What metrics matter to your business?

What metrics matter to your business? By now, anyone who's interested in music of any kind is familiar with Pandora radio and its power to play only the music you love. In fact, I'm sure that many of you who listen, haven't given a thumbs down in years. But what else drives their success? Below, you'll find the steps that of Pandora's marketing director, Matt Nichols, gives for retaining customers and attracting new ones:

Know your business! What metrics matter to your business? If you don't know, figure it out. If you're not good with numbers, find someone who is. For Pandora, playlist optimization matters most (and they've spent countless hours refining that algorithm) but email marketing is a close second. Matt says that personalized emails have proven to be more effective for the company than generic HTML messages. In fact, he says that "(Pandora's) emails squarely focused on a listener's stations get 10x the response of a generic email."

Matt asserts that "it's better to under-email than over-email." Old-school marketers in the room fainted.Matt talks monetization. In 2009, Pandora was suffering from royalty fights and a down economy while enjoying a loyal fan-base and attracting new listeners daily. But how could they monetize their heaviest listeners that were unattractive to advertisers who didn't want to hit the same people over and over? Enter Pandora Premium: 36/year for unlimited listening, no ads and high bit-rate audio. Or, users could continue to listen for free up to 40 hours per week.