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In Episode #370, Eric and Neil discuss how to determine your one key metric. When you establish a set goal or priority, then all your tasks will follow suit to achieve that goal. But what IS that one measure that you look to as a company? Tune in to know what your one key metric is and why knowing what you’re after will set you up for success.
Time Stamped Show Notes:
- 00:27 – Today’s topic: How to Determine Your One Key Metric
- 00:36 – Josh Elman coined the term “one key metric”
- 00:40 – When starting a business and using Twitter, your one key metric will be the number of tweets you want to hit
- 01:09 – First, determine how people are using your product—the core functionality of your product
- 01:20 – Then figure out if that one key metric is the one to go after, then work from there
- 01:35 – “Figure out what you’re really after and what’s going to impact that”
- 01:40 – If you want to increase your revenue, figure out the different sources of revenue
- 02:09 – Then you can have control and manage that one key metric
- 02:21 – The purpose of Airbnb is to book a place to stay
- 02:26 – The core action is searching and booking your accommodations
- 02:36 – Another example is Yelp where you find different local businesses and review them
- 03:18 – Neil’s one key metric for Crazy Egg is the number of tests done a day
- 03:43 – Marketing School is giving away a free 1 year subscription to Crazy Egg which is a heat mapping tool that helps you increase your conversion rate
- 04:28 – Go to SingleGrain.com/giveaway for multiple entries
- 04:33 – That’s it for today’s episode!
3 Key Points:
- Knowing your one key metric helps you focus your tasks accordingly.
- Establish what you’re really after and what’s going to influence that.
- If you want to increase your revenue, then think solely on your sources of revenue.
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Full Transcript of The Episode
Eric: Welcome to another episode of Marketing School. I'm Eric Siu.
Neal: And I'm Neal Patel.
Eric: Today we're going to talk about how to determine your one key metric. This is some lingo from start up land. This is a term that I learned back in the day from Josh Elman. Just a refresher on the one key metric. This is when you're starting a business out. Let's say you're Twitter for example, and you're one key metric is to get a user up to a certain amount of tweets, for example. For Facebook it's they wanted to get people up to ten friends or so, because they know once they got people to ten friends that they would be a lot more engaging user and that's the kind of user they wanted. The question is: How do you go about determining your one key metric?
From my perspective, it all goes back to are people actually using your product at all? If they are using your product, what's the core functionality? What's that one key thing that you want them to do? From there you can start to figure out if that one key metric is the right metric to go after. Then work from there, but if you just google Josh Elman, one key metric, you can find more literature around this.
Neal: What you needed to figure out for your business is what are you really going after, and what's going to impact that? If your goal is to increase your revenue, then cool. Revenue can be your key metric, but you need to dive down a bit more and be like, "All right, what impacts revenue more than anything else? Is it daily number of sign ups? Okay, what impacts daily number of sign ups? Oh that's visitor account. Which visitor sources convert the best? Oh, Google converts the best in Facebook. All right, can we leverage Facebook ads or whatever it may be." You need to really drill down to figure out what's causing your main number to move up or down, that way you have somewhat control. Then you can try to adjust it, tweak it, optimize it, so that way the main metric that you're really trying to grow increases.
Eric: Give you a few examples from Josh Elman. He actually has some slides. With Airbnb, the purpose of the service is to book a place to stay. Then the core action is you're searching and booking trip options. The cycle is you're hoping people do this three to five times a year. That's just Airbnb. Another example would be Yelp. Yelp is you're basically finding different businesses and services that you want to use locally and you're reviewing them. The core action and cycle is you basically have people searching for businesses two to three times a week. I certainly do that. Then reviewers you're hoping they write a new review once a month. You need to figure out what the purpose is and then what the core actions are and you can figure out what your one key metric is. Then you can also even go into numbers like the numbers that Neal's talking about as well.
Neal when you look at kiss metrics or Crazy Egg or any of your tools, did you guys have any examples of key metrics or that one key metric?
Neal: Sure. Our one key metric with Crazy Egg was how many tests are people running per day. We knew that if they were running tests that means they were improving their websites, which is our goal from the product. As they improve the websites, they're going to keep using it and as they keep using our product, of course, they're more likely to keep paying for it over time.
Eric: That's all we have around this, but before we go, we do have another special giveaway for you. This is Crazy Egg, which is a heat mapping tool. That is Neal, so Neal what's a brief over view of Crazy Egg?
Neal: Crazy Egg is a visual analytics tool. It shows you where people click, where they don't. You can even see mouse recordings and video recordings of how people navigate through your site, so you can determine where people are getting stuck. You can see scroll maps, which show you how far people scroll down and what areas of your site may confusing for others. Then, best of all, there's a WYSIWYG editor. You can make changes to your site using it, and with a few clicks of a button you can also run some AB tests.
Eric: Great, so that's it for today. If you actually want to get it on this giveaway, it is a one year annual subscription to Crazy Egg, and we're giving away one per week. You can actually get multiple entries to this. If you want to learn more about this giveaway just go to singlegray.com/giveaway to learn more, and we'll see you tomorrow.
Neal: This session of Marketing School has come to a close. Be sure to subscribe for more daily marketing strategies and tactics to help you find the success you've always dreamed of, and don't forget to rate and review so we can continue to bring you the best daily content possible. We'll see you in class tomorrow, right here on Marketing School.
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