Year-over-year performance – how do you measure it?
My experiences in fast-growing companies revealed a variety of ways people measure growth. The one that always gives me heartburn is year-over-year growth. It is frequently stated as a ratio of your current performance to same month or quarter in the previous year. Here what makes this challenging: What happened last January? Any big customers wins? Or losses? Is your business seasonal? Did any business slip a month or two? Any economic shocks (think last October when everything stopped for a few days) How many days in that month again? (Yes, last February had 29 days) Beware of these comparisons. I prefer measuring the change in the annualized or quarterly run rate. These numbers are less susceptible to one-time events and/or optimistic interpretation. To quote a Wall St. friend, we live in a second derivative world. The change in the growth rate both thrills and scares people. I am suggesting that you look at the underlying numbers carefully and make sure they are not full of special factors that skew results. Most businesses have a natural rate of growth based on its core customers and markets. Talented managers can change the slope of the curve while pretenders manipulate the numbers. Be careful out...
Are the good things in life really free?
My life has been taken over by free (or almost free) things. Here are some examples: We decided to use WordPress for a company knowledgebase rather than purchasing from a leading a SaaS vendor. We finished a webinar that yielded over 1,800 signups. We used Gotowebinar ($99/month) and emails our house list (~$400). That is $0.28 per lead for those keeping score at home (about 50 to 100 times less than most B2B marketers expect). Organic search and social media are the fastest growing parts of referrer traffic at Tangyslice and Firstgiving. I chatted on Skype with my parents during their recent trip to Costa Rica. I sold my wife’s minivan (ok, snicker away, it was my idea) on Craig’s list. After flailing for months without a calendar or contacts on my phone, I discovered Google sync for my Blackberry I stopped reading the daily newspaper now that I seem to get all my news through free RSS feeds. Are you feeling the power of free? Any other great free stuff to...
Selective Neglect
Early in my graduate school experience I learned a valuable lesson. We had six classes each with a theoretical two hours of homework per class hour. This added up to something like 60 hours of class and homework excluding the team meetings to coordinate group projects. After a futile effort to “do it all”, I discovered the joys of “selective neglect”. I learned to make the hard decisions about what not to do ahead of time and living with the consequences. This doesn’t necessarily mean slacking but instead spending time upfront making and communicating your priorities. It is better to make the decisions than to have them make themselves. If you are like me, January was a month of unbridled optimism with great things in mind for the new year. All of those programs that never quite got done last year are now on your 2009 marketing plan, right? Well, February’s reality has set. Your resources haven’t changed much (if at all) yet you have made commitments you need to keep. So what can you do? Working every weekend is a real option but in the long run it isn’t sustainable. My answer is ruthless prioritization and clear communication. It isn’t always straightforward. As I often say to my teammates, it is easier to decide what you will do than what you will stop doing. So what are you going to stop...
How many KPIs do I need?
It always starts off with a simple request for KPIs or key performance indicators. The challenge I often see is cutting through the noise and actually getting to the metrics that are truly “key”. So what makes a KPI? Here is my list: It is connected to your strategic or tactical goals It is unique (i.e. it is not strongly correlated or a subset of another KPI) It is diverse (think about a balanced scorecard of indicators) It can be calculated in a clear and consistent way (i.e. no debates about where the number comes from) Your team “buys-into” the number It has an owner who works toward improving it For an a small team, I generally like no more than KPIs (ideally 1-2). If you feel the need for tracking every possible operating number, then create a separate spreadsheet filled with metrics. You can always graduate (or demote) metrics if you identify trends that are connected with your successes or failures. For a company or larger operating group, I like to keep the KPIs to under 20. More than that and they are a list of metrics rather than key performance indicators. In the end I prefer to make the difficult decisions about what numbers are truly important and track those. The rest are just numbers about your business. So, how many KPIs are you...
Your marketing budget was cut, now what…
The coming year is likely to be challenging for most marketers as we are asked once again to do more with less. While a smaller budget typically means fewer marketing programs, it doesn’t necessarily mean you have do scale back expectations. Crafty marketers are always looking for innovative ways to get the same results out of a smaller budget. This means relentlessly evaluating legacy programs and testing new cost-effective approaches. Here are seven low cost/no cost marketing ideas to try in 2009: Review your organic search strategy and make adjustment to your keywords. Create a link building plan. Dust off that blogging plan your wrote three years ago. Contrary to the pundits, blogging is alive and well. Start a customer referral program. If you already have one, talk with a few of your top customers to understand what you can do to make it more attractive. Open a Twitter account for your company. I know this is trendy but it is where the action is today. Brainstorm a word of mouth campaign to generate new leads. Review and refresh all offers on your website for free content, webinars or trials. Now is the time to make them irresistible. I know there are probably many more things you can do. The point is that it doesn’t always have to be the standard paradigm of run a program, generate a lead and close the lead. Inbound marketing is all where all the action is today and this requires more innnovation and testing. So what new things are you testing in...
