As we continue with the current Etsy Success Series, in which I’m answering questions sent in by readers of the Etsypreneur Daily Tips email, I often find myself smiling as I write.
I smile because the questions asked are so often simple and complex at the same time. They beg for short, one-line answers, followed by a “no, seriously” then a 100 page report offering an “extended” answer to the same question.
Such was the case with yesterday’s post “How to Boost Sales on Etsy” and such is the case with today’s question:
How do I quantifiably measure success selling on Etsy?
The Long and Short of It
A one character answer. I’ve set a new record for brevity in written communication! The only way a shorter answer is possible is within a marriage, using unspoken communication such as a raised eyebrow or a sharp, laser-focus, squinty eye look that says: don’t mess with me right now.
The long answer:
Actually, money isn’t the only way to measure success. This is especially true if you have your Etsy shop in-part as a fun activity to do on the side.
However, if you’re building a business then it’s good to remember that the actual goal of a business is, indeed, profit. On some level.
So, for businesses, there is some truth to the one-character answer above. Watch the bottom-line and if you’re making money, great. If not, why not? When will you?
But most online businesses don’t make immediate profits. What about before you start to make money?
Pre-Profit Measures of Success
Once you start seeing a steady flow of income from your efforts, whether that income is $300 per month or $3000, you’ll naturally start to measure your success mostly using that metric. You’ll simply add-up your sales from various sources and see how you’re doing month-over-month.
But before that steady income starts to flow, and probably for the first few months after the cash hits, you might use other methods of measuring success.
It’s similar to measuring the success of a building still under construction. It may not be serving it’s intended purpose yet, but that’s because it’s a work-in-process. While “under construction” there are a number of ways to measure success.
Measures of Community
I’ve listed “measures of community” first. That’s because as I look at the landscape of what’s happening online, I’m increasingly convinced that the only reliable way people are going to have of sorting the massive numbers of choices online is going to be through their communities.
I think there’s going to come a time when you’ll have to make a conscious effort to find something your “friends” don’t like. That’s because technology is going to continually put those things our friends do like or “have liked” in front of us, whether we ask for that or not.
Whether or not that’s a good thing is a different subject, but what it means for your business is that you have something tangible and long-term to gain from building up your community connections.
Facebook, Google+, Twitter, Pinterest, and even social connections within Etsy itself all are worth your efforts and while they may not seem to offer the kind of results you might expect early on, there is much to be gained for the patient and persistent.
So the first non-financial measure of success I would track is the number of legitimate followers you have in social circles. (non-legit would be doing things like paying some service to “add 3000 Facebook Likes in one day!”)
Measures of Traffic and Conversion
Yesterday’s post talked about the two elements of selling online. Traffic and conversions. Clearly those are metrics you can track from day one.
Etsy provides pretty good stats tracking automatically and at no charge. You can use it to see where your shop traffic comes from, both from inside and outside of Etsy. You can also see what keywords are being used to find your items and which items are getting the most views.
Using the Etsy Shop Stats, you can also see the total dollar value of your orders for a given time period. You can divide that number by your number of views to get a “$ per view” number which is a helpful measure of conversion.
In addition to Etsy Shop Stats, you can set-up your shop to be tracked in Google Analytics which provides even more in-depth information. Here’s a link to simple instructions for setting up Google Analytics with Etsy.
There is A LOT to really understanding and using stats, but the basic measures of success are: How much traffic am I getting? From where? What percentage of those visits turn into sales? How large are the sales?
Measures of Performance and Connection
While the first type of metric listed above is “measure of community” in terms of size, and the second is a “measure of traffic and conversion” in terms of straight numbers, the third is a less directly quantitative measure.
This is a measure of people and relationships. A measure of your relationship with the people that are represented by the number of Facebook fans you have and the number of views your shop is getting.
This one is hard to measure, and sometimes emotionally challenging. But it’s an important part of long-term success online so we might as well talk about it.
Types of Performance and Connection Measures:
- Blog comments
- Pins, Shares, Likes, Plus Ones
- Email responses
- Personal notes and “out of their way” expressions of appreciation
- Spam complaints
For me, this part of tracking performance is the hardest. For Kim, not so much. She feels much more comfortable in this arena. This is real people talking and she prefers that to an endless string of stats.
Interestingly, I think the information and “business intelligence” she’s learned just from talking has helped propel our success online more than anything else. She listens and pays attention to what people are doing.
She was on Pinterest before it was cool and now has a respectable following there of about 15,000 people or so. That has been huge for EverythingEtsy.com and it’s because she paid attention to people, not stats.
All the stats tracking in the world wouldn’t tell her what people are going to do next! Stats is a measure of what already happened. By listening to people you can get a measure of what’s going to happen.
Overall, the combination of these things can help any online business quantifiably measure success during the time between start-up and realizing a profit, which can be awhile sometimes.
What about you? How do you measure success?