This is a transcript from episode 13 of the OMGrowth podcast, published on February 11, 2021
Key Performance Indicators – or what the cool kids call your KPIs – are all about channeling your inner Janet (Jackson, if you’re nasty) and asking your workload, “what have you done for me lately?”.
KPIs are used as a reference tool for your performance expectations and revenue targets.
Good to know, right? End of episode. Well, not quite.
Because your targets change, your expectations change, your revenue changes.
And every time you achieve something new or hit a new milestone, this will impact the standards of how you operate.
It’s that “new normal” we keep hearing about: it’s the standard, it’s the status quo, it’s what you define to be business as usual.
While it’s easy to get excited about growth goals, KPIs are the necessary and stabilizing forces that keeps your business operating.
And for as many ways as you’re promoting yourself, selling your products and investing in your brand, there will be at least that many KPIs available for you to account for. Why?
Because when you’re investing time, money or energy, you want some kind of sign – some type of indicator, if you will – that you’re on the right path, right?
And that’s what a Key Performance Indicator does for you: it lets you know whether all systems are going the way you want them, too.
You know your girl is a big fan of examples so let’s use a few to illustrate what KPIs look like in action:
SOCIAL MEDIA MANAGEMENT
I’m going to get all controversial up in this mother and say that your followers are not a Key Performance Indicator worth focusing on.
It’s true. While the vanity metrics of having a high follower count seems great on the surface, that’s exactly what your follower count is: a surface-level metric.
Your follower count does not correlate to your business performance; but what those followers DO on your website does!
You’d be way better off looking at:
- Traffic clicking through from that platform (new and returning) to your website
- List sign-ups/subscribers from the social network
- Time spent and pages visited from the social network
- Engagement from social traffic
- Purchases from social traffic
Now, I said at the beginning of this episode that KPIs are about channeling your inner Janet (Jackson, if you’re nasty) and asking, “what have you done for me lately?”.
So put a hand on one hip and pop the other hip out and look at your social media traffic and ask: “what have you done for me lately?”
(By the way, I’m convinced Prince wrote this song on the DL. I know this has nothing to do with anything data-related, but, data’s not the only thing that matters, ok? Sometimes a girl needs a beat, gnome-saying?)
This is a question you actually want to have an answer to before you invest any more time, money or energy into your platform. You want to have an indicator that represents whether your outcomes are meeting your expectations.
This is especially important when you start outsourcing or hiring a team: being able to communicate what your expectations are – so basically, knowing your KPIs – is a mega-boss way of showing up.
And it also allows the expert you’re looking to hire to tell you whether your expectations are realistic for where you are right now. Maybe you’ve set the bar too high for yourself. Heck, maybe it’s too low.
But at least you have a bar – a baseline of expectations – that you can assess.
Because remember: Key Performance Indicators are about setting foundations. They’re about constant, stabilizing performance numbers.
And can we take a moment to talk about surpassing expectations? Yes ma’am, we LOVE talking about surpassing expectations!
But you have to SET the expectations first before surpassing them so whether you’re talking about your team, your ad spend, your profit margins – whatever! – it isn’t always the growth or push goals that are worthy of popping bottles.
We tend to over-celebrate the hard-earned, mega-stressful launch metrics, while overlooking the tremendous value that comes from consistently performing in a way that meets all our revenue goals… and staying cool-as-a-sports-bar-draft-beer in the process.
The only thing that’s in a state of constant growth is the wealth of Jeff Bezos and whatever that weird thing is on your uncle’s leg that he scares the kids with.
Constant growth featuring a conga line of bigger-and-better goals without periods of stabilizing and systemizing is a recipe for burn-out.
Because it’s never enough, and it’s never going to be enough: there will always be more, bigger, better to achieve.
KPIs allow you – or, force you, even! – to live in the NOW and acknowledge what you accomplishing day-in and day-out… without it always having to be about out-doing yourself.
Speaking of out-doing yourself, this brings us to our next example of KPIs in action:
Your Key Performance Indicators don’t always have to be about sales and revenue and leads – although, yes, all of those things ARE the bee’s knees.
But you know what else is? Your time and energy. I encourage you to account for those like your performance depended on it… because when you have a KPI in place for your time, you MADE it count – literally!
