The 5 Types of Metrics Every Small Business Must Track
By John Jantsch
Management consultant extraordinaire Peter Drucker famously said, "What gets measured, gets managed."
Now, while terms like measurement and management might seem like big company jargon, the fact is you can't successfully grow a business unless you track what works and what doesn't work.
I guess I should add you can grow a business without metrics a lot like you can win at roulette from time to time. The question is what is not measuring costing you in terms of wasted money and lost opportunity?
There's an entire industry built around data measurement, tracking, and intelligence. New tools aimed at making analytics for small business owners and marketing a snap come to life seemingly daily.
And while tools are awesome until you fully understand what you should track and why it's hard to gain the benefit of any tool – no matter how wonderful the website makes it sound.
Oh, and I should add – this takes work, and I wish I could tell you there is one tool that will do all of this for you, but as of yet I have not found it!
Below are the five types of metrics every small business must rely on to navigate growth and profit
MONEYThis is perhaps the metric category that is most understood – if only in rudimentary ways. The traditional accounting world isn't much help here, and many of the tracking tools built for this world only tend to confuse.
Newer tools like Xero and Freshbooks are more "real world" friendly and produce reports that can help you guide your business in ways that balance sheets never will. (I've used Quickbooks from day one and in recent years it has gotten better.)
Below are the financial metrics I find important in my business – I highly recommend picking up Greg Crabtree's book Simple Numbers or Mike Michalowicz'sProfit First
There's a lot going out there in the many channels small business owners and marketers find themselves, and it's very helpful to use tools that help you keep track of marketing related metrics.
You might also want to check out this post on some non-online measurement – 7 Marketing Metrics Worth Obsessing Over
This is a space that's getting crowded, but I like Dasheroo (I'm an advisor) and Cyfe and, if you want to pay to sync offline stuff, Domo.
Don't forget a lot of this data can be had with free tools like Google Analytics,Facebook Insights, and Twitter Analytics.
Below are the scorecard metrics I like to keep tabs on.
CONVERSIONI suppose I should start and end here because this the point of it all – figuring our what turns a prospect into a client – but you've got to build the foundation metrics before you can get to this.
Understand that many things are a conversion, not just a sale. When you get this, you start to realize that your goal here is to figure out how to guide prospects and visitors on the journey they want to take. With that in mind, a conversion is an email sign-up, a form completion, a registration, a request for information, an appointment and yes a click on the buy link.
You must get very good at understanding how people move through your website and your business, where they bog down and what makes them abandon the path.
There are some very powerful and relatively inexpensive solutions for this, but the free Google Analytics is pretty good at this.
COMPETITIONThere are many reasons to keep tabs on competitors, not the least of which is you might learn a thing or two from them.
Here again, there are many tools that provide competitive research. Tools likeSEMRush and MOZ can give you lots of information about SEO and SEM – things like keyword ranking, backlinks, and even AdWords spend.
I also rely heavily on a service called RivalIQ. RivalIQ produces very nice reports that show you how you stack up with some basic SEO and SEM, but where it shines is in comparing social networks, social content, and social engagement.
Understanding how your content performs is crucial if you are going to understand how to make it perform better. Understanding how others people content performs, including your competitors is one of the keys to ramping up your content. Understanding how the most shared content performs and why is how you make content marketing a key weapon in your marketing arsenal.
One tool I talk about a lot is BuzzSumo – it's kind of my marketing swiss army knife. (Check out How and Why I Use BuzzSumo)
BuzzSumo is essentially a search engine that tracks how content is shared and how it performs. On top of that is can show you who shares what content and who links to what content. You can find content ideas, influencers, and guest post opportunities using this powerful tool.
But, few people understand how useful it can be for monitoring content. Hidden among the various features is a tab called Content Analysis. Put in any search term, website or competitor and it will produce a report that shows you:
So yes, I know, it was a lot of work just to read this far, but guess what – it's a lot of work for your competitors to set up and track what they are doing so there's a pretty good chance that measurement just might be the competitive advantage you're looking for.
The good news is that once you set everything up once and figure out the reporting you need, it gets a lot easier to run your business. If this seems like a monumental project then pay someone to set it for you – it might be the best money you ever spend.
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