Mequoda Method Habit #7: How to Implement a Metrics-Driven Business Plan

ARTICLE SNIPPET - Understand how to implement a metrics-driven plan for your Internet business model that will help determine direct profit and loss. Understand the key drivers behind user-driven sites and the most important profit-impacting variables that affect your website's bottom line.

Key metrics are numbers that, when multiplied together, determine costs or revenues generated and their respective effect on profit and loss. For websites, some metrics are more important than others, depending on the site's business model. Knowing which key metrics to use can be confusing. Many site owners find themselves paying attention to the wrong ones.

First, it's important to decide whether your site implements a sponsor-driven or user-driven business model. For purposes of this article, we are focusing on metrics that are key to user-driven sites. Those sites are run by that hearty group of traditional, circulation-driven magazine, book, and newsletter marketers who have decided to sell information products online. "User-driven site" describes only three of the Mequoda models: the editorial hub, the membership site and certain retail sites. The key driver of a user-driven site is not traffic—not the number of site visitors, nor the number of impressions, nor even the number of paid members—the key driver is the free eLetter.

The Mequoda Strategy Model is a dynamic modeling tool that will help information marketers understand the effects of the key driver, the key variables and the key metrics that affect a particular business. Included are links to two downloadable examples of the Mequoda Strategy Model: the Mequoda Advisory Network case study and the Mequoda Strategy Model blank grid. The Mequoda Strategy Model effectively summarizes the results the targeted business experiences in a given period, and it may be implemented to serve different purposes: a reporting tool, a modeling tool or a planning tool.

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