Startup Marketing Lessons Learned: Know your KPIs

Editors Note: This is a guest post from Danny Wong, co-founder and Marketing Manager of Blank Label, a custom dress shirts startup that has built a lot of traffic through Search Engine Optimization and Media Relations. We’re delighted to have him share his thoughts and experience on marketing startups here.

Traffic, traffic, traffic. That’s the name of the game isn’t it? Wrong.

Many businesses thrive on great traffic. Websites and blogs that rely on ad-revenue need lots of traffic. Newspapers and media outlets love traffic, but that’s not the end-all of their business. Pageviews is their Key Performance Indicator (KPI). What’s 1,000,000 unique visitors in traffic with an average of 1 pageview per unique? 1,000,000 impressions.

Sounds like a lot right? It is.

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But when the KPI is pageviews, wouldn’t you rather have 500,000 unique visitors with an average of 3 pageviews each? That means you have 1,500,000 impressions. 50% more impressions! Which hopefully translates to 50% more ad-revenue.

My company  is an ecommerce site and loves lots of web traffic but our KPI isn’t unique visitors or pageviews though. At the end of the day, what is keeping us alive is sales, so we have to capitalize on the traffic we receive and convert as many visitors as we can into customers. So let’s say we have a 3% conversion rate and get 20,000 unique visitors in one month. That’s 600 customers we’ve acquired. Now what’s going to be harder, doubling traffic or doubling your conversion rate?

The smallest things can increase your conversion rate dramatically, but it takes a bit of work (even with a budget) to increase traffic by 20,000 unique visitors. By increasing your conversion rate, you can effectively double your sales without having to double your traffic.

Here are some steps for any startup to increase their conversion rate (whether their goal be sales, users, emails, sign-ups, etc.):

1. First, before you act, you have to review the leaks in your conversion funnel (whatever your end goal is). What are the friction points? Where are people leaving your site?
2. Consider ways to plug up the leaks. What can I do to change XYZ so that I retain more visitors and get them to reach our goals?
3. Execute! Make some changes and see what happens.
4. Evaluate! See how effective you were in plugging up the leaks and increasing your overall conversion rate.
5. Try, try again. If you were not satisfied with your results, go ahead and test other ways to plug up the leaks.

As a startup, you have to consider what’s really important to your business, what’s keeping you alive, and what your real goals are. For many startups, traffic isn’t a goal. It’s a means to an end. That end can be users (such is the case for FourSquare and Twitter), pageviews (media outlets that run on ad-revenue like The Next Web), or customers (which is the case for ecommerce companies like ours).