Who Cares? Making Meaning of Metrics (and Sex) for the Solopreneur

This is a guest post by our co-host, Nick Armstrong.
loving your business metrics
This week on Prosperity’s Kitchen, the same question came up time and time again: who cares about all these metrics?

In College, did you care about your edgerank on Facebook? Me either. Mostly because it didn’t exist. You know what metrics I cared about?

How many credit hours I could take without having a meltdown (my “peak conversion rate,” maybe).

How long I could ogle a beautiful undergrad before she noticed (my “time on site,” I suppose).

How many dates I was going on vs how many times I was rejected by aforementioned undergrad (my “bounce rate,” if you will).

You’re absolutely right to feel that the stats you’ve been told are important, must-track metrics have been mismatched when it comes to your specific business needs. Chasing your tail collecting stats someone else says are “useful” has probably been wasteful and frustrating for you — mostly because you don’t know why you should care.

Cool. So, whatever, right? Don’t track stats at all and everybody’s honky-dory.

Wrong.

Let me ask you this: if you had to take your dog on a walk any time he asked, but only if you hadn’t taken him once already that day — wouldn’t you want to track that stat?

Your dog might not be too happy about that, but then again — they have more going for them in the happiness department.

OK, so let’s say you have a certain type of customer come across your site somehow. Every time this certain type of customer comes around into your business, they steal something — your time, your effort, your soul. Isn’t it kinda worth figuring out how they get in so you can identify them before they have a chance to eat you alive?

You should only track the metrics which directly relate to you getting (or not getting) paid, laid, and totally happy. Anything else is a distraction.

Here’s why: your unique situation, business, customers, and goals are what define your must-track stats. Anybody who doesn’t know your business inside and out can’t tell you for certain that one stat in particular is more important than any other.

Aside from a few core numbers which everybody should know — unique visitors and subscribers or monthly purchases, for instance (these are the equivalent of blood pressure and weight of your website) — you’re unlikely to share the same set of “must-track” stats as any other small business.

It gets worse, too. Following well-intentioned advice from “gurus” can land you in a world of analytical hurt. I hear on a daily basis: you must track your bounce rate. My response whenever I hear that I must do something is, and forever shall be: why?

Yours should be, too.

If the only dating advice you took in College was from the Prom Queen, you’re missing out. Does the Prom Queen have to work to keep her dance card full? Hell no. I want dating advice from the popular nerd (yours truly) who made a name without gold-plated jewelry and a fancy title.

But then again, if you’re only tracking dollars in the bank, unique visits between your sheets, or, for the more pure-of-heart among us — kisses from the prom queen, you’re not getting the whole story. Nobody wants to be just another notch on someone else’s bed post… so why do we treat our website visitors that way? Our opt-in subscribers that way? Silliness.

Why Just Tracking Your Bounce Rate (or the stat du jour) is a Huge Problem

One stat on its own is totally useless. Any metric in a vacuum will tell you next to nothing. Worse still, a stat on its own is just one piece in the puzzle. Without more information on the business, the situation, the goals, and the customers, it’s possible to get into an endless and meaningless cycle of tweak-then-measure.

If I tell you that my bounce rate for one of my websites is 80%, what would you think?

In the absence of any other information, you might say, Gee, Nick, that’s awfully high.

But then what? If you follow the typical guru advice, you say “high bounce rate bad” and try to tune it down. If so, what you’d be doing is destroying one of my best defenses against bad clients.

I could tell you that one of my websites just hit 900+ unique visitors per month. You might give me a virtual high five, until I tell you that it’s down from a high of 2,600.

It’s like saying, “I’m a tiger in the sack because I’ve had X sexual partners.” Puh-lease. We need a bit more information than that — like a “length of foreplay” stat or a “previous partner post-coital satisfaction survey” or something.

Size matters — but whose ruler are you using to measure? Your own? And who’s counting?

The combination of two stats to yield new information is called meta-analytics and you absolutely have to know the meta-analytics behind your business to be successful at measuring and interpreting stats.

One-off stats are 100% useless in a vacuum, which is why the traditional advice from marketing gurus is so very frustrating.

Keep Cool, My Babies…

The source of all your frustration: the seemingly unceasing tasks required of you as the part-time Commander-in-Chief, part-time janitor of your business. “You want me to do what now?” is a common refrain in my house, too. I’m told it never really goes away. I even heard that same desperate plea from one of my favorite clients, who coined what I now use as my modus operandi: Action Precedes Clarity.

If you’re too afraid to ask out that cute nerd who likes to read because you don’t know what you’d talk about, you’ll certainly never get to kiss ‘em. Action precedes clarity!

End The Never-Ending Cycle of Stats Tail-Chasing

Let’s put something to rest right away: not every tool will be useful for every business owner. Not every stat or metric will have meaning to your business. Nor will every housekeeping task lead you to revenue.

So what’s a good process for cherry-picking stats without missing something important?

