Welcome to Episode Two of tech power ups, the elevator pitch for today’s installment can be if you can’t measure it, you can’t improve it. Now, that’s a simple statement. But there’s actually a lot packed in there.
You have to know:
- Where you want to go.
- What you want to measure to get there.
- And how you’re going to measure it.
Defining and executing on all of that is absolutely crucial to the success of any business. But putting that all together is no small task.
Today we’re going to break it all down, and help you make better decisions about how to start measuring and improving your marketing, and business processes.
Today we’re talking about measuring your impact.
When it comes to measuring anything, we have to understand the different components that make up the thing that we’re we’re measuring: What are the drivers? What are the underlying concepts that actually change that particular variable.
So the way we look at this, is we look at three different levels: We look at goals, we look at objectives and key results, and we look at KPIs.
So these are three distinct different tools to use to measure, monitor, and manage impact, change, growth.
We’re going to start with goals, because that’s what most people understand. They think of a goal as something that, you know, you put a goal out there for this week. We put a goal out there for this month. We put a goal out there for this quarter. And there’s a lot of different ways to to create goals, and to follow them down the rabbit hole. But the the underlying concept around goals is: what’s the rhythm that works for what you’re after?
Is the timeline that you’re creating for this rhythm — let’s call it monthly goals — are we choosing things that can appropriately be completed within that timeline? Or are we choosing too aggressive of goals? And are we kind of reviewing them and re reviewing them and pushing them out frequently?
When it comes to goals, it’s just about being realistic of what can be accomplished.
There’s a famous Bill Gates quote, that people overestimate what they can do in one year, and underestimate what they can do in 10 years. And that problem, you could say kind of leads to discouragement for the individual, and for any of us, that tend to get into that mindset of letting our ambition kind of these things in a way that’s just unrealistic.
So the balance between being a realist and being a optimist, it’s really key to understand that about yourself when it comes to setting goals and just making sure that you’re not doing this over estimating of what can be done.
With the whole arc of building anything, you have to think about it like a piece of art. And business is art. It’s one of these things that you have to sit with, and become part of. You can’t just control it from the outside. And goal setting is one of those areas that often gets sort of destabilized because people often don’t do that. They think they should be “X.” They think they should get “XYZ” done by “X” date. And that’s just not how art works. Art is an emergent phenomena of the creator, and you kind of ride the wave of it.
Jumping on from goals to OKRs.
OKRs are taken from John Doerr’s book, “Measure What Matters.” And these are Objectives and Key Results.
I thoroughly love the objectives and key results. These objectives have some characteristics to them. And it’s that they’re: significant, concrete, action oriented, inspirational, and really a vaccine against fuzzy thinking.
That last one is my absolute favorite. It means making a statement, a clarifying direction so concrete, that it will influence all the other decisions downstream that anyone in the company can make, surrounding what they’re doing. Meaning we can always bring it back to that objective, and it will help guide us.
That’s what a real clear objective is. And the key result component of this is, that they’re specific and time bound. They’re aggressive, yet realistic. That ties a bit back to the goals that we talked about a bit ago. And they’re measurable and verifiable.
So a lot of companies end up with mission statements that can kind of like drive the direction. They can have a purpose statement. These objectives and key results I think are some of the best. It really is one of the best ways to align the direction of a company and to collaborate movement, and an aligned direction. It’s highly worth listening to Doerr’s TED talk on this, it’s a good 10 minute riff that digs into this.
In the last tool we’re going to talk about is KPIs (key performance indicators).
KPIs are variables that we choose to measure, that indicate performance in different areas.
So as an example, for us as a tech company, one of the KPIs that we actually measure is called “Running 30 Billed Hours.” We’re looking at the running 30 day average, always rolling forward, and what that shows us is sort of the velocity of the company. The speed of the car. And it gives us an insight. When it starts to dip, it’s a red flag going off.
Now we can look at daily hours as well, but the monthly has proven to be a really good measure for us to just monitor the company’s health, and we kind of know what’s going on.
But KPIs in the digital marketing sense, are often:
- Cost Per Acquisition (CPA) and cost per sale
- Cost Per Lead (CPL)
- Cost Per Click (CPC)
- Earnings Per Click
All of these different KPIs that we choose have limitations to them as well. So arbitrarily picking your which KPIs to look at inside of a company doesn’t really work.
Years ago we worked with a client that was using a measurement called Dollars Per Lead (DPL). And the calculation that they were doing was the dollars that they made today, divided by the leads they generated today. When you think about that, you’re like, “well, what’s going on with that?” And that’s, that’s an interesting kind of measurement.
With a more of like a scientific hat on we can say, “well, that number doesn’t actually tell us any solid data about the company,” because the leads generated today didn’t contribute to the dollars earned today. It wasn’t a day zero revenue situation, they were using leads not sales. And when we questioned them about it, they pushed back and said, “No, this is the measuring stick that we like to use.”
As we dug deeper, it turned out that they were using it as sort of an intuitive measurement of the company. The leadership was was using it in that manner. And that’s not a bad thing. But it’s really important to know that it’s not a scientific measure of the company’s performance. And that was a very interesting situation, because they were running on a lot of intuition in the leadership, as opposed to the tangible factual bits that KPIs are normally designed to measure.
In fact, we were unable to work with them in a scalable, successful manner to help them add automation that they were looking for, because their whole alignment around what they were measuring, and how they wanted to act on it, was a little different than the scientific approach that we start with.
So that’s kind of the three, aspects of measuring your impact.
You’ve got the goals. You’ve got the Objectives and Key Results. And then we’ve got KPIs. Y
The OKRs are kind of goals on steroids. It really is the overarching concept, the company goals really are kind of a better realistic breakdown to help measure progress over the course of time.
And then our KPIs really represent individual variables that will let us know if we’re being successful in specific areas. And if we don’t put KPIs in place, we just can’t measure it. We can’t improve it.
And the place really to start with with all of this stuff is getting clear on where you want to go.
The simplest dashboards and reports from your ecommerce platform, or CRM, or Google Analytics really is a great starting point.
If we’re looking at the pure digital businesses, one of the things we really care about, is knowing the data points that represent the business flow. And I don’t mean to say that an abstract way, but we’re really talking about starting with traffic to a website itself. What’s the origin of that traffic? How are we tagging or tracking or dissecting that?
And then where are we doing with that traffic? Are we dropping a remarketing pixel into that browser to market to them additional content to what they’ve already looked at? Are we serving them up pure content right off the bat? Are we attempting to generate a lead? Do we have a real thought-out process that leads towards a sale?
Fundamentally, it’s about serving and just understanding what people are wanting when they’re stepping into engaging with you.
So using tools like the UTM tracking capability of Google Analytics, really lets you slice and dice in segments and get really get quite fancy with the different visitors that could be coming to a website.
You know, most of our work is in the digital landscape, but the same concepts apply to physical businesses — to every person that walks in the door. Every person that picks up the phone and calls in, people still do use phones and call businesses and ask questions. Other incoming sources can be texting too. We’re seeing a big rise in being able to be texted as a company and communicate.
In international travels, the use of WhatsApp everywhere is impressive. It’s the medium of communication for businesses, and you can text them. In my last trip to Central Asia, there was a lot of this. So it’s continuing to change and diversify.
So it really is about understanding what we should be tracking that feeds into our business model. And really, then what are we after? And how are we serving people?
If you’re interested in learning more about today’s topic, or having Our expert team perform a tech and marketing audit on your business, feel free to give us a call at 888-372-8823 or go to techguys.co/track and you’ll be able to schedule a chat with us at a time that works best for you. And with that, we’ll see you next time.