As anyone who has played a Sim or Tycoon game should know, paying attention to metrics is key for building a successful city, theme park, island, lemonade stand, etc. Yet in real life, where key numbers aren’t already identified and neatly summarized, it’s very easy to forget the importance of looking at the numbers.

Metrics tie closely back to the idea of goal setting, and how you will inevitably end up where you steer yourself to go. In order to have goals for your business, career, website, or even bake sale you need to be able to establish a way of measuring your progress first. You need to do this at every “height” of your plan, from the high level bird’s eye view to your day to day progress.

The most basic step is establishing your long-term objectives such as $2 000 000 in revenue in 5 years, 560 000 unique visitors in 3 years, or raising $2000 for the class trip. Surprisingly many people don’t even establish these numbers. I have no idea where they are going and neither do they, but it’s understandably easy to get in such a position when there’s so many other things to do. When in that situation step back and ask yourself, “what is it that I’m actually moving towards by doing these tasks?”

Once you have your long term objectives it’s time to split them up into manageable chunks. You have to figure out how it is that you are actually going to get there. What level of sales do you need to attain $2 million in revenue for your business? How many new customers do you have to aquire every month to meet this figure? How is your existing marketing performing in relation to this? What kinds of things can you try to improve it? What metrics do you need to measure to know whether your marketing has improved? How will you obtain these measurements?

As you split up your goals from the long-term to what happens now you must identify the key components responsible for attaining your goals, and you must have metrics to measure their success quickly and often. Every component then becomes a smaller project with its own goal - such as increasing magazine ad response by 140%. With the numbers providing an honest assessment of where you stand in relation to where you need to be something incredible happens. You know immediately where you need to be concentrating your efforts and as you work to improve the components of your projects you have feedback on how it’s affecting performance. Step-by-step the numbers grow on smaller changes, and in the background the power of addition is bringing you closer to your goals.

Let’s take my blog as an example. I began it as an experiment to see how well I could do in this realm, after seeing so many other bloggers succeed by writing honest high quality content and taking advantage of online revenue models. Before installing WordPress I had a clear vision in my head of what I wanted to write about and what kind of readership and revenue I aim to achieve. Inspired by Steve Pavlina’s amazing path, I decided that I want to give myself a year to directly earn a minimum of $2000 every month from this site (this would exclude side-benefits like this blog driving new customers to my other ventures). To do this I need to focus on obtaining a high readership rate and a high return on advertising, Amazon referals (I don’t lump this in with advertising as I only use this program when I’m already recommending a product independently of desiring monetary gain), or other revenue models that I may implement in the future such as a donation link.

In my desire to achieve the above, and to learn a whole lot along the way, I am keeping a very close watch on two sets of metrics that I know are absolutley key to achieving my goal. The first is my traffic statistics, where my ultimate goal is to increase the amount of unique visitors that I get very month. By being able to measure this bit of info I know how quickly my readership is growing. I also look at where my readers are coming from and how various articles perform. Having this information I can then take a look at the different numbers that the revenue programs I participate in provide. I can track the average revenue per thousand visitors and see how different ad placements are performing. With all these metrics I am able to experiment with new ideas and measure the results.

The result is an incremental and measurable path towards my ultimate goal and the simultaenous improvement of my reader count and what I receive for every reader. If I had taken the approach of just randomly doing things that I heard would improve my traffic or revenue I would be missing out on both readers and revenue - probably in the realm of a several hundred percent difference!

This kind of methodology can be applied to any project, but you must actually identify and look at the numbers involved. Doing so brings math to your side and allows you to pursue growth naturally.

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This entry was posted on Monday, June 12th, 2006 at 7:04 am and is filed under Productivity, Business, Achievement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.