  1. Learn about and understand which metrics are available
  2. Develop situational awareness
  3. Understand your goal
  4. Identify your relevant metrics
  5. Compare and contrast
  6. Modify your plan based on what you know
  7. Update your situational awareness

Understanding which metrics exist to you is important. If you’re on Twitter, you’ve got like… 10 available to you (SocialPing is a good place to start with Twitter metrics). Depending on your newsletter software (I use MailChimp and my dashboard is pretty in-depth), you’ll have a few more to choose from.

Hire a stats geek to walk you through what stats there are available to you, what they mean, and how they work with other stats (the meta-analytics). It never hurts to have a bit of coaching from someone who knows the ropes.

Develop a keen situational awareness of your business: what’s your current client load? What’s happening right now with your bank account? Are you in the black or the red? Are you doing the right kind of work? Are you working towards your long-term goals? Are you on-mission?

If your aim is to get married, tracking only your number of bedded partners isn’t such a valuable metric. Aiming to improve on it certainly won’t help, either.

Understand your goal to understand which numbers matter: are number of customers or customer satisfaction ratings more important? What’s your mission? Are all your tasks in line with it, and are you getting the right messages back from your customers that make sense of it all? (If not, you need to pick better metrics — qualitative and quantitative).

Which stats are important enough for you to take time away from a revenue generating task to tackle? It depends on:

  • What are you trying to accomplish at the moment?
  • What’s the lead generator which will help you accomplish it?
  • Is your current path/plan of attack/call to action working as an effective lead generator?
  • Do you have enough traffic and stability to make the stats make sense?

Modify your plan based on what you learn and your situation. As you go from teenage heartthrob to older, wiser, and cooler — things will change. Are the metrics you’re tracking helping you make better decisions? If not, abandon them. Pick new metrics and start again.

A Fine Place To Start: Google Analytics and Customer Satisfaction

I’ve Captained my business, WTF Marketing, for 4 years now, each year learning about some new “must track” metric and some new “must use” tool. Here’s what I’ve learned so far: with a hub-and-spoke model, whether you’re running an information business, a blog, or a retail-based business, certain metrics will be your bread and butter.

Like Tea said in Episode 3: Metrics, tracking what people click on allows you to identify portions of your website you can remove, bits of ineffective content, even your partners who aren’t pulling their weight. That little black dress not working it for your audience? Maybe they like red better. Test it out.

As another introductory step, ask your customers how your brand makes them feel. How do they feel when interacting with you, what do they feel when they’re using your services or products, and how do you stack up to their expectations? This will give you a good baseline of how folks categorize your business and how they regard your service.

Paid, laid, or happy: if your metrics aren’t helping you make better business decisions, they’re not metrics you should be tracking.

Let me know what your thoughts are in the comments below

Photo Credit: David Chief

About the Author

Nick-biggerNick Armstrong is unapologetically awesome at explaining difficult-to-grasp marketing and technology concepts regarding the web. In his day-to-day work, he helps small business owners swear less and profit more through kick-ass marketing.

For the last 3.5 years, Nick’s business WTF Marketing has amassed a large number of happy clients, among them Fortune 100s, solopreneurs, and everything in between, including three distinct $2M+/year businesses. Leveraging over a decade of web design experience and eight years of hands-on, knee-deep community building and marketing.

He founded the Digital Gunslingers in 2009, teaching $5 classes on social media and marketing concepts and donating all the proceeds to charities in Fort Collins, Colorado. You can connect with him on Google+Twitter, and Facebook.

Comments

  1. Tammy Vitale says:

    Ok – I would argue knowing when to take the dog out isn’t a metric if you love and know your dog. It’s a communcation. Non-verbal. And possibly intuitive. Which I like and would like to see more of on the human level (not that I want to be responsible for taking anyone but my granddaughter to the bathroom as needed).

    • Tammy – if your dog is anything like mine, you’d never stop going on walks :-)

      But I totally agree with you, the scale of your measurement – what it means, what it reflects, how to tune it – that’s 100% personal and varies business to business. More of a focus on the qualitative would bring about some serious improvements in a LOT of different businesses, to be sure.

  2. Linda Griego says:

    Damn…that was a lot of indepth information Nick! Your sense of humor is at the ‘top of the scale and it definitly helped here with you trying to explain trhe meaning of metrics. Thanks! I’m sure questions will follow.

  3. I got enough nuggets from this article to finish my mission strong! May have to consider hiring a stats nerd. Totally worth it.

    Because I didn’t know how to begin, or what I should be looking for, the idea of analyzing metrics made my head spin :/

    Now I have a clear concept of what this whole metrics thing is all about. Can’t say too many programs are covering this material (and believe me, I’ve looked!) They often just have you outsource it, but having a clue about all this just makes me, as an entrepreneur, more focused and savvy.
    I’m off to measuring…

    Thanks rocking this one, Nick!

  4. Nick, I’m with you on the whole slamming the door in the face of people who aren’t your ideal customers bit. To take it to your excellent sex example, more partners COULD mean they were just really bad and no one wanted a second go around. (tons of visitors, but no conversions) There’s also people who are like “OMFG YOU ARE AMAZING!” and become a repeat customer of sorts, because it’s so good they don’t want to leave.

