3 KPIs you should track to make sure you’re not wasting your time
As an entrepreneur, it can feel like your day-to-day is a sweat-inducing exercise in what to focus on next. Should I write new copy? Work on my product? Talk to more customers? Research for my launch?
Randomly jumping around can FEEL like you’re moving the needle. But how can you actually know?
By looking at your numbers. Or in MBA parlance: your key performance indicators.
Not long ago, I treated my KPIs like I treated my credit card bill. I kept that Chrome tab CLOSED and hoped for the best. I once went six weeks without so much as glancing at my most important metrics.
It got so bad, I used to deep clean my apartment as a “productive” excuse to avoid keeping track of this stuff. But eventually, I wised up and as a result, my revenue doubled from 2015 to 2016. And for 2017, my goal is even more growth:
It was painful at first, but I credit it with getting my business on track. Knowing my business KPIs helped me FOCUS and not waste my time on stuff that didn’t matter.
So, I’d like to share the metrics I focused on, show how they helped me focus, give tips on how to improve them, and provide a template spreadsheet that you can use to begin this process TODAY.
The 3 business metrics that keep you on track
Your KPIs don’t need to be a dry, convoluted spreadsheet that you spend hours updating. For an online business, you can pull this off by only monitoring three metrics:
- Opt-in rate
- Site traffic
- Total sales
Can you track more? Yes. But these three are enough to help you focus and make the best use of your time, especially when it’s just you early on.
For each one we’ll look at what it is and how to move it in the right direction.
1. Opt-in rate
Your opt-in rate is the percentage of website visitors that end up signing up for your email list.
I track my opt-in rate by comparing my monthly unique visits and dividing that number by my monthly new email subscribers. I use Google Analytics to get my unique visits, and I use my email service provider to get my subscriber count. (In this example I’ll be using ConvertKit, though any email service provider should be able to do this for you.)
The process is simple: in Google Analytics, I make the date range go from the beginning to the end of the month I’m measuring (see below) and write down the “Users” number.
This view is of my April 2017 statistics. You can see the same for your site in your Google Analytics dashboard. Notice the date range in the top right corner.
To get my monthly subscriber count on ConvertKit, I simply segment by opt-in date, and I make it go from the 1st of the month to 12 a.m. on the 1st of the following month. Again, services like MailChimp and AWeber can also provide this info.
Once I have those two numbers, I divide the number of new subscribers by the number of unique visitors:# of new subscribers / # of unique visitors in the same time frame = opt-in rate
In the case of these screenshots for April 2017, I netted 509 subscribers with 11,808 unique visitors = 4.3% opt-in rate.
Why it matters
While most entrepreneurs get enamored with chasing traffic, it’s important to first make your site as efficient as possible when it comes to converting visitors into leads.
A bad opt-in rate will make you feel like you’re spinning your wheels. You write more guests posts and run more email campaigns yet your leads don’t seem to budge.
A good opt-in rate is like having a force multiplier that makes all of your other efforts have a direct impact on leads, and eventually, sales.
Improving your opt-in rate
Most of the tactics to increase opt-ins focus on building user trust by making sure the calls to action are clear, and that after clicking one, users see what they expect to see. Sounds simple, but any sort of surprise can send them to the back button.
In my case, my opt-in rate was hovering at around 3.5%. So I looked at some areas where reader expectations may not have been met.
For example, I had the very same ebook on my site for years; it was the first gift (or “carrot”) I ever created for Introverted Alpha. Yet it never seemed to gain the traction I wanted.
So, I decided to make the experience as constant as possible with the hopes of pulling up my opt-in rate. I showcased it in a clear and compelling way in my menu bar:
When a site visitor clicks, it takes him to this new opt-in page, with the same headline as the menu item they just clicked, so it’s a continuous experience for them. Again, the expectation matched the result so they were more likely to continue.
Simple, yet since I added this page to my menu bar a couple weeks ago, it’s gotten 351 visitors and 130 opt-ins at a 37% conversion rate — which pulled up my entire site’s opt-in rate to around 4.3%. Not bad!
2. Site traffic
Once you get your opt-in where you’d like it, you can focus on monitoring and growing your traffic. You likely know how to find this information already. For me it’s as simple as using Google Analytics and looking at that “Users” number that we pulled earlier.
Why it matters
Traffic is the lifeblood of your business. After all, people can’t buy from you if they never know you exist. But not all traffic is created equal.
Bad traffic is the kind that comes to your site and doesn’t opt-in or buy. For example, my site targets men. If 100,000 women came to my site tomorrow, it likely wouldn’t make much difference.
Good traffic are the people you’re targeting, the people who are most likely to buy.
