385 - WTF is a KPI and do I actually need them?
On today's episode of the podcast, I'm sharing how the key performance indicators (KPIs) you track help you achieve your goals .
You're invited! I'm hosting a free live training on October 1 called Plan Your Best Year. I'll be sharing my planning process and how you can get your business besties involved to achieve your goals with the help of community and collaboration. Sign up for Plan Your Best Year at Bradendrake.com/training
This episode is kind of a part 2 to last week's so if you missed it, give a listen to 384 - How to Set Goals You Actually Achieve.
On October 1st, I'm launching a mastermind, and the guiding light to that program will be KPIs and what to measure to track how you'll hit your goals. The ultimate purpose of this is to come up with long term goals and figure out what you need to do in the short term to get them there and know what to measure in order to track progress of longer and shorter term goals.
What's a KPI?
A key performance indicator (KPI) is a metric or data point that gives you key information about the health or current state of your business. To me, revenue is the mother of all KPIs.
Your goals will dictate what KPIs to track. For example, if you want to increase your reach and brand awareness, you may keep an eye on your Instagram story views, and let that drive your social media decisions like testing poll stickers on your stories for more engagement or using different CTAs to try and convert more link clicks from your stories.
Another KPI that's helpful to track is lead sources which you can do by asking your clients how they found you. This measurement was why we stopped the podcast, because we found a lot of our sales were made by people who said they never listened.
Focus on priorities in your business so you know what to track, and where to spend your time. The better your tracking gets, the more you'll know where to spend your time.
What types of KPIs should I track?
There are three kinds - primary, secondary, and tertiary. The primary KPI is the topline number of the main thing you want to track. Let's take ads for example, If want to run ads to build my email list, the most important metric might be cost per lead because it gives a quick picture if the ad is costing me more than it's making me. I consider the primary KPI the bottom of the funnel, the end all be all number. It's the most important but also the least because what we really need to know is how we're getting to that number.
If your primary KPI is revenue, you want to track how you're getting that revenue and what's converting. So your secondary KPIs might be the total number of people following you on social media the number of new email opt-ins you get, the number of podcast downloads, certain Facebook ads metrics, etc.
KPIs vary by business, for example one-on-one service-based businesses may focus on inquiries or sales call conversion rates as opposed to products sold or average checkout cart value.
To start tracking these secondary KPIs, it's time to move up the funnel another step to the tertiary KPIs. Let's say you start tracking your number of leads every month, conversions, and average value per client. Once you've started tracking data, you have more to compare it to.
If conversion and leads is a secondary KPI, our tertiary KPIs would be data points that inform monthly leads such as Pinterest saves or TikTok followers.
For example, if most of your traffic comes from SEO, you'll want to take a deeper look into the peaks and valleys of your blog analytics. Our goal here is not to track everything, it's to track what makes sense for your business.
You can start tracking your conversion and average value per customer/client based on the lead source. You may find that while leads from one source may be plentiful, they only convert at 10% compared to 40% from another source, but that 10% conversion is taking 50% of your time. If you free up your time, you can spend it on higher-converting projects to bring in more money.
I'm going to talk more about this on our live training that is going to be on October 1st. I'll try to come up with some new fresh examples for you all. And then I also want to ask you all to give some of your own examples to brainstorm what your main goal is that you're going to focus on in Q4 specifically and what couple KPIs you could be tracking in order to maintain or rack your progress.
See you at the training!