Most of the time, creatives like us shy away from numbers. But numbers are important when it comes to our art business.
We need to become familiar with our marketing insights, so we can create the best artist business plan.
Hold on to your seats because today because you will learn the numbers that truly matter in your art business.
The Vanity Metrics: Marketing Insights that Can Sabotage You
Social media can drive a lot of business and a lot of sales. But if we are not careful enough, it can also simply become a popularity contest.
There are numbers that do not really impact your business’ profitability. These are vanity metrics or the “feel-good” metrics.
What are these numbers?
These are numbers that you’re tracking for recognition. When you’re tracking these numbers, you’re more concerned about your popularity than gaining profit for your business.
A lot of times, these vanity metrics seem important for the business but it’s not the most important numbers that you should look at and track.
What are some examples of these vanity metrics?
- Video views
Although these numbers can be important, they should not be your main focus. These numbers can be signs that people are paying attention to your product and to your message. But at the end of the day, “Likes” are not going to pay your bills. Right?
Effects of Focusing on the Wrong Numbers in Your Art Business
One thing that you must understand is that these “followers” are not always your true followers. You can have a big account with a lot of followers but most of your followers will not truly engage with your business. And if you are not careful, these numbers can sabotage you.
Here are some ways these numbers can sabotage your art business:
- Gets you in the comparison trap.
- Gets you more focused on popularity vs. profitability
- You can feel like you’re working harder and harder but not really getting anywhere. So, you end up feeling tired and overworked.
You must remember, if you really want to create a business from your art, I want to encourage you not just to focus on being popular but to focus on being profitable.
The Numbers that Truly Matter in Your Art Business
What then are the numbers that truly matter in your business? These should be numbers that provide true business growth. And it’s focused more on profitability.
Here are some examples of the numbers that you should track when evaluating your art business and it’s profitability.
As I’ve mentioned on my previous blog, How to Make Money from Art (and not rely on Etsy sales alone), to measure your profitability, you have to use this formula: revenue – costs = profit.
Basically, you have to calculate all your costs in running the business, things like materials, shipping costs, among others.
This spreadsheet will automatically calculate your profit for you. All you have to do is enter the amount for the specific item and it will show you the total cost, the revenue, and the net profit.
Another good thing about this spreadsheet is that if you are having a sale, it would also calculate the amount based on your discount percentage. This will allow you to see if you are still making a profit even though you’re running a sale.
The 80/20 Rule
Now, to grow your profit, I always recommend the 80/20 rule. It’s a basic business concept and what it means is that 20 percent of your efforts, products, or your customers should produce 80 percent of your results (and profit).
You have to determine your highest profit margin products or your bestselling products and then focus your marketing efforts on them. This will give you more profit along the way.
2. Repeat Customers
Check out how many customers purchased from you more than once whether with the same product or another product. If you’re not getting repeat customers, you may want to look deeper into how you can improve your products or customers service.
3. Referrals from customers
The highest compliment you can get is when a customer recommends you to another customer. WooHoo!
This means they not only love your product, but they also trust you enough to recommend you to people they know.
4. Engagements on social media
I’m not saying that you should not look at your social media numbers anymore. However, instead of focusing on likes, followers or subscribers, focus more on true engagements like comments, direct messages and people who are responding to your stories on Instagram.
This is different because they are truly engaging with you and your brand, which means that these are the people who are really interested in your products.
With email subscribers, instead of looking at your overall subscriber list, look at your open rates and your clickthrough rates.
5. Churn rate for memberships
This is the percentage of people who are canceling versus the percentage of people who are joining. This applies to those of you who have membership websites as I do in my Author Audience Academy website.
6. Number of people who finish your class or course
This applies to those of you who offer classes or courses in Skillshare or other sites. Look at the number of students who finish your class and which of your classes has a higher completion rate.
Grow Your Art Business with these Numbers
Look at these numbers that matter and watch your business growth over time. It is really helpful to keep those numbers in front of you as you’re growing your business as they can serve as a guide.
Tracking these numbers that really matter helps you stay in a good mindset as you plan on how to move forward and increase your income as an artist.
I hope that you enjoyed this blog post. You can share your thoughts and comments below. I want to hear from you!
Learn How to Make Your Art Business More Profitable
Get more ideas on how to get more profit while doing what you love. Learn the 10 ways you can increase your income as an artist here: www.yourcreativeadventure.com/paidforpassion
Earn an income while doing what you love…your art! Join me for this free webinar on 10 ways that you can increase your income as an artist. Click on this link to claim your spot now: http://yourcreativeadventure.com/paidforpassion/
You can make money doing what you love. Is it easy? Not at all. Is it possible? Absolutely, yes!
Find out how I did it in my free training here.