Today’s marketers are overwhelmed with analytics. From “old school” metrics, like sales and conversion rates, to digital ones like bounce rates and traffic numbers, there’s a lot of data to look at…
And this makes life pretty confusing – especially when that one thing you want to do is grow.
Fortunately, Sean Ellis, “the godfather of growth hacking”, recently posited that one metric is enough to measure and guide growth.
This is good news, because having a single growth metric makes life easier. It gives you a “true north” to follow; a shining beacon in the pitch-black darkness to walk towards. It makes your business better and more effective at growth.
Most importantly, it gives you the ability to filter out the data you don’t need, allowing you to take the shortest path to where you want to be.
The only question is, how do you pinpoint the One Big Growth Metric your business needs?
You’re about to find out, with answers from Sean’s recent presentation and our own experience as a top European growth hacking agency.
The first order of business is understanding…
THE CHARACTERISTICS OF YOUR ONE BIG GROWTH METRIC
It doesn’t matter what your growth metric is, per se. It could be traffic, it could be sales, it could be your lead list – what’s really important is that whichever metric you choose has several key characteristics:
1. Ease of Understanding
You should not rely on a mathematically complex yardstick to measure your growth. The more “advanced” your metric is, the further you get from raw data – and the harder it becomes to assess how good you truly are at growing.
2. Relevance to Your Goal
Most importantly, the data you collect should help you assess your growth. Therefore you are better off keeping things dead simple, sticking to a metric that is directly relevant to your goals.
The more real-time your data is, the better. You want your information to be as fresh as possible, so never rely on outdated data as it will tell you very little about your current situation.
4. Instantly Useful
If you followed the 3 previous points, you should end up with data that is instantly actionable, i.e. immediately usable and testable by your team. Don’t fall into the trap of “collecting useful data for later” because that later often never comes.
Once you have considered the four factors that make a growth metric successful, it’s time to think about the specific events which are relevant to your business and its goals.
CHOOSING A METRIC RELEVANT TO YOUR INDUSTRY
Every industry and business type has a set of particularly important metrics. You can (and should) examine keep these in mind, because there’s a reason other companies are using them. They might not be a natural fit – but they do deserve your consideration.
In the SaaS niche, you might want to measure subscriptions or paid subscriptions, depending on whether your current goal is product awareness or revenue.
Transactional businesses, like e-commerce stores or service providers, are best off measuring purchases. This can be in the form of total sales, conversion rates or units sold.
Media providers, curators and creators should measure click-throughs, depending on what provides most business value. Content marketers fall under this category, too, even if their business does not directly profit from media.
Game creators look at game downloads, game log-ins and total hours clocked, depending on the sophistication of their analytical software and the business model their game has.
App developers and traditional game studios should view their business as transactional, going for a sales-minded approach to analytics.
These are all, of course, just ideas; nobody says your business should use the standard round of best-fit metrics. If you have an inkling that doing something different will be better for you, go ahead and experiment!
Just remember the logic behind the above metrics. Understanding it will help you grow that much faster – and make sure you don’t make…
3 MAJOR METRIC MISTAKES
Sometimes, the growth metrics that seem the most appealing and relevant are actually quite useless. Here are 3 broad rules that will help you steer clear of these mistakes, and closer to data that actually matters.
Mistake #1 – Using Vanity Metrics
It’s important to remember that some things have no bearing on your growth. For example: page views and social media shares can be very flattering, but they will not bring in sales, new clients or business growth. All they do is feed (or extinguish) a marketer’s self-confidence. These vanity stats can be fun to look at, but they should never be your “one big growth metric”.
Mistake #2 – Using Data That Isn’t Actionable
Tracking data that you can neither act on nor change is a useless activity. Feel free to measure data you can’t act on, just don’t make the mistake of prioritising it.
Mistake #3 – Overgeneralisering
Using averages to measure overall performance is tempting but a huge mistake. For example, taking the bounce rate for all users without accounting for traffic sources will give you a false, distorted view of what people are doing.
Avoid this mistake by paying attention to the multiple variables that affect your One Big Metric – and segmenting your data before you analyse it.
Now, let’s recap by going over the exact steps that will help you find your One Big Metric:
Make sure that the metric you use has 4 key characteristics: ease of understanding, goal-relevance, time-relevance and instant usability.
Look at what other people in your niche and industry are doing, and use that to help you make a shortlist of potentially useful metrics.
Avoid the 3 major mistakes listed above.
So long as you follow these 3 points, finding a metric that consistently guides you to growth will be easy.
Just remember: the advice in this article doesn’t work unless you do!
If you’re serious about finding (and using) your One Big Growth Metric, take the first step in the right direction today and subscribe to our newsletter and join our Facebook community (Growth Marketing Belgium) for weekly articles on growth hacking, growth and digital marketing!