3 Marketing Metrics Small Businesses Should Be Tracking
What is your reaction when I say the word “metrics?” Do your eyes glaze over? Do you feel uneasy? Do you sit up a little straighter in your chair, excited to sharpen your pencil and get down to work?
If you fall into the third category, you have my utmost respect, and my permission to leave class early today. Bye!
Okay, everyone who is still here. Now that we got rid of the keeners, let’s be real: tracking data suuuuuuuuuuuucks.
The reason it sucks isn’t because of math or numbers or details or any of the qualities that can make data analysis tedious for some.
It’s because the last thing most business owners have time for is reviewing past actions, synthesizing the data, and figuring out what the data is telling you about your future decisions.
When you consider all the various tasks on our to-do lists, ones not directly related to actually running the business can feel like a real nuisance. That’s why I pared down the list to just 3 metrics every small business owner should should track. Get these, and forget the rest.
The problem these days isn’t a lack of information. The problem is, we have more information than we would ever have time to review, a problem that will only continue to get worse.
This is an issue to some extent in all organizations, but especially for small businesses that are already under-resourced. We have increasingly creepy ways to gather data, ever-more-detailed dashboards to display it, but never enough resources to do anything with it.
Advantage or Disadvantage?
Some don’t see the self-limiting capacity to analyze data as a bad thing. In his book The Tyranny of Metrics, author Jerry Z. Muller offers a critical examination of the potential drawbacks when data gathering is used excessively or inappropriately.
Muller highlights cases where an over-reliance on metrics led to unintended negative outcomes, such as a decline in motivation, creativity, a decrease in meaningful learning, or the neglect of important but non-measurable aspects.
This is why we recommend focusing on a limited number of key performance indicators based on how valuable they are to your business.
Which Marketing KPIs to Track
With that in mind, here are the marketing metrics for small business I think are worth tracking.
1 – Website Traffic: Monitor the number of visitors to your website, both overall and from different sources such as organic search, social media, referrals, and paid advertising. Tools like Google Analytics can help you track this metric.
Website traffic is worth tracking for reasons beyond measuring your marketing results. It’s often the canary in the coalmine that will tell you if you have a problem with your offer, product, or brand. If traffic is steady and then suddenly drops off or trends sharply downward, it’s a sign of a problem somewhere, and you need to look a little deeper at what is going on in your business.
2 – Conversion Rate: Measure the percentage of website visitors who take a desired action, such as making a purchase, filling out a form, or subscribing to a newsletter. Online, this metric helps assess the effectiveness of your website in converting visitors into customers or leads. Measuring in-person sales conversions helps you understand the circumstances that come together to help you make a sale.
I would be lost without knowing my conversion rate, and that of my clients. The reason for that is if you have a reliable sense of how many leads you convert, you know roughly how many you need to gather to meet your revenue goals. This helps you direct your business development activities in a way that gives you better control over your pipeline.
3 – Return on Investment (ROI): Measure the profitability of your marketing campaigns by comparing the revenue generated against the marketing costs incurred. ROI provides insights into the effectiveness of your marketing efforts and helps you make data-driven decisions.
Many marketers shy away from this because it can be bad news. If your marketing efforts aren’t paying for themselves, then clearly you’re not set up for success from a profit perspective. However if you’re willing to take a hard look at the numbers to see whether your efforts are worthwhile, you will be able to pivot if a promising marketing strategy turns out to be fruitless.
That’s it. Those are the three marketing metrics I believe small business owners should make time for.
Above and Beyond
If you’re only going to track three marketing metrics, those are the three I recommend as a bare minimum.
If you have the time and inclination, you may decide to track other metrics like cost per customer acquisition, customer lifetime value and email marketing open/click rates.
These additional data points can also help you evaluate the efficiency of your marketing campaigns, optimize your budget allocation and help you make more informed decisions related to customer acquisition and retention.
The specific metrics you track will depend on your business goals, industry, and marketing channels used. It’s important to align your metrics with your overall marketing strategy and make the time to review and analyze the data to make informed decisions.