During the webinar I did yesterday with my friend and colleague Chris Brogan, one of the most popular questions was, “which 3 metrics should you pay attention to?” There are two answers to this question.
The short, convenient answer is that you need sales to drive revenue. You need leads to drive sales. You need audience to convert into leads. Those are the three most basic metrics that power every business, B2B or B2C, with the exception of businesses that call a sale something else. (for example, churches call them parishioners, who tithe money, which is fundamentally still a sale for the purposes of paying the bills and keeping the doors open)
However, what these three numbers are not are metrics, at least not in any actionable sense. “Get more leads!” or “close more deals!” may be imperatives that management says are important, but how you do that requires a great deal more investigation. That’s why I generally break up metrics into two categories, objective metrics and diagnostic metrics. Objective metrics tell you if you’ve hit a goal, while diagnostic metrics tell you how you’re doing at reaching those goals. Let’s look at an example:
Here we see the objectives, more audience, more leads, more sales. We also see the things that lead up to each category. In Audience, we can see things like newsletter subscribers, social media followers, website visitors, etc. and these are diagnostic metrics that are actionable. We can do something to get more website visitors. We can do something to get more newsletter subscribers. In audience, we see leads that are qualified, unqualified, or not ready to move ahead. We can also see which characteristics of leads are not qualified, and that can help us focus our efforts. Maybe leads don’t have enough budget, in which case you need to change where you’re getting your leads from. Maybe your leads have no timeframe, in which case you need to ask screener questions to better assess where people are in the buying process.
Once you’ve ascertained what diagnostic metrics you have available that lead up to your objective metrics, you need to do a basic correlation analysis to see which of the diagnostic numbers most strongly correlates to the end goal objectives. Which lead source, which audience pool, correlates with the most number of qualified leads or the most number of real sales opportunities? Then you test for causality. (correlation is not causation) If you increase your generation of, say, webinar leads, do you see a corresponding increase in qualified leads or sales opportunities? If so, then you know that webinar leads is a metric that you should pay attention to, and it’s a gas pedal you can push if your funnel isn’t full enough. Do you see a corresponding increase in sales from a bigger email list? If so, then get more people on your list and see if sales moves up proportional to list growth.
This sort of metrics analysis isn’t rocket surgery – it’s just a lot of tedious, hard work. Do it well, and you’ll know exactly which diagnostic metrics are contributing to your end business goals.
Want to read more like this from Christopher Penn? Get updates here: