The KPIs You Should Spend your Time On, and the Ones You Shouldn't

August 13, 2020 | Author: Andrew Maff
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On the 14th episode of Marketing Interruption, your host Andrew Maff talks about the KPIs you should and shouldn't be paying attention to. He discusses the KPIs he believes you should be following; email list size, conversion rate, lifetime value, and clickthrough rate, as well as the KPIs he believes you shouldn't care about such as impressions/reach, social media followers, gross revenue, CPM, and traffic from social media. This episode may make you smile and it may upset you, but it's a good one!

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TODAY'S EPISODE:

0:25
Welcome to marketing interruption. A daily podcast powered by blue Tasker that interrupts your day with marketing news, tips and strategies from an entrepreneur who lives and breathes marketing. Now, let the interruption begin with your host Andrew Maff

0:42
Hello, and welcome to episode number 14 of marketing interruption. My name is Andrew Maff Stone I will be your host and today we are talking about the most important KPIs that you should and shouldn't be paying attention to. And I love this episode. The reason I'm gonna love this episode so much is because it's gonna stir up some shit now I love I love cars. And I love seeing marketers fight and comments. So I did I made a list of five that you should be following. That, to me seem obvious. And then five that you shouldn't be. I'm going to give you some insight on why I think all this isn't one of the one of my my, my things I've always said, I think I've said it several times in this podcast in the short time we've been doing it, that the most important KPI next to conversion is email, How big? And obviously, you're gonna want to there again, there's gonna be things in here that are dependent, and there's gonna be things on like, Oh, yeah, well, I don't care how big your email list is, if no one responds to an email, but I'm going to say, your ability to create email, so the size of your list. It's very, it's very relevant to a phallic response. In which case, it's not the size of your list, but it's how you use it. And if you don't use it, you lose it and There was another one, there was another one that my buddy told me it was hilarious like, That is disgusting. But essentially, that you know how to use it to Uh hum. But moving on email list size, your email list is very, very important. It is dependent on how you use it and how engaged everyone is yes, but your ability to grow emails is the second most important thing outside of an actual conversion. The second one I was going to do conversion rate, that one's pretty obvious. Again, I think all these ones that are general are obvious, but to me, these are like the ones where I go, Okay, if I had a dashboard, on a TV up in the office somewhere and I want to know what's going on, these are like the top five where I go, where are we at with this. And the reason I say a conversion rate is because it can tell you a lot. If your conversion rate is consistently, you know, at a certain number and then the next day it takes one of two things can happen. Your website may have gone down, you could have gotten up ton of traffic from something that you don't even know, there's so many things that can cause a conversion rate to fluctuate that if you see a conversion rate fluctuation, you immediately know something has changed what has changed. And obviously, the better the conversion rate, the better you're doing. But you want to know what has changed, even if it went up. So if you walk in one day, and you look at your board, and you go, Wow, my conversion rate is double what it was yesterday, that to me, even though it's a good thing could be a red flag, because it could also mean that some of the traffic you were driving before that normally wasn't converting as well. Maybe that traffic is just not being driven right now. So now you need to go look at your lead flow account or what your sales rep for that day or something like that. So it can still show you a lot about what's going on. lifetime value. This one is very important. And I'm shocked at how many people don't have an answer for this when I talk to them. I it's the next one. Actually, I'll jump ahead a minute here is your your CPI so your cost per acquisition and if you will are spending X to bring in a customer. And that customer, you know, first order with you or their first thing that they buy from you is why then all of a sudden, you can go great I made X on this on this sale. But a lot of times what so many companies don't think about is the lifetime value. Because if that customer if it cost you $5 to get a customer to spend $10 That's awesome. So you got $2 for every dollar you spent. But if that customer on average shops with you, or you know, stays with you for several contracts are whatever the businesses that you have, for a longer time, then who gives a shit if it costs you $5 if it cost you $10 it may cost you $20 to convert for a $10 order. But if that person consistently orders with you for so long, then that's much more important. So your average order value is interesting, but I really want to know what the lifetime value of that customer is because that's gonna tell me on average, I'm gonna make X on this person have I spent x it's basically Amazon This whole thing is why they spend so much money acquiring customers and putting out so much content and are okay with charging significantly less, because they know they're going to keep that customer and that they're going to spend x ry over that kind of stuff to an alphabet show with this, but they're gonna keep spending so much over a certain period of time.

