In this chapter, you'll learn how to identify the essential KPIs to measure your performance.
Analyze Your KPIs at Two Levels
The goal of the growth hacker is to seek (and find 😉) levers for rapid growth. There are two types of essential analyses to include in your tasks.
The Spot Check
Ideally, this check should be done regularly on your KPIs to make sure there's no malfunction. I urge you to check the landing page's performance at least once a day and spend 20 minutes on this type of analysis.
Remember, each of these actions involves the company's image, so a bug on the landing page will cause your communication efforts to fall by the wayside. So be constantly on alert. 💪
The Deep Dive
We're not talking about monitoring here, but instead peeling the data down right to the bone.
In the dataset, examine what could help you better understand your users. Study the users' lifecycles by segmenting them by persona or other criteria (geographic, gender, age of the user, etc.) to find where the impacts are in value and volume.
Try spending one full day per month on this type of analysis.
You perform a deep dive analysis for two acquisition channels over the same time period: SEO and Facebook.
Data collected on a search engine (SEO)
Ten thousand people come from Google.
One thousand register and leave their email addresses.
Only one remains to use the service.
On Facebook advertisements
One thousand people arrive on your site from your Facebook advertisements.
One hundred register.
At first glance, Facebook ads generate less traffic than visits from Google. But, if you analyze a little more, you can see that traffic is more qualified on Facebook because, among the users who come, 60% of them stay. It's an excellent ratio.
Beware of Vanity Metrics
These metrics are often the most accessible and easiest to measure. It's the reason why many entrepreneurs fall into this trap.
You often find vanity metrics for the number of likes or followers on social media: it's ego-boosting to have hundreds of thousands of followers, but if they don't convert into website visits and subsequent sales, then your followers have no business impact.
It's a matter of clearly defining the most important KPI and on which one you can act.
Identify Actionable Metrics
Here are three questions that allow you to identify the actionable metrics, enabling you to measure your performance and find growth opportunities (source: Tableau).
1. What Decision Can I Make With This Metric?
SMART and actionable metrics help you make decisions. They give you the feedback that you need to know whether the action is working or not. Each of the data types that you follow should allow you to improve your business.
You offer a downloadable white paper. Measuring the number of visits to this page doesn't help you much. However, measuring the white paper's download rate will inspire you to test new teasers, CTAs, or forms to access the white paper's content to increase the download rate.
2. What Can I Do to Intentionally Reproduce the Result of This Metric?
If any of your content goes viral, it's fine, but if you don't know why, then you have no way of reproducing it. What looks like success doesn't teach you anything. If you can't improve the process, then you have no way to optimize the metric.
You have an online magazine. The president tweeted about the magazine, and online subscriptions shoot up overnight. Very good! But this event is entirely external, and you have no way to increase subscriptions from this tweet. You can still identify intermediaries/influencers who could have a similar impact.
3. Is Data a Good Representation of Reality?
Nowadays, you can buy followers. Within hours, you can become a (bogus) internet star by paying $50 to get 90,000 followers. Followers and likes on social networks cannot be your metrics for success, especially when you know that web giants regularly change their algorithms, which challenge the positioning of your brand on the different networks.
Turn Vanity Metrics Into Actionable Metrics
Here are some concrete ways to move from vanity metrics toward actionable metrics in your dashboards.
The Vanity Metrics of Your Website
The most used is the Page Views because you assume that lots of people visit your site and love you! 😍
Here are some alternatives: instead of measuring Page Views, focus on analyzing the quality of the visits and the user behavior on the site, by studying the following data:
The bounce rate: or how many people immediately left the site.
Time spent on the page: to show the interest and reading time.
Sessions: the number of times they visited the page.
Unique visitors: the number of users on the page.
Pages per session: the number of pages visited during a session. The higher the number of pages viewed, the greater the interest (or the difficulty of navigation).
Pages per user per month: the number of pages visited per user per month. This is important to watch if you have online software, as well as the time spent and frequency.
You can also analyze the differences between the cost per lead and the cost per qualified lead, or also compare the cost per converted lead.
Vanity Metrics About Your Customers
We tend to measure the total number of customers. It feels good, but it doesn't give a lot of context. This figure technically cannot decrease, and even if it regularly increases, it does little for your business's health.
Possible alternatives to better use your customer data: how much do your customers spend per order? Do you get them to re-order or recommend you? Here is some interesting information:
Number of products/order.
