Episode 28 of the podcast is my last episode with guest host Ayngelina Brogan and we’re wrapping up the month with a topic that is one of Ayngelina greatest strengths and something she embraces in full: using data and metrics to increase her productivity and better manage her time - not to mention to make sure she’s profitable!

As creative business owners, it’s not uncommon for us to ignore our key numbers entirely or, focus on the wrong ones. But revenue doesn’t mean much if you’re not profitable. And how many Instagram followers you have doesn’t mean anything if they don’t engage with your or, more importantly, buy your work. Getting caught up in vanity metrics on platforms you don’t own can be downright dangerous to your business.

Every business will have different metrics that are important to them. But focusing on the right ones for you can not only ensure you take home a profit, it can also ensure you don’t waste your time. Key metrics can show you where to invest in your business, where to spend your time and how to ensure we’re being productive - truly productive in a way that profits our business. Not in a way that keeps us “busy”.

Listen To the Episode

Here’s a direct link to Episode 28 - or you can listen via the players below:

what are your key metrics?

Ayngelina runs a business that’s focused on digital content creation: blog posts, YouTube videos and photography. As she says in the podcast, her biggest metric is money. As in, how much money goes into her bank account at the end of the month.

A large portion of her revenue comes from ad revenue and sponsored content - both of which rely heavily on traffic metrics like website sessions, page views and video views. So those are the metrics she pays closest attention to and she dives deeper into all of them: where is that traffic coming from, who is referring people to her, who are the people seeing her content.

What are the key metrics for your creative business? Website traffic might not be your most important metric. Here are some metrics that can be important to creative business owners:

product sales (revenue)
product margins (profit)
expenses (take away from your profit)
sales by channel like Etsy, Shopify, newsletter clicks, etc
shop visits
email lists - do you know the average dollar value of your email subscribers?
newsletter opens and clicks
growth metrics - are sales increasing, are people in more locations finding your work, etc.
social media engagement numbers
event attendance/ticket sales
course enrollment or course completion by your students
your cost of goods (how much it costs you to make your product)
shipping costs (how much does it cost you to get your products to your customers or wholesalers? how much does it cost you to get product shipped from your suppliers)

Some metrics, like social media followers, are what are known as “vanity metrics”. In other words, they look great but may not actually contribute to your bottom line in a meaningful way.

Take some time to sit down and determine what the key metrics are for your business. Make a list and start tracking. If you’re not sure what your key metrics are, sitting down with your accountant for 30 minutes can be an eye-opening experience!

What Are Vanity Metrics?

Vanity metrics is a term that’s often used to describe numbers that look or sound impressive but that don’t actually contribute to the overall health of your business on their own. That doesn’t mean they can’t be important but, in order for them to be meaningful, you need to measure them against something else.

For instance: You have 500K Instagram followers. That’s an impressive number but, what does that translate into from a revenue standpoint. How many of those followers contribute to the overall health of your business? What percentage of them purchase products from you? How many attend your workshops or your online classes? How many visit your website, listen to your podcast or watch your YouTube channel? How many of them actually see your Instagram content? How many of them engage with you?

If you’re spending a few hours a day on Instagram but you don’t know what your follower count actually contributes to your bottom line, how do you know if you’re using your time wisely? Will an extra 5K Instagram follower impact your bottom line? How long will it take you to get an extra 5K followers? The answer could be YES, an extra 5K Instagram followers will impact my bottom line by 25% and it is a wise use of my time! Or it could be no. Either way, those are questions you need to ask yourself around those kinds of metrics.

Think effort vs profitability.

Having a business that does half a million in revenue every year sounds fabulous but, how much of that money goes into your pocket at the end of the day? If your expenses are 501K a year, your business is not profitable and that revenue number isn’t quite so impressive anymore.

As a single number standing on it’s own, a vanity metric doesn’t mean anything very useful. It’s just number.

Weighing Your Time VS your goals

Once you’ve established what your key metrics are, you need to take a look at how you’re spending your time. Does how you spend your time every day reflect what’s really important to your business?

One area we talked about was Pinterest. A lot of creative business owners spend a lot of time on Pinterest and Ayngelina is one of them. But do you know if the time you’re spending on the platform is paying off for you?

Ayngelina dived into the numbers and found that yes, it was paying off for her. Pinterest is the source of a lot of her website traffic, for which she can see a direct correlation in ad revenue. So not only did she increase her efforts there, but she hired somebody to help her with it so she could invest her time into creating more content.

