Any time you can take a measurement in your business — any time you can look at something and get a number — the question arises: What number should I be aiming for?
Business benchmarks and metrics are a complicated topic, and the answer to those questions is usually “It depends.”
But what does it depend on? When I’m looking to see whether or not I’m on the right track, I find myself using three “lenses” to look at the numbers in my business.
In this 20-minute episode, I talk about:
Note: February 29 will be a special Q&A episode — I’d love to get your questions in the comments below, or you can grab me on Twitter @soniasimone.
Listen to Confessions of a Pink-Haired Marketer below ...
Sonia Simone: Greetings, superfriends! My name is Sonia Simone and these are the Confessions of a Pink-Haired Marketer. For those who don’t know me, I’m a co-founder and the chief content officer for Rainmaker Digital.
I’m also a champion of running your business and your life according to your own rules. As long as you don’t lie and you don’t hurt people, this podcast is your official pink permission slip to run your business or your career exactly the way you think you should.
Today I want to talk about a question we get a lot, which is along the lines of, “How do I know my numbers are good?”
So this might be about your email list, that’s a common one, but you might also be looking for benchmarks for your membership community, or your bounce rate for your site — anything you can quantify, any time you can take a measurement and come up with a number, will come with that question, “OK, so what’s a good number?”
We can talk about this all day long, and the original script for this was going to be like 70 minutes long, so I’m going to pare it down to three principles or “Lenses” that you want to look at your numbers through. If you want thoughts on how to use the lenses for an individual number, just swing over to pinkhairedmarketer.fm and leave a question, and we can dive into it.
You can get incredibly hung up in an online business when you start chasing someone else’s numbers.
The first reason, I hate to say it, but people lie. People will just tell you numbers that aren’t true. I know, I was shocked, too.
Vanity is a big driver of human behavior. We get in trouble when we underestimate this and think that “only bad people” are driven by a quest for status. Many people, if they have to choose between feeling like a bigshot and being one, will choose the emotional version.
I’m not immune to vanity by any means, and I know very few people are are. (Although I promise I won’t lie to you about my numbers, because I think that’s really destructive behavior for everyone.)
So the first issue is that you might not have the right numbers at all.
The second reason is that online businesses tend to be really individual, even more so in my experience than brick and mortar businesses are. Two businesses that look identical from the outside have very different audiences, different business models, and different factors that are going to make their numbers look very different. Even the same reader will behave differently on two different sites with the same topic. The same person might be a buyer on one site and a looker on the other.
So don’t say, “I want an email open rate of X percent” because you think that’s an industry average. Compare yourself with yourself.
Let’s say you usually have an open rate for your email newsletter of around 25 percent and then you send a message that gets 40 percent, that’s something to look at and see if you can figure out why. And of course, the opposite is also true — if you get a message that the open rate is a ton lower than normal, that’s data that might reveal something interesting.
It’s not the only thing you should look at — for example, if you get a 5 percent open rate but then most of those people go on to click a link to, for example, a sales page, that can be a solid win. But that’s jumping ahead, so before we get into that, let’s go to Lens #2.
You can’t answer the question of “What’s a good number” until you know what the number is supposed to be doing for you. And that can change over time.
Let’s see how this would look for a membership site. This is an online community, for the sake of discussion one that is hosted on your site and not on Facebook or LinkedIn, preferably with controlled access so it’s not a troll colony. It could be paid or it could be free.
Your membership site today might be designed as an enticement to sign up for your email list, so you want to look at the numbers for email — total number of subscribers, and then how those subscribers are behaving. Do they go on to purchase, are they good list members, or did they just grab the freebie and run.
Your membership site might be about revenue — so in that case you’re looking at the bottom line, how many new members and how many renewing members, and what’s the marketing cost of acquiring those new members.
Your membership site might be about community action — so you’re looking at how many community members go out and do the thing your site wants them to do. Maybe it’s registering new voters, or walking 10,000 steps a day. Make sure you have a mechanism to capture that, even something as simple as a forum thread where folks can let the community know what they did that day.
Your membership site might be about support and networking, like a virtual mastermind group. In that case, some of your benchmarks will tend to be somewhat soft — how many “that was amazing” conversations are you having? What’s the vibe? What does the community feel like? Are members reaching their goals?
In that case, you can do like we do in Authority and create a formal celebration process, where you make the time regularly to look for those wins and celebrate them publicly. That helps you keep your finger on the pulse.
Depending on your resources, your goals can be “all of the above” — but you should know which are the key numbers for you, what consultant types call the key performance indicators or KPI, and which are the nice-to-have. Very often, your nice-to-have numbers will serve your key indicators.
That actually leads us to Lens #3.
Search engine rankings are a classic for this — we get so obsessed with the ranking that we don’t think about the big picture. A lot of times content marketers get ultra caught up over where they’re ranking on a search results page before they have their house in order with good content, enough of it, and good user experience.
The two main things I want you to remember are:
#1: Google can be very fickle, especially if you rank for any other reason than you just have a ton of exceptional content that’s widely respected. Rankings can go away very quickly, so if you get most of your traffic from search, please start diversifying so you don’t have a really horrible month or two one of these days.
#2: Search rankings are a step along the way, they’re not the whole thing. Conversions and the general health of your business come first, and if a good search ranking will help, that’s great. Don’t chase a #1 position for its own sake, because that just tends to come with all kinds of problems. Understand how your search strategy is part of your overall business strategy.
I like to say that:
Google bots don’t have credit cards and they can’t purchase your products or services. Serve customers, not bots.
Any piece of data can lead you astray if you don’t do this. For one thing, luck plays a much greater role in business than any of us like to think. Any single number can be a blip. It can be the result of chance, it can be because of a burp in the Google algorithm or a rainstorm in Kuala Lumpur or a social media selfie in L.A.
Business is always an ecosystem contained within other ecosystems. Every element affects every other element. Look at the health of the whole thing, and try not to get overly distracted by natural fluctuations in individual numbers. Look at trends and look at the whole.
If this kind of holistic thinking is what you’re looking for in your business, instead of piecing together the tactic from this one and the tactic from that one, you would probably love
our live event. It’s in Denver, Colorado in October, and it’s always just a crazy amount of fun.
Our CEO Brian Clark puts the agenda together personally, and he structures it so that you have a well-rounded picture of a working business, instead of a shotgun collection of tactics from every speaker who had a book out this year.
If I wasn’t a partner in the company, this would be the one event on my “must-attend” list for the year, and that is the truth, straight no chaser. It’s really that powerful.
Also, drop me some questions! February 29 is going to be a QA podcast, so let me know your thoughts in the comments or on Twitter.