It’s almost impossible to be an entrepreneur or a marketing professional without knowing something about metrics. We’ve probably quoted Peter Drucker’s famous “what gets measured, gets managed,” more than once on this blog, and that management principle applies to almost everything you do.
Unfortunately, while nearly all business professionals realize the importance of measurement, very few of them fully understand how to use it properly. Today, we’d like to discuss a few fundamental mistakes most business professionals are making with metrics, and how you can beat them at that game.
Metrics and Goals are Two Different Things
While we all understand that goals and measurements are two very different things, most business professionals tend to act as though the primary purpose of metrics is to measure whether goals are being met. Undeniably, this is one useful way to take advantage of metrics, but it’s not the only one.
Metrics have a different, more fundamental way of benefiting businesses. They help us understand how our business actually works. When we stop measuring goals and start measuring impact, we start getting results.
Start With Opinions, Not Facts
When we say that marketing is a science, it doesn’t mean that you start with the facts, because that’s not how science works. It means that you start with a hypothesis, and you test that hypothesis. Conversion rate optimizers understand this better than anybody else in marketing. They start with hunches and educated guesses about how to improve conversion rates, then they statistically test those assumptions in order to boost ROI.
To some extent, this is how you should approach all management. There are strategies you believe in, and strategies you don’t. Recognize those biases, and then test them. The intersection between intuition and hard evidence is the quickest road to success.
This gets to the heart of what we mean when we say “measure twice, cut once.” If you’re sloppy or undisciplined about measurement, you will waste resources. As tempting as it is to just eyeball data and use it to tell stories, if you aren’t being scientific about your approach, you are going to keep making mistakes and wasting resources.
It all comes back to the Pareto principle. Without disciplined measurement, 80 percent of your resources are basically wasted, because they only produce 20 percent of the results. Good measurement eliminates this waste, and can quintuple your results.
Build a Model
Business is an unpredictable science, but the better you are at making predictions, the better your edge over the competition. This is what models are for. A model is an evidence-based, theoretical framework that you can use to make predictions. Not crystal ball, hocus pocus predictions. Scientifically valid, experimentally tested predictions about what you can do in order to improve results.
Models don’t have to be all that complicated. If your model is a linear equation straight out of an Excel spreadsheet, that’s already many times better than anything most of your competitors have.
We live in the age of big data. Businesses that understand how to cash in on measurements will outperform their competitors. While intuition is powerful, it’s most useful when combined with the discipline and efficiency that measurement brings to the table. Learn how to harness both.
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Original Source: localsurgemedia.net/austin-community-and-business/measure-twice-cut-once