Today, we will be discussing the concept of Key Performance Indices (KPIs) and their importance in measuring success. A KPI is essentially a measurable value that shows the progress towards a specific goal. For instance, weight is a common KPI for many people. However, the challenge with this type of KPI is that it is a lagging indicator, meaning it only tells us what has already happened, not what is going to happen. In a business setting, it is more valuable to use leading indicators, which are KPIs that predict future outcomes, in order to make adjustments and achieve our goals.
For example, as a solo entrepreneur, we may be most concerned with the amount of money our business makes, whether it be revenue or profit. However, once January is over and we know how much money we made, it is too late to make adjustments to achieve our goal of growing our business in 2023. That's why we need to be measuring things that are related to actually achieving the goal, not only measuring whether or not we achieved the goal after the fact.
One example of a leading indicator in a business setting could be using affiliate marketing as a way to predict and potentially achieve a goal. By closely monitoring the progress and success of our affiliate marketing efforts, we can make informed decisions on how to adjust and improve in order to reach our desired outcome.
In conclusion, leading indicators are crucial for predicting and achieving business goals. We hope you found this information valuable, and encourage you to look into more resources on KPIs and leading indicators to take your business to the next level.
Today, we're going to talk about how you can achieve your 2023 goals. The first step is knowing exactly what you're doing and why you're doing it. There has to be an intrinsic reason that really motivates you.
But I'm here to tell you today that that is not enough. There is some secret sauce that I've been using for the last 30 years and that is the use of key performance indices (KPI). It is measuring something that is critical to your success. If you are trying to lose weight, you are going to weigh yourself routinely to track your progress, for example.
The challenge with this kind of key performance index is that it's a lagging indicator. It doesn't do anything to help the person understand what I'm going to weigh next week. For example, it doesn't tell me that this weekend I'm going to go to a blowout party, eat a bunch of hot wings, and drink a ton of beer and on Monday, I will have put on five pounds. So what we really want are not these indicators that tell us what already happened. What we really want in our business is indicators that tell us what's going to happen.
So typically in a business, the kind of indicator we would be interested in, especially as a solo entrepreneur, would be the amount of money that we make. If we've got goals around growing our business in 2023, we really need our key performance indicators that will help us make adjustments and predictively achieve the goal. That means we need to measure things that are related to actually achieving the goal, not only measuring whether or not we achieved the goal after the fact.
Let's say you're an affiliate marketer and your goal is to make $10,000 a month. One of the key performance indicators that you're going to measure is how much money you make this month — but that's a lagging indicator that doesn't really help us make adjustments along the way.
A simple leading indicator that you could use in this case is linearity to your monthly goals. Let's say that your goal is to make $10,000 this month. That probably means, depending on how your business is structured, that you need to make $5,000 by the 15th (because that's half of $10,000). That can be a little lumpy and maybe it won't quite be linear because you're doing promotions that are on a particular schedule but in general, you can add checkpoints along the way to let you know if you're headed in the right direction.
Let's say the affiliate offer that we're promoting pays a hundred dollars. We know that we need to sell a hundred of these in order to make $10,000. How do we close those sales? Let's say one in every 10 people that we send to the offer buys the offer – our conversion rate is 10%. So that means we need to send a thousand people to the offer in order to get our hundred sales this month.
One leading indicator here is how many people have we sent to the offer because if we're not sending enough people to the offer, that's something we can do something about, and that is going to affect our goal.
Another key performance indicator that's a leading indicator is where these people are coming from. Is it paid? Are they coming from social media? If they're coming from social media and you're measuring the number of visitors to that page and you find that you don't have enough visitors, what does that mean? It means you need to adjust your social media strategy. Or maybe you can understand that if your conversion rates or cost-per-click on your paid advertising are too high or you're not getting the right conversion rate or right click-through rate for paid advertising – all of these things can be turned into key performance indicators that predict whether or not you're going to achieve your monthly goal.
If your monthly goal is critical for you to achieve your 2023 goals, then you have to be accountable to these indicators. You can do that in a number of ways – you can have some kind of accountability partner, you can just track it yourself and put in a reward system, or you can assign a VA to collect these metrics and present them to you to help hold you accountable. Don't make it difficult to pull the statistics, it's gotta be right there in front of you. There are softwares out there that you can use that makes dashboards and they can pull data from various platforms, or you can use Google Sheets.
Also, don’t make your KPIs too complex. You don't need 50 key performance indices. Key means the most important handful of indices for your business that you can really use.
Holding yourself accountable to KPIs is the magic that will get you from point A to where you want to be – point B.
Links Mentioned In This Episode
- Episode 226
- Episode 227
- Send me feedback at [email protected]
- Subscribe in iTunes, Google Play, Stitcher or Spotify
Help Me Help You Succeed Online
The more I hear from you about your struggles, trials and tribulations, the more I can help. So, be sure to leave comments on this post to reach out to me on Twitter or in the Late Night Internet Marketing Private Facebook Group
Tell Me What You Think
I'd love to hear what you think about the podcast. Better yet, Id love to answer your question about Internet marketing on the show. Just drop me a line here on the blog or on the digital recorder at 214-444-8655. Dont worry, there are no stupid questions. Unless you tell me not to, when you ask a question or leave a comment might even use it on the show.
Help Me Help Others
Thanks so much for your reviews on iTunes. We get a ton of exposure from iTunes, and we really appreciate the reviews there. At last count, we were over 100 reviews worldwide and counting. Reviews help us get new listeners — so I really appreciate you taking the time to leave a review on iTunes (link).
Get The Episode Transcript
Interested in the transcript of this episode when it's ready? Transcripts are available to all of my subscribers. You can find them along with all the other episode transcripts and special bonus content in the Late Night Internet Marketing Podcast Vault (sounds mysterious, doesn't it?)