The person she hired (her sister!) spends time pinning, reviewing Pinterest stats and tracking what works on the platform and what doesn’t and continually tweaks their pinterest strategy - something Ayngelina probably wouldn’t have time to do on her own. So not only is she figuring out where her time is better spent, she’s hired somebody who can make Pinterest work even harder and drive more traffic, thereby increasing revenue even more.

Creating Systems Based On Your Metrics

Carrying on with the Pinterest example, by knowing Pinterest traffic generates a significant amount of revenue for her, Ayngelina was able to justify the cost of hiring her sister. As her sister became more comfortable with the platform she got faster and more efficient and was able to put systems in place to manage the platform. Ayngelina created pin templates so that pin creation took minutes instead of hours.

Putting efficient systems in place around tasks that generate income can actually increase revenues and, the efficiency can lower the cost of that task, thereby increasing the profit on that revenue. This is the type of thing you want to look for in your business.

Where can you implement systems that speed up the work and make it more efficient? Can you hire somebody to do those things who is better at it than you who can generate even more revenue and profit from it than you can?

Start Batching In Set Blocks of Time

Now that Ayngelina knows her numbers and has figured out how much Pinterest contributes to her bottom line, she’s decided how much of her time Pinterest deserves each week and she’s very strict about it. She sets aside that amount of time each week and sticks to it. And because she knows that’s the only time she gets to work on it, she keeps focused.

We covered batching and time blocking in Episode 13 but it can be a very productive tool for your business because it relies on systems and being streamlined. It also allows you to focus on one thing at a time, which for most of us, results in greater productivity.

Switching from task to task takes up a lot of brain power and never really allows you to get into the meat of the task. But by batching you give yourself the opportunity to really focus on a task for a prolonged period of time and get more of it done. You free up mental energy and slip into a groove.

For creatives, ideally we probably want to batch our admin tasks like packaging, shipping, bookkeeping, replying to emails in smaller blocks and reserve our bigger blocks of time for actually creating and product development.

But what’s important is, you need to use your numbers to know where you put your time. Maybe the first places you hire help are some of those smaller tasks like packaging or bookkeeping where it’s either easy to train somebody or, you can hire a professional who can step in and take tasks they’re more experience with off your hands right away (like bookkeeping!). That will give you even bigger blocks to create and for most of us, we should be creating far more than we are consuming!

consume more than you create.jpg — Create more than you consume.

Pay Attention To How the Money Flows

When you’re looking at your metrics, you want to know where your money is coming from (revenue) but you also absolutely must know where your money is going (expenses).

If you are paying a lot of money for a piece of software, a service or a freelancer every month, can you calculate a Return on Investment for it? Is it worth what you pay for it every year? Can you downgrade to a less expensive tier? Or would upgrading to a tier with more services actually be a better investment for you. (for some things, the ROI may simply be keeping the government happy and that’s ok.)

Learn More About Your Audience and Customer Base

Tools like Google analytics can be invaluable when it comes to traffic stats. But did you know you can also learn loads of demographic information from the service as well? They can tell you everything from where your audience is located to what their web surfing interests are to whether they’re accessing your shop from their phone or their desktop!

I had one web design client who planned her book tour based on google analytics data. The cities that were responsible for the most traffic to her website were where she went for her book signings. You could use that info to plan your craft market strategy or your shipping strategy.

Google analytics also allows you to set up and track goals based on how people interact with your site - like did that person who landed on your site make a purchase?

Your Business is Bigger Than You

It’s really important for us creatives to remember that it’s perfectly ok to put our businesses first - especially if it puts the food on the table and the roof over your head.

In fact, if you’re not putting your business first, you probably don’t have a business. You have a hobby. And having a hobby is perfectly ok - we need hobbies for our mental health. But you can’t rely on a hobby to sustain you financially.

To make it easier for yourself, separate yourself from your business. Your business is a separate entity. You don’t need to be profitable - your business needs to be profitable. You don’t have to have revenue, your business needs revenue.

But as the owner of your business, you need to pay attention to the health indicators for your business. You want green lights on your business dashboard, not red lights. You need to investigate when the lights turn yellow… do you invest more time to get them back to green? Or you do you look at your metrics and decide that they’re showing you it’s time to ditch that piece of the business and move on to something new?