5:18
The next one, CTR, so your click through rate. And the reason I picked this one is kind of it's basically your conversion rate for your paid advertising, right. And the reason I chose this is it does tell you a lot about your impressions versus your clicks, it tells you if the content and or your copy is good enough. And it will also kind of give you some insight into a lot of other things. So as I mentioned, conversion rate can tell you like what's working what's not. And if your click through rate is fluctuating, it can tell you that something really good is happening or something really bad is happening. Even if the click through rate has improved. It doesn't always mean that the solution or I'm sorry, the cause was was actually positive. So I always keep an eye on click through rate. And so now we're gonna go into the five things that I personally never really give a shit about and one of the first ones is my favorites or reach or impressions. So here's the deal. I have only I we don't work with very, very large companies often i'm not i'm not the marketing agency for coke. I wish I was. Pepsi won't take me either. But your reads your impressions mean nothing to me. If there's nothing else tied to it, it is the most bs manatee vanity metric that I've had so many marketers say like, Yeah, but we reached 2.4 billion people in the past month ago, but great, I don't care did how many of those actually bought like, it means nothing to me. Now no brand awareness is very, very important. And brand awareness is definitely something that needs to be focused on. And I'm always interested in what how many people we did reach, but I'm never adjusting my copy or my creative or anything like that to try to reach more people just to hone in on that one metric. Basically, I use that metric is a great we reached a lot of people and we brought some brand awareness But I'm currently more more focused on how is my conversion doing? How's all that other stuff?

7:07
The next one social media followers don't care. Great. You have 5000 million followers, which isn't even a number, but it's a thing. And you have 400 million people follow you on Instagram. And when I make a post for people like it, bite me, I don't care how many followers you have, it means nothing. Your engagement rates a different story, because that will tell me your followers versus how many people actually care. But I don't care about how many social media followers you have. And that stands for businesses and brands to not just noxious influencers. Um, this one's interesting. gross revenue. don't really care. Only because it's a vanity metric, like great we did $1.2 million this month. It was our biggest month ever. Awesome. How much did we spend 1.4. Well, look, that's crap. Like, I don't care. Then oh it's ecommerce oh we did $500,000 this month awesome but how many of those did we give out 60% discount coupon to like all of them great that means nothing to me we lost money so the the gross revenues interesting it's a definitely a vanity metric. I like using it to more kind of help with company culture just because to me it's a little bit easier to kind of understand like, Hey, we hit this new milestone of this much money and as long as our profitability kind of remains then great. So gross revenues interesting, but I always like to know not necessarily bottom line but somewhere in in bottom line, and you can't live off bottom line which by the way, we'll probably be another podcast I'll do a CPM. your cost per viewing thousand people. I don't care. Great, awesome. Obviously cpms are all up and down right now because of the earliest on Facebook ads because of everyone kind of leaving Facebook for a little while there. But it doesn't mean much to me. It is something I look at all of these. I definitely look at them. I don't ignore them, but they're not something that I make rash. decisions on CPM is kind of telling me more where, where the that platform that I'm using is or where the industry is and less about my ads, unless I look at one specific ad, and it's got a great relevancy score and showing significantly more. It's a different story. But I usually don't care that much about CPM. Last but not least, website traffic from social media. So this one's interesting. And the reason this one's odd is because it kind of counter it's counteractive to my first one I did which was impression and reach. So the traffic you're getting from social media is not what social media is for, unless you're running a lot of ads. And obviously, you do want to drive some traffic to social media, but it's much more of a brand awareness play. So if you're doing if you're able to reach several million people on Facebook, but none of them are clicking over, I would still tell you yes, you need to continue to do that and build brand awareness. Maybe I won't put as much like capital behind it or maybe I won't put as much work behind it. I don't care how much people are driving my website because a lot of people, they'll see you on Facebook, but then they'll go Google you later. And then they're coming from Google and you go great. I should spend more money on Google, but it doesn't work that way. So a lot of these people are gonna disagree with so feel free to email me marketing, automation marketing. I keep doing that marketing interruption@bluetuskr.com tell me whether you agree or disagree or if you have any questions you want me to go over this week, next week or any other week, and I will see you all tomorrow.

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