Improving your “good” traffic
There are tons of tips out there for getting more traffic. Where should you focus your efforts? How do you make sure you’re targeting the right people and focusing on the right thing?
I started to see real movement in my traffic efforts only after I collected more information from my buyers. Notice I said “buyers” and not “visitors.” After all, I only want people who could potentially purchase.
So whenever I got a customer I made sure to ask him how he heard about us. This way, I learned where to focus my efforts and knew which levers to pull when I wanted to increase traffic and thus, sales. Ways you can do this:
- In their purchase confirmation email include a line or a P.S. like “Respond to this email and let me know how you’ve found me. I’d love to hear!”
- Include a field in the checkout process that asks where they heard of your business.
- Or, if you’re like me, and have customers request a consultation before buying, bake the question into your form:
Note the last question that asks how they found us.
However your sales process works, be sure to ask for this information when they first engage with you, when their willingness to share is high.
I like to gather all of their answers in a spreadsheet, so when planning my next quarter I can see where my time is best utilized.
Only after knowing the results here can I determine my strategy for acquiring new customers. As you can see, my number one controllable source of traffic is SEO and that’s where I’ve focused most of my new efforts. Without this info I would try to increase traffic with things like social media or guest posts, things that don’t seem to result in customers for me.
3. Total sales/revenue
Once the above two are being tracked, it’s time to monitor total sales to see the impact of both. You’re probably already doing this, but it’s important to use your sales reports as a bellwether for how you spend your time.
Why it matters
Sales are how you pay your rent and the ultimate metric. Again, not all sales are created equal (notice a theme?).
Bad sales come from people who slip in without being the right fit, sometimes requiring a lot of additional assistance only to later ask for a refund because their expectations weren’t met. These sales take a lot of time for little reward.
Good sales come from lifelong customers who give you constant feedback and actually use your material to improve their lives.
Improving your sales numbers
When I first set out to increase my sales I was a bit overzealous. My business helps introverted men get dates. At first, I had next to no filters in terms of who I would take on as a client. As a result, I got a lot of clients with troubles beyond my expertise or clients who just flaked. It didn’t feel good.
But then I realized I should look at my BEST client. What was different about him, compared to the others? Well, he respected himself, was growth-oriented, and positive. Wow, total breath of fresh air.
So I started reworking all my copy on my site and in my emails to speak to THAT guy.
I found the more I showed deep respect to my customers and the more I spoke their language, the more fun I had, the better results they had, and the more good sales I made.
As an example, I learned to write about how “gentle and pleasant is the most effective” method for introverted men, and it began to resonate. To them, I was an oasis from all the advice out there that was telling them to “man up, already!” and be someone they weren’t. I was giving them permission to be themselves.
After rewriting my copy I started getting emails about how they were so happy they stumbled across my site because I actually understood them. It was like I was reading their minds, they said. THAT’S the sweet spot of a business and when you get feedback like that, you know you’re focusing on the right thing.
Now, instead of customers who flake I get customers who ask for more advanced material.
While I use a variety of services to track these numbers, I routinely go through and copy/paste them into a Google Drive spreadsheet. The practice can be tedious but it helps me grasp my numbers intimately, something that’s important as a solo founder. My team is small, so everyone reports directly to me (so far!). So if I don’t know it, nobody knows it.
I like to “design” my spreadsheets so they don’t look like boring squares of numbers. You won’t use your spreadsheet if it makes you cringe with caution-sign yellow (unless that’s your thing) or if it makes your eyes glaze over with 1980’s grey-on-grey. Pleasant and simple is what we’re after.The whole picture: Visitors, opt-in rate, number of new enrollments, and revenue
To help get you started, I made a sample Google Drive spreadsheet based on mine above that you can duplicate and get started.
Get the spreadsheet template here
You’ll see I added in a line for “Enrollment Ratio” which is a secondary KPI that can easily be produced with the three above.
(If you like these pretty colors I made, you can make your own in Google Sheets by going to the paint bucket icon, select “Custom” and drag that little cursor around to your heart’s delight!)
Learn to love your numbers
Starting a business is an act of courage. You’re trying something new, and that can be scary. I’ve found that tracking my numbers makes me more courageous. I can see the direct results of my efforts and adjust accordingly. And when I see progress (and just moving forward at all is progress!), it fuels me to do more and better.
Numbers aren’t inherently terrifying. Sometimes we can think our numbers are “too small” and that can discourage us from tracking them. To be clear: No matter how small your numbers are, it’s good to know them.
Remember you will NEVER be at this exact place in your business ever again. Everything should feel special. Your business’s growth is like a child’s growth: the terrible twos are tough, but they only happen once, so treasure it.