When I set out to start my first SaaS business, my dream was to build a product that delivers unquestionable value at scale. The second part of that vision was to build something that grows consistently and predictably over time.
I believe that with Restaurant Engine, I achieved the first part. It has proven it’s value to a number of customers, and the business model scales nicely.
Now my focus has moved onto growing the business. Up to this point, our customers have primarily come through organic channels: Search, referrals, and offline word of mouth. Now the challenge is to uncover the strategies that will push growth further (and faster).
In my last article, I detailed our system for selling, which covered how we’ve overhauled our system for capturing leads, filing them in our CRM (Trell0), and getting on the phone and following up.
Today I’m sharing the next step in this process: Making it all measurable and data-driven. I think I’ve finally figured out how to tame the metrics in my business. I’ll share my system with you in a moment. But first, how did I get here?
I tried many new strategies over the past two years, without really knowing which ones are (or aren’t) moving the needle.
I’ve been shooting in the dark. I know that the only way to make progress is to keep a close eye on the metrics. For me, that’s proven to be easier said than done.
I’ve had Google Analytics installed since day one. And I’ve tried all of the other analytics tools and sliced and diced the data. The only thing the data tells me is that organic is our most reliable source of new customers. Great. But I already knew that. I need the data to tell me something I don’t know.
So maybe I’m just measuring the wrong things. In some cases, I haven’t found an easy mechanism for measuring certain key metrics. For example, it’s difficult to track customer signups when they open their account over the phone (which many of them do). These signups won’t show up as Goal conversions in Google Analytics.
But most of the time, my challenge has been about the process. I simply haven’t learned how to be consistent about reviewing and analyzing the metrics. It hasn’t been engrained as part of my routine. And for that reason, metrics haven’t played much of a factor when deciding on new strategy directions.
Why has this been such a challenge? Is it just me? Possibly. I’m a visual thinker who likes to find the simplest way of looking at things. Digging deep into charts and spreadsheets isn’t something I particularly enjoy.
For a while, I assumed that was it. I read countless blogs about conversion optimization, SaaS metrics, and the like, and still couldn’t find ways to tame the metrics in my own business.
But then I realized why all of those articles couldn’t give me more than a general, broad strokes understanding of metrics. Just like everything else in this business, metrics is something I can only learn by doing.
Every business operates differently. Customer acquisition funnels come in all shapes and sizes. For example, some apps offer free trials, while some have completely free plans. Others don’t have any free option. Some are one-off purchases, others are recurring like SaaS. Some have a setup fee, most do not. Some rely heavily on making the sale over the phone or in person. Others stick to a 100% web-based checkout.
No single article can teach you how you should be measuring the metrics in your business. And in my experience, there isn’t a single tool for the job either. It was this realization that led me to finally figure out how to make it work for my business.
In fact, yesterday, after running a metrics report, I was able to uncover a key insight, which prompted me to shift our marketing strategy in a new direction. In the past, changes like this one would have been based solely on a hunch. But this time it’s backed up with hard data. That’s how I know my new approach to metrics has finally “clicked”.
Here’s the system that seems to work fairly well for me. Maybe some of these ideas will work for you in your situation.
I learned that it’s all about cementing a consistent routine. In the early days, I just logged into Analytics whenever the mood should strike (which frankly, wasn’t very often). Obviously that’s not a very effective approach. But to be fair, I don’t think metrics should be a top priority in the very beginning. In the early days, the focus should be on talking to customers, refining the product, messaging, and the value proposition.
Then I began making it a monthly task to review the numbers. This helped me gain a sense of the big picture. I was able to see how our customers and traffic grew from month to month. Good to know, but not very actionable.
A few weeks ago, I began a weekly routine of running my metrics report. In fact, it’s set in my calendar as a repeating to-do, every Friday morning. The idea came from reading Buffer’s blog. Such a simple change, I can’t believe I never thought to make it earlier.
Moving to weekly metrics reports made all the difference. Most of the activity in our business happens weekly. Our blog article and newsletter go out weekly. Seven days is a good period of time to test a new headline, or gather enough conversion data to make a decision. When my metrics reports are tightly focused on 7-day periods, it’s much easier to tie specific activity (for example, a particular blog topic, or a new ad placement) to specific, measurable results (number of new leads and new signups).
I always try to keep things simple. But simplicity is hard to come by in today’s analytics tools. So I learned that it’s best to focus on metrics first, tools later.
Before you decide which tool to use for tracking metrics, first figure out what are the key metrics you need to watch. And don’t just list the ones that every marketing blog talks about.
Think about your business. Think about the things you’re doing right now. Think about the marketing strategies you’ve been trying or might try in the future.
Now think about which data would help you do those things better (or make better decisions). What are the key pieces of info that might prompt you to change course in some way? These are the metrics that matter to you.
Here are the ones that I came up with for my business, and why:
I learned that I can’t rely on a single metrics tool to report and organize all of the things I need to track. So I gather data from several places, and organize it all in Google Spreadsheets. I went through several iterations of my spreadsheet before I figure out the most useful way to organize it.
My goals for the perfect spreadsheet were:
At first, I tried building a single, massive spreadsheet. That didn’t last long. It was just a wall of numbers, with no way to compare weekly and monthly trends. Plus, as our marketing changes (and it changes often), it throws off the whole spreadsheet. I need something that’s fluid and can easily change along with our changing strategies throughout the year.
So I decided on a multi-sheet approach. I started by creating a folder in Google Drive called “Metrics Journal”.
Within my “Metrics Journal” folder is a spreadsheet for the current month, which I named “April 2014”. The benefit of having a different spreadsheet for each month is I can keep the rows of metrics relevant to whatever’s going on in our business at the current moment. But I still have ability to open up previous months to compare notes.
The monthly spreadsheet has 5 tabs: One for each week of the month, and a fifth for the whole month recap. The same set of columns and rows are copied to each of the weekly tabs. This makes it easy to flip between consecutive weeks and see how the numbers change.
I organized the spreadsheet with the following columns:
Here’s a public version of this spreadsheet, if you’d like to try it. To use it, click “File” > “Make a copy…”, then adjust the rows and columns as you like.
As I said, I run my weekly metrics report every Friday morning. It’s a very time consuming process to gather up each of the data points. It takes me about two hours (but soon a lot of this will be outsourced. More about outsourcing in a moment).
Let me describe some of the ways I gather up the data:
I gather up the hard data from the above sources, and manually enter it into the spreadsheet. Then there are the calculations, like conversion rates and cost per customer. These are done automatically in the spreadsheet (you’ll see that I marked these cells in light yellow, which indicates they are calculations, not hard entry).
This is my next step. Soon, I’ll be bringing on a new teammate to help with running these weekly reports. Their job will be to follow the instructions (which are linked right from the spreadsheet) to gather and enter all of the hard data each week.
With the data prepared each Friday, all that’s left for me to do is log in, study the numbers, and draw meaningful conclusions about the trends. I’ll note these in the notes column, and keep them in mind as I set my to-do list for the next week.
As always, much can be improved. Here are a few things I’m thinking about for the coming months:
Tell me how you go about watching your numbers from week to week. I want to compare notes and figure this metrics thing out, once and for all.