is that you wanna push active engagement on your webinars, and so you're gonna say, Alright, my baseline of success is 20% but I want to hit 25% because I know with that extra 25% I can convert this many more sales. Do your head's hurt yet? I hope not. Okay, good, Lisa. So when you look at the email sign ups like I have, say, a five day little program that they go through and so and that then leads to a A sale, like a possibility of a sale. So do you track that they finish like they open all the five days? Or do you track just the sale at the end? Eso again. You're gonna want to choose what you follow. Yeah, you're not gonna be able to follow everything. So what I look for with my auto responders sequence is just the open rates for each one. And it might be it might be more helpful for me. Thio look at, uh, in aggregate. So being able to say, uh, you know, 10% of people finish the whole program and be able to change things like that. It's not something I'm working on optimizing right now. I feel pretty good about it. Um, if it's something you're working on optimizing, then you could go much deeper into the numbers and start experimenting with more things. Eso That's what I look at in terms of email sign ups. Everyone should know what their conversion rate iss. So your conversion rate is how many people visit your website or visit a particular landing page and then convert to an email subscription. How many of you guys know what your conversion rate is on your website or for a particular landing page? All right, so that's something. We're going to change that. Everyone write that down right now. One of your key performance indicators is tracking some conversion rate to your email list. For me, the main one I track is on ah, landing page or multiple landing pages because landing pages is something that I can push the needle line. It's less easy for me to just get Mawr page views. So like sending Mawr people to my home page and getting maybe them to click to click through, Sign up for on my the newsletter Sign up. That's there. What I know works is that when I send X number of people to a particular landing page, 45 to 55% of people that go to that landing page end up on my list. I have really good landing pages. Andi, I know that because I track it and I make adjustments, right? So that means that then if I'm twittering or facebooking orp interesting or just telling you, Go to terra gentility dot com slash quiet power and you can download the free quiet power strategy map so you can give your business direction and strategic vision. I know that for every 1000 people that go there, 500 of them are going to end up on my list. Wouldn't you like to know that? What don't you like to be able to say Okay, today? I drove 50 people to that page. Tomorrow I'm gonna go for 75 because then you're going from sign ups on one day to 35 sign ups on the next day. Would you like 35 sign ups? New sign ups on your list? Yeah, Okay, that's how this works. It's really exciting, Andi. There's very easy ways to track that. I'm not gonna get into that today. Um, any You can google Google analytics. You can Google Google Analytics help, and they will. You'll find lots of tutorials for setting up goals in your Google analytics. Another easy way to do it is just with thank you pages and using like your built in stats on your website. So, you know, wordpress, uh, comes with jetpack and that has site stats in it. And you can track how many people go from your landing page to a thank you page. Okay, lots of lots of information out there on that. I just want to give you the idea that that's something you want to be doing. All right. I want you to think about sales conversations. What are your goals in terms of a sales conversation? Is it? How many people that you want to get on the phone with you? One on one in a free consultation? Is it? How many new people you want on your list before you enter a scaled sales conversation? In other words, a launch. What are those metrics that help you determine whether its sales conversation is going to be effective or not? For each goal, decide on a KP that measures your progress toward likelihood of achieving that goal for each goal, decide on a KP that measures your progress toward the likelihood of achieving that goal. Yes. Can you restate that sales conversations piece? Yeah. So, sales conversations. You could do this? Uh, lots of different levels. So one really easy way is how many requests for free consultations do you get if you If you're a business that does free consultations, then one K p I you should be tracking is how many requests or how maney free consultations that you're doing. And then how many of those results in sales? Because sales is a numbers game. When you get a system for sales or even before you have a system for sales, you can still predict how many leads turn into actual sales. And then you can figure out how many leads you need to be generating to get to your revenue goal. All of these things tied together beautifully. Now you can do the same thing. Um, so when I have a sales conversation, it's most likely going to be at scale. In other words, I'm gonna have a sales conversation with my whole list or with a segment of my list. And so I have a goal and a metric that I'm following at, uh, leading up to every launch to get a certain number of new people on my list, because I know that some people in my program are gonna come from new people to my list and some people are going to be the old people. I'd say it's probably about 50 50 really? So I want to know that, Aiken, that I can count on those new people as well as the people who've heard the sales message before. Does that make sense? So those would be the two ways that I look at it. I'm sure there's there's other ways as well. But there's the ways that were coming to me right now. Thank you, Yeah. So let's look at some other examples here. And this is Jennifer Wilson. She runs a site called Simple Scrapper on She is a quiet power strategy alum. She pays attention to churn rate, so simple Scrapper is a membership community where people could go and get re sources and tutorials on scrapbooking on. DSHEA is very successful and she runs this great community, and it's really well differentiated from other things in her niche. But she pays attention to that churn rate. How many clients, how many customers, how many members are leaving on the average month and how or an in any given month and how many new members is she getting? Because she knows if she keeps that churn rate down, she doesn't actually even have to go out and do outreach to get his many new members. Or the outreach that she is doing counts MAWR because MAWR members are sticking around. That makes sense. Okay, this is Phyllis Wilson. She has AH website called the Wise Woman's Path. Phyllis pays attention to subscriber conversion rate and the length of time it takes new clients to book an intro session. After signing up, she actually had a whole list of metrics that she gave to me, and I was super super impressed. So Phyllis Wilson, if you are listening kudos again. Um, but that's so subscriber conversion rate for her, uh, she then tracks How long in the auto responders Siri's or how long on her list? Someone has to be toe book that intro session because she knows that she can shorten that period of time that each one of those subscriber conversions essentially counts mawr. It gets her closer to her goal, and so, by pushing the needle on one, she can push the needle on the other, one that eventually ends up in dollars and her bank account. Smart and Phyllis is a great example here because Phyllis is running kind of a new, intuitive, wise, business spirited business mentoring for creatives, coaches and healers. This is a relationship based business. But just because it's relationship based doesn't mean that conversion isn't important. And optimizing her business for conversion is important and optimizing your business for conversion or tracking numbers so that you know that when you're putting effort into your business that it's actually creating results. You can't just hope people pick up the phone. You can't just hope they email you. You can't just hope they're gonna hit that big blue by button. There's a big blue by button on the screen right now. All right, so you want Thio, make sure that you're tracking the right numbers. What you pay attention to gross. When you take the time and energy to pay attention to a particular number, it grows. Why? Because when you're paying attention to it, you're naturally going to start choosing actions that push the needle on that result. That is a great way to direct your day today. Action in your business, so your key performance indicators are part of your standout style because your key performance indicators focus your actions. They help you create that focus that people pays attention. Thio that people pay attention, Thio, they help you, Uh, you know, God, they help guide your actions for things that you are most effective at. And when you are effective, people pay attention. So key performance indicators even though they're this kind of really business see inside your business kind of thing actually help you stand out by virtue off what they direct you to dio in your business.