If you want more business with less effort and stress, there’s one process that absolutely must be in place.
Surprisingly, the vast majority of businesses don’t pay nearly enough attention to this. The result? They are working a lot harder than they have too and wasting a lot of money.
The fundamental truth that – once grasped – can change your business forever is this:
Absent any other changes, measurement improves performance
You need to be systemically tracking key metrics. It’s the only way to know what works and what does not, and it removes the guesswork from your marketing.
You can’t improve what you fail to measure.
What’s Most Important
You should have metrics throughout your business, but the most important place to focus your efforts is in marketing and sales.
Your pursuit of customers via marketing is how you build your business, so if you’re not tracking spending and return, you might as well start shredding hundred dollars bills and use them for packing material.
Everything stems from quality data.
If you have it, you can make more informed decisions in all aspects of your business and improvement can occur rapidly. If you don’t, you’re playing the game blindfolded.
Do these questions sound familiar?
- How much does it cost to acquire a new customer?
- How much is an average customer worth once acquired?
- What is your closing ratio?
- What percentage of customers initially find you through your website?
- How many phone calls per week does your website generate?
- How does this compare to phone calls generated last week?
- What percentage of customers refer others to your business?
- How do you stay in touch with past customers?
- How often do you contact past customers and what is the response rate?
- What’ the unsubscribe rate on your mailing list?
As a business owner, these questions should be very familiar. Knowing their answers separates average businesses from the top-performers that thrive regardless of the economic climate.
Data informs decision making. Nothing is left to chance.
Goals and KPIs
Set goals around the above questions. If you don’t know where to start, let the initial flow of data create a baseline, and work from there. Your goals then become your key performance indicators (KPIs).
KPIs should always be centered around business outcomes.
People tend to get carried away with KPIs and spend value resources on tracking Facebook likes, re-tweets, and other metrics that don’t have a direct effect on your business. Don’t just track for the sake of tracking. Always ask, “does this question contribute to a valuable business outcome?” Such outcomes include:
- increased efficiency
- higher employee morale
- increased customer loyalty through repeat business
- improved positioning in the marketplace
- greater revenue
- lower operating costs
- lower customer acquisition costs
Gathering data to address the questions above (and many more) directly contribute to a valuable business outcome. As a business owner or executive, you must know these metrics like the back of your hand and you should be checking on them daily.
Start tracking and start acting to really take your business to the next level.