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Grow your business by measuring the right things

10774Points

5 years ago

The most important part of this post is the conclusion, so let’s jump to it: when doing marketing for startups, make sure to stay focused on the right metrics and move fast based on what you’ve learned. Let’s take a deeper look at this.

If you want to grow your business, you first need to understand what to focus on. From that perspective, you should concentrate on just one metric: your magic number. Your first task will be to find that metric; it varies for each business, but one thing always holds true: this magic number should be a variable that defines your startup. If it grows, your business will grow in the same way, and vice-versa.

Still, how do you know which number is the right one? Well, according to Waze’s head of growth Di-Ann Eisnor, being sure about it doesn’t matter. As she recommended in her Platzi class on growth, start by focusing on one metric, and change to a different one later if necessary; but always focus on one single metric at a time.

When you have your magic number, you need to build your growth strategy around it and find the levers that will help it grow. Please don’t do a copy-paste of the strategies that other startups have been using. If you want to succeed, you need to come up with methods that will serve your particular business, not just reproduce what others have been doing over and over.

#AARRR! Startup Metrics

We started this post saying that we need to build our strategy around one single metric, which is called the magic number. However, it doesn’t mean that we shouldn’t measure other factors; as a matter of fact, there are some key metrics that can help us keep track of our entire funnel.

This is the case of the “startup metrics for pirates” that 500 Startups’ founder Dave McClure came up with. These are also known as AARRR!, which stands for Acquisition, Activation, Retention, Referrals and Revenue.

In practical terms, it covers the flow a user will follow: he or she finds out about us, then visits our landing page; if everything looks good, he or she may register on our site; and hopefully come back to our page later on and/or start using our app frequently. When users like our product enough, they’ll start telling his friends about our product <and the="" funnel="" starts="" again="">. Finally, those users will take actions that result in revenue for us, and the funnel is complete.

It’s not necessary for your business to fit into this model 100%, but you should try to identify your own funnel, see how these metrics apply and work to get the best possible conversion rate at every step. In my opinion, this is how startup metrics can really help your business grow; you will find below a list of my favorite tools to keep track of them.

#Startup Metrics tracking tools

###Google Analytics

Almost everyone knows about Google Analytics, and almost every site owner installs Analytics on their page, just because they have heard that it is important. Some of these people never learned what it was or how to use it, which is a shame: used to its full potential, Google Analytics can tell us everything that is happening on our site at all times. From your dashboard, you can track anything from basic page views to advanced e-commerce campaigns. It is incredibly powerful. And the best part? It’s free. If your budget is limited, this should be enough to analyze what is happening on your landing pages and optimize your initial marketing strategies.

###User Behavior Analytics

If you want to improve your product further, you need to step up your game and understand how your visitors are using your product. There are a lot of tools for that, such as Mixpanel, KissMetrics, Woopra and others; you will need to pick up the best platform based on your specific needs and preferences.

What I recommend is to test all the tools that sound relevant for your business. The catch is that every service you try will require to insert code inside your product, which can be annoying and time-consuming. To solve that problem, you may want to follow my advice and use Segment.io: it allows you to use different platforms at once with just one code snippet.

Tools aside, also make sure to talk to your users and watch them use your product: the quantity and quality of information that you can get from these conversations is incredible.

#A/B Testing

Do you think you have a flawless vision of what your users like? I know it is hard to hear, but our intuitions are almost always wrong, which is why we need to test everything with real users.

As you may know, A/B Testing lets you split your audience and show each share a different version of your site. Each test comes with a goal, which is the action you want users to perform. This goal is the key metric for your experiment: the version that gets the best conversion rate should be the one you keep.

You can do this with everything: your site, your email marketing strategies, your copies on social networks… so please do as much A/B testing as you can, as long as you stay focused.

#Move Fast and Stay Focused

This takes us back to where we started: the key takeaway here is that you should stay focused and move fast. That last point is very important: there’s no point in tracking all sorts of things if you don’t take advantage of that knowledge to improve your business to fuel your growth. As you will notice along the way, this will also mean discovering some things you had been doing wrong all along. After all, if you are doing marketing, you will make mistakes every day, so don’t waste time feeling sorry for yourself. Instead, learn from your failures and keep on trying new routes to get where you want.

Juan Pablo
Juan Pablo
unmalnick

10774Points

5 years ago

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This is a great article, I read and enjoyed it
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