Most people wonder how they can grow a business from a small entity to something very big. The reality of it is that everybody starts at zero. What most people don’t take into account is that a new business’ revenue does not always ascend and go up to the right. Yes, growth is the most important aspect of a startup business, but the process moves in all directions. For example, what is Whole Foods Market today used to be a small health food shop in Austin, TX. They were prepared for the fact that growth is a process and isn’t always ascending upward, even if you hire the top dog in marketing. We are all in a journey and even the top dogs go through a horrifying process to get where they are.
In order to grow most people start looking at different dashboards and metrics to help them discover what’s working and what isn’t. Most startups and business owners turn to their numbers and data points. How many downloads did their app receive? How many paid views did they receive in the last 30 days? How many signups did they receive? What is their DAU vs. MAU ratio? What are the D7 retention and D30 retention? Do all these matter? Could all these numbers just be a bunch of noise?
Count Your Customers First
The most important item fundamentally is how many people are actually using the product or service and how often they are using it. Make a note of the number of users who are taking action every day. For example, LinkedIn wanted to focus on business owners being able to find relationships and be found. Of course,Facebook concentrated on staying connected with friends. Expedia focused on people who want to plan a trip. These are a few of the only metrics they measured.
Best Practice: Make sure your business is top of mind when it comes to searching for the metric you are looking to measure. For example, when people think about planning a trip they go straight to Expedia because it is top of mind.
Measure How Often They Return
Do you see how in all these examples it does not matter how many sign-ups they have, downloads they got, the MAU or DAU. They are focused on the most important metric for their business and the growth of that metric. In this case it is the usage and it does not have to be usage everyday.
Next, how often are your customers using the product or service? Are they using it a few times a week or a few times during the month? Remember, not every product is supposed to be used every day.
Best Practice: Ask your users when they would like to see information from you. “Onboard” your users into taking action. The first step to onboarding users is through education. Teach them everything they need to know in order to get the most out of the product or service. They are there to learn, but don’t rush them into anything. Then ask your users to come back and share the learning if they don’t come back after the first day. The last technique is to use pressure to invite people to use your product or service. Incentivize your core users to share content with their friends and invite them to “like,” “share,” or “comment” on their content.
Will They Keep Coming Back?
The last thing you want to keep a track of is whether your customers will come back. What is your retention rate? How sticky is your service? Find out who the most active customers are and learn what they do, that other users don’t do. One way to increase the “stickiness” of your product or service is through virality and getting customers to refer you. What is the one reason they will refer your service to someone else?
Virality comes in three different forms. First, there is word-of-mouth virality. For example, I can say I had a wonderful experience with Twitter, I think you should use it too. The second way is to have your core users demonstrate virality by having them share content you put online. For example, I can share pictures from Instagram and friends will want to know where they came from. The third and last way is to incentivise virality, so that core users invite their friends to use the product or service. For example, if I use Snapchat to share my pictures, and my friends want to see them, they have to start using Snapchat, too.
Best Practice: Create a 28-by-28 matrix and analyze how many days your customers used the product over four weeks. Then on the other end of the matrix you want to measure the percentage of users who used the product in the first month, and who are using the product in the second month. For example, if you visited Twitter seven times in one month, then you are more likely to visit the next month.
About Your Columnist
Sweta Patel is a featured columnist for Women Taking Charge, the official blog of Connected Women of Influence, where she covers everything about social media and lead generation online. Sweta is a San Diego-based marketing entrepreneur whose company is Global Marketing Tactics.