When you hire someone to help you out with admin stuff, you can pay closer attention to things like:
- Time you spent on income-generating activities
- Time you spent on activities that doesn’t generate sales or leads
- Time someone else spent helping you manage your operations
Because you DO remember why you got into this in the first place right? And if the answer was “to make 7 figures from my sofa”, you’d have given up long ago because you and I both know by now that it doesn’t work that way, boss.
Which brings us back to how YOU work and why YOU got into this: you wanted to TAP INTO SOME kind of freedom!
You wanted time freedom, you wanted the freedom to call your own shots, you wanted to be free of others telling you what to do – you wanted to make like Freddie Mercury and BREAK FREE!
So why don’t you do that? Better yet, why don’t you integrate that into how you measure your performance?
Because that’s what a KPI can do for you: you can establish freedom as one of the boss’ key performance indicators and see if you meet, exceed or fall short of your own performance expectations.
But I’m feeling myself with these examples today, boss, so I’m gonna keep coming with them and talk about every boss’ favorite number: profits!
When you hire a financial advisor or an accountant in your business, your profit margins are their key performance indicators.
Now, you know – or your advisor should be able to tell you – what your profit margins are shortly after hiring them.
Your profit margins are not the same as your sales or revenue.
When you hear the horror stories about someone’s million dollar launch… and $999K was spent on ads and overhead? Ugh! Amirite?
I mean, wasn’t there a point where someone sat down to draft out what needed to happen for this launch to be profitable, and course-correct whenever the red flags started flying?
Because this is the flip side to surpassing your KPIs: as much as you can – and will strive to – out-perform them, they’re also there to channel Whoopi and let you know when you’re in danger, girl!
And when you have an accountant or financial advisor to turn to, you’re also positioning yourself to improve your existing profit margins in ways that you don’t necessarily know because you aren’t the expert.
They can help you improve your tax returns, they can assist you with identifying low-hanging fruit to increase your revenue, they can advise you on investments you will see – and can measure! – a return on.
When I mentioned earlier that you aren’t always in a phase of growth, improving your profit margins is a great example of this. In this case, it isn’t about increasing your sales or revenue but rather, identifying the opportunities around the revenue you already are generating.
Key Performance Indicators are the odometer of your business; they’re quantifiable measures used to measure your current performance so you can easily identify when to speed up, when to slow down and where you need to stay to keep you on the path to reaching your desired destination.
So now it’s time for your KPIs to join the Rhythm Nation and it’s their turn to ask YOU what YOU’ll be doing for them… because here are this week’s ACTION ITEMS for Key Performance Indicators:
1) ESTABLISH A BASELINE.
Start by putting some baseline KPIs in place. It doesn’t have to be anything fancy and it doesn’t have to be a complete picture – this is definitely something you can and should build on – but choose a few key areas that you invest a lot time, money and/or energy into that you have expectations for.
A good example for this – and a sweet place to start – would be any area you’re outsourcing. You want those people to perform for you, right? So why not let them in on what your expectations are!
Say you’re outsourcing your ad campaign management: it’s a good idea for you to put in place some KPIs for your cost-per-clicks and your conversion rates. This way, when you surpass or you don’t meet those expectations, you can look into why and use that information to make some very boss-level decisions.
Another KPI you can put in place – and this will be simple, low-lying fruit – but look at what the average open rate and click-through rate is for your email campaigns. This way, when you do monthly or quarterly reviews, it’ll be easy for you to see if your recent marketing emails were hitting the mark, if they fell short or they knocked it out of the park.
Which brings us to action item #2:
2) CELEBRATE YOOOOOUUUU
Celebrate consistency and give yourself the opportunity to surpass expectations.
There is nothing wrong, bad or boring about meeting your revenue targets and performance expectations. Especially when they include the expectations you’ve made for how you’re showing up and you made “taking Friday afternoon off”, for instance, a baseline indicator of your own performance.
You hear people talk about CEO Days? Yeah, those aren’t about big dreams and lofty goals – although they can be – but first you have to account for the work that’s already been done and assess whether you’re able to maintain that.
Maybe you can’t and it’s time to fix some things. Maybe you keep surpassing your expectations and it’s time to elevate those KPIs and put some “new normal” numbers in place.
But you don’t know if you don’t check in so set a CEO Day, boss, and make sure you’re running the kind of business you want to have.
Think of KPIs as the pulse of your business: something that has to happen consistently to keep your business alive.
They aren’t the most glamorous part of marketing but they are what make those sparkly moments possible and way easier to come by.