Every Tuesday afternoon at 3 p.m., you’ll find me in our recurring marketing team meeting we fondly refer to as “Triple S,” which stands for “Sell Some Stuff.” This is one of my favorite meetings of the week. I swear, I actually look forward to it (and I’m not a huge fan of meetings to begin with). We’ve got representation from each of the core groups within marketing and spend a whirlwind hour reviewing key metrics from the top to the bottom of the funnel.
No matter what your business, you need to know how you’re doing when it comes to bringing fresh new leads in and converting those leads into sales. Here are five key metrics from top to bottom that we keep an eye on.
Almost any business will benefit by getting more quality visitors to its website, and ours is no exception. We use a variety of tactics to drive traffic to our site including paid search, display ads, retargeting and of course, killer content. And by sharing this killer content across a variety of channels from social media to other authoritative sites, we get our messages out to a breadth of people that may have a use for our products and services.
We keep a keen eye on our traffic and where it’s coming from using Google Analytics. And, like many other companies, we track how this incoming traffic converts to free trial sign-ups all the way through to becoming paying customers.
At VerticalResponse, we offer a free 30-day trial for anyone that signs up for our service. So an important metric for us to track is how many of those free-trialers become paying customers. We also need to know how long it takes for that to happen. If you have a free product or service, you know it’s vital to convert a percentage of them to paying customers. Knowing how many convert and when can help you make some key decisions along the way.
For instance, during a newbie’s free trial we send a series of helpful e-mails to encourage them to try out different parts of our application. Ultimately, we want them to send out a great-looking and engaging e-mail or social media post. By knowing how long it takes for someone to “typically” convert, we are able to tweak the quantity and cadence of these e-mail messages and optimize the user experience. (By the way, this is an ongoing effort; unlike a good story, there is no clear beginning, middle and end!)
Every member of our team has a goal to help us achieve our revenue and we maintain a laser-like focus on it every day, as most businesses do. By forecasting our revenue based on last year’s numbers, trends, seasonality and pacing, we are able to have a clear picture-day by day-of what we need to achieve. If a day goes off the rails, you’ll know exactly how much you need to do in sales in a day to make it up and how likely that is to achieve.
You’ll often know that the end of the month or quarter is near when you start getting special offers and promotions–everyone’s gotta make their goals or at least close out the month trying!
4. Lifetime Value
Speaking of revenue, once you get people to hand over their credit card, you’re going to want to keep them staying and paying for life. This is where the lifetime value of each customer comes into play. If you know how long a typical customer stays with you and approximately how much they spend over this time, you can easily figure out the lifetime value.
Let’s say your average customer stays with your company for five years and makes four purchases totaling $25 each time; the customer’s lifetime value would be $500. You can break this number down across your different personas and types of customers and then figure out how to acquire more customers like the ones that spend the most, stay the longest, etc.
Nobody likes to talk about churn because we all want to believe that no one would leave us and move on, but it happens and it’s an incredibly powerful metric. If you measure it consistently and over time, you will see any unusual spikes or valleys. And you can track those back to things that may have happened.
Say, for instance, your site goes down and no customers can access their accounts for 18 hours. Chances are, some folks are going to get ticked and leave, resulting in a spike in your churn pattern. Or you increase your pricing and make some major changes to your service that might leave some customers feeling left out. Again, that may initiate an increase in churn. By measuring your churn rate and having goals around it you can keep this important metric top of mind.
These are just a handful of the many metrics my team and I use to drive our business forward on a daily basis. What’s your take?
© 2013 – 2018, Contributing Author. All rights reserved.