Do our Business Metrics Matter?
Many of us spend our extremely limited time and energy trying to track our way into finding answers to our problems. We convince ourselves that in order to successfully grow our businesses we need to be tracking X, Y, and Z. We need to keep up with our Twitter and Facebook feeds as well as continually expand our list of “friends” and connections.
These issues come up at least once a week during discussions with members of our Northwest Freelancers Foundation. As freelancers and independent workers, we obsess over the notion that because something produces data, then it must be important and we should be tracking it. We end up with a list of services and subscriptions that really don’t contribute any positive value to our businesses.
Take an inventory of the metrics you track. Now, take a look at your list and ask yourself any of these questions for each metric:
What can I change now that have this data?
How does this contribute to my business?
Does this really matter?
The most important asset we have as independent workers is time. Time makes or breaks us. Sure, money is important too, but money can be earned when time is properly invested. Time has only two outcomes: you either lose it or you invest it, but you cannot regain lost time like you can lost money.
The internet and accompanying services have made it extremely easy to waste time. We constantly scour the web to find that golden nugget to re-tweet and share on Facebook. We create clever snippets that sound catchy, embed our shortened URL, publish and wait for the results to come in. We make it simple for visitors to subscribe to our newsletter or RSS feed, then we check on our new sign-ups and give ourselves a nice pat on the back. We check how many visitors our site had, where they are from, trace their source, and compare the numbers from the day or week before. A job well done.
The problem is that most of us are attempting to relate metrics such as site traffic, re-tweets, sign-ups, bounce rates to important things like sales, new accounts and even general interest in our services. Instead of delivering services or increasing revenue, we just chase ghosts and waste our time.
Metrics are important, don’t get me wrong, but the key is to focus on the few metrics that matter. Track metrics that have actionable outcomes. Add special offers to your tweets and blog posts so you can track sales or sign-ups directly generated from your offer. Use a funnel analysis to find out why people are leaving your site instead of requesting a quote or continuing through a sign-up form. These are generic examples but you get the idea. Track the things that matter in ways that directly impact your business.
Use your metrics to grow your business, not to give yourself a pat on the back. If your metric isn’t actionable then it likely isn’t very important either. Define your goals, define their values, then define your metrics. Invest some time this week to audit your metrics and define what matters.
What are some business metrics you use?
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Justin Knechtel is the Founder of The Small Potatoes, a non-profit design collective as well as the Executive Director of the Northwest Freelancers Foundation, a Seattle based non-profit dedicated to providing the tools, resources, and education freelancers need to grow their businesses. He just started using Twitter so go say hi @JustinKnechtel.