Which Critical Drivers Will Create the RIGHT KIND of Results for Your Business This Year?
Whether you want to grow your business larger or keep it the size it is now, your goal should always be to generate more profit from the revenue you bring in—and to find other low-cost, minimal-effort income streams that can bring in additional profits for you. In every business, there is a checklist of goals and targets that—when reached, surpassed and improved upon—continually drives revenue into the business and drives up profits. We call these targets “critical drivers.” To an insurance agent, critical drivers might be “number of cross-sells per customer” or “revenue per agent” or “amount required to trigger bonuses and overrides.” For retailers, a critical driver may be “revenue per square foot.” But from a marketing standpoint, the critical drivers of any business are things like number of new leads, response rate, number of unique website visitors, cart conversions, open rate, and more. In this issue of the Revenue Report newsletter, I want to inspire you to identify, track, measure and meet the critical marketing drivers of your business.
The First Question to Ask: Are You Minding Your Metrics?
In every small business, there are “key profitability indicators”—information you need to know in order to decide if a particular income-generation activity is profitable and therefore worth continuing, expanding, or canceling altogether. You can only get this information via regular reports produced from systems and procedures that you set up to give you that information. With this sort of system, you can tell immediately whether a certain marketing campaign worked, whether your sales scripts are working, if it’s better to bundle a product package together using three items or six items, whether your emails are being opened and acted upon, and so on. (An example of a helpful system that gives you data is Google Analytics, linked to your website so it will automatically deliver data to you. An example of a procedure are weekly reports from the Sales Department detailing number of leads generated, contacted and converted.) Critical drivers are those numbers that give you an instant snapshot of whether your income generation efforts are working — or need to be improved. When you manage your business against these critical drivers, your sole focus becomes tracking them, improving upon them, and motivating your staff to surpass them.
Five Easy Measurements That Provide Information on Critical Drivers
While it does take some work to set-up measuring methods, the pay-off is enormous in terms of information you’ll gather which can help you shape your future marketing campaigns — and manage your staff to meet and surpass critical drivers. Here are the five most important measurements you’ll need to track:
1. Monitoring Leads, New Customers and Sales by Product or Product Bundle—Even if you monitor no other numbers in your business, you must at least track the number of leads you bring in, the number of new customers you produce and the number of sales you get paid for—week by week.
2. Gathering Key Information from Your Website—Google Analytics, a free service, can help you easily gather important data in just minutes, including: web traffic, opt-ins at your home page, cart conversions (sales through your shopping cart), and cart abandons (visitors who begin a purchase but do not complete it).
3. Calculating Response Rates and Conversion Rates by Marketing Campaign—In order to calculate response rates for each individual marketing campaign you run—a display advertisement, a teleseminar, or an insert in someone else’s shipping carton, for instance—you’ll need to know which promotional campaign each response comes from. It’s easy to add a tracking code on the coupon, use a unique toll-free (800) number for each campaign (that’s captured by your phone staff), or have your inbound salespeople or in-store clerks simply ask the prospect how they heard about you. (These are strategies for offline prospecting campaigns. All response tracking at your website is done by your shopping cart software.) Once you know where leads are coming from, you can begin to calculate the response rate, return on expenditure and other critical information.
4. Measuring the Results of Your Email Marketing—Once you are capturing email addresses from visitors to your website, you’ll want to promote future products and services to those names via email. To become a master email marketer, start tracking the numbers related to your list along with the rate at which your opt-ins open and act upon their emails. Regularly measure your list size, open rate of emails sent, click rate (which means clicking a link in your email to view an offer at a webpage), and bounce rate (emails returned to you due to bad addresses).
5. Tracking Your Telemarketing Results—If you sell expensive products or services and use salespeople to follow-up with leads generated from your prospecting campaigns, you likely know already that monitoring these salespeople is the key to increasing sales. Continually measure: (1) Leads available to call, (2) leads reached, (3) leads sold into a primary product offer, (4) leads down sold into a less expensive package, and (5) leads not closed into any purchase.
Start Measuring Just One Critical Driver
Choose at least one of the key indicators above and set-up a method for measuring it—whether that method is paper reports your salespeople complete OR Google Analytics tied to your website OR another choice of the five measurements above. Of course, “Managing Against Critical Drivers” is just one of the business-building topics that I’ve included in my Income:Series of planned-for-you monthly marketing campaigns. Others in the series include finding new customers, setting up your Internet Selling System (instead of just a brochure website), social media marketing, email campaigns, quarterly planning… plus so much more. These are the exact sequence of campaigns that I would execute for you if your company were a high-end client of mine. Click here to get started with “Finding New Customers”—your first month—at the introductory price of just $3.95. Until next week, Janet Switzer P.S. If you need more than just a monthly campaign…if you literally want to transform your small business into a well-managed cash-flow machine…