Percentage of new customers/repeat customers.
Number of active users: this should be distinguished from paid users, especially if your product is online (software).
The subscription renewal rate, if it's part of your business.
The upgrade rate (switch to a higher subscription).
The number of opportunities (leads) generated by recommendations (referrals).
Vanity Metrics About Your Social Networks
Anyone can like a page: it's free, and it only takes a click! Nevertheless, it's true that the 10,000 Instagram followers that you have seduced in one way or another impact your revenue and generate some sales.
How do social networks impact your business?
Traffic generated and engagement is an alternative to the number of likes and followers you have compared to your competitors. Also, how well-known you are. Some examples of types of data to track:
Social media sessions: the number of sessions on your website from social network sources.
Click rate from social media networks.
Commitment by post or by follower.
Market share compared to the competition.
Satisfaction rate and opinions left about the brand.
Mentions and shares by influential followers.
Measure the Churn Rate
It's essential to measure your churn rate successfully: even if this metric seems negative, it is very revealing. It's a critical metric, especially for businesses with recurring billing (for example, Spotify, which offers an automatically renewable monthly subscription).
By focusing on this metric, you can compare it with your CAC (average cost of acquisition). If you don't keep your customer long enough to make a profit above this cost of acquisition, then you're not in the right place.
How should I calculate churn?
Delineate a period of time: for example, a month.
Add all of the customers/users that you obtained, and add up all of the unsubscriptions over the same period.
Divide the number of unsubscriptions by the total number of customers.
Turn it into a percentage to get your rate.
For example, if you have five customers who cancelled their subscription, and 200 customers who subscribed during the same period, your churn rate is 2.5%.
5 / 200 = 0.025 x 100% = 2.5%
How can you reduce the churn rate?
It will help to rework your AARRR funnel, 😀 with a focus on activation and retention:
Onboard your customers in the best possible way to begin the relationship correctly from the start.
Ask them for feedback at each key stage.
Communicate proactively with them: contact can resolve any friction and reduce departures!
Find the North Star Metric
This metric will not be your revenue, number of page views, number of subscribers, or any other metric that measures only your startup's profit: these are users who are affected by the "North Star Metric."
How do you find your North Star Metric?
To identify it, here are some questions you can ask your team:
What is the "why" of your product?
At what point in their customer journey do your customers have the strongest product experience?
When do your users experience an emotional connection to your product?
What is the vision of your product? Is this metric true to your company's long-term vision?
Does this metric measure the level of engagement of your users?
Here are some examples of North Star Metrics. Please note that these are only hypothetical because only people working internally know what these metrics really are. It's not something to disclose:
Airbnb: the number of nights reserved, which captures the value created on both the host and visitor sides, as well as for the company.
Facebook: the active time spent on the news feed, or number of daily active users.
Rely on Tools
Tools are your best allies to avoid the common mistakes made by growth hackers. Sound practices are often directly integrated into them, and your time is precious. Good growth hackers regularly update their tools, keeping the ones that work, and address real needs.
Here are some tools that should help your growth by keeping an eye on the figures. Try one or more, and compare their functionalities to determine which one best fits your business.
There's no secret that 90% of media planning and studies are done on Excel. In Google Sheet, you can save your data on your Google Drive and access it from any device. You can also connect your sheets to other tools.
You can find out more on Zapier.
It centralizes all of your marketing and advertising data in a single tool. I highly recommend it!
They allow you to create personalized dashboards and centralize your data. However, some coding knowledge is required to customize it.
Finally, here's a non-exhaustive list of other tools to test for your business: Mixpanel, Google Tag Manager, Facebook Pixel, Google Analytics, Hotjar, Google Data Studio, Supermetrics, etc.
Analyze your KPIs at two levels: spot check (once a day) and deep dive (once a month).
Watch out for vanity metrics that give a good image but aren't actionable.
Instead, identify the actionable metrics that will provide you with growth opportunities.
Measure the churn rate.
Find the North Star Metric.
You have reached the end of this course. You now know how to create and measure hacks. I want to draw your attention one last time to the growth hacker's mindset: since you know how to hack your growth, why not also hack your productivity? It's a good mentality to adopt, which will allow you to free up time to find other opportunities!
Identify your repetitive processes and tasks, then try to automate them. My favorite tool is Zapier. 😀
Good luck with your growth activities, and remember to think outside the box! See you soon.