    I see a lot of people who’s exit page is my pricing page. It got me down for a bit, but then I thought about it and either a) they’re doing research, since a wedding planner is something people do a lot of comparisons for, or b) if they don’t want to pay my completely reasonable rates, they aren’t a good fit anyway.

    • Thanks Ang!

      Absolutely true: you could be WOMG amazing but be a one-off service (you don’t need TWO jewelers for your wedding ring) for the most part.

      One thing to consider when people are on your pricing page: ASK THEM what they think of your prices. “Do my prices seem high to you? Call me and let’s talk about it. I develop custom packages all the time…” or some similar call to action can help you snag the business that would otherwise walk away. It can help when biz is slow. When biz is good, you can turn more of those kinds of people away.

      But never take less than what you’re worth unless you’re too broke to buy ramen!

  5. Well, now you’ve done it, Nick! I don’t know if I’m more in the mood for uncovering which metrics are right for me …. or crawling under the covers and figuring out my “length of foreplay”. Darn! Decisions. Decisions. You’ve made both activities sound like tons of fun. LOL!

    Joking aside …
    This is one of the very BEST and MOST SENSIBLE AND LOGICAL pieces I’ve read on the topic of metrics. Thank you. Two thumbs up! :)

    • Haha, they should be fun. Not everything in working for yourself is, but if business isn’t at least a little fun most of the time, you’re not doing it right :-D

      Thanks Melanie! :-D I really appreciate you stopping by!

  6. Nick this post rocked! As a person who often works with people who are resistant to numbers, finance, metrics, etc I know the importance of giving real world, practical explanation on the WHY. One of my personal pet peeves is people who throw around single statistic with no context whatsoever. It may make a great sound bite but it won’t help your business and may even hurt it.

    • Thanks so much Nicole!

      I’ve been teaching the wonders of meta-analytics for years to folks who took Google Analytics classes from me. Everybody always asks the same three questions: 1) Why do I care about bounce rate? 2) How do I use these to get people to buy from me, and 3) Why should I care?

      Yikes!

  7. Confession: I haven’t checked my Analytics in … um … when was Christmas, again? Before that. True story. When I first started, I checked those puppies HOURLY.

    • They may just not be that important to you, at the moment, Annie!

      I suspect you’ll want to start tracking eventually, though. It’s worth knowing where you’re at so you can see where you’re going :-)

  8. “The combination of two stats to yield new information is called meta-analytics and you absolutely have to know the meta-analytics behind your business to be successful at measuring and interpreting stats.”

    THIS I agree with! :-) :>

    Btw, if anyone is looking for someone to help them with that choosing-of-the-metrics, I definitely recommend Nicole Fende, the Numbers Whisperer(r). She has a wondrous way of helping you swim through the sea of numbers and come up with the few (with her you get five and only five!) that will give you the biggest bang for your buck. (In whatever way you want to take that. :-P :> )

    “Keep Cool, My Babies…

    The source of all your frustration: the seemingly unceasing tasks
    required of you as the part-time Commander-in-Chief, part-time janitor
    of your business. “You want me to do what now?” is a common refrain in
    my house, too. I’m told it never really goes away. I even heard that
    same desperate plea from one of my favorite clients, who coined what I
    now use as my modus operandi: Action Precedes Clarity.”

    Thank you for the reassurance. :-) :> It’s good to know that such things not going away is not a sign of anything more than life. :-) :>

  9. Several things stand out from this excellent post Nick, one, you can’t measure anything accurately from one stat alone without measuring it against another metric or perhaps more. Perhaps most importantly what I glean from this post is that measuring is only meaningful when you the metrics align with your purpose.

    We once did an exhaustive analysis on the various bits of collateral we were producing for clients. They ranged from the ubiquitous 6 panel flyer to 48 page Annual reports and included branding and websites in between. What we discovered was that the 6 panel flyers took about as long to do for most clients, who were looking for a one off business promotional solution equivalent to their personal Bible in those packed pages of landscape, as did a 48 page Annual report. No prizes for guessing which one paid substantially better on an hourly rate basis.

    So we became Annual Report specialists. We made better money by far, but we weren’t happy. The point of this was that we used money rather than purpose as the metric by which we made the decision. By the time we had worked through that lesson, things had changed again. When I reflect back on this, the core lesson was that we weren’t running a purpose-led business on either front.

    So I believe your most important question is what is your mission and do all your tasks align with it? If so, then the metrics you use to measure your success are greatly more relevant.

    • Sandy – absolutely. Meta-analytics are some of the most important numbers you’ll ever discern about your business (and life, in fact – the same holds true outside of the marketing realm).

      It’s funny how completely different people in completely different businesses and completely different situations all lead to the same exact lesson: being on purpose is the strongest indicator of happiness and success that you can find.

Speak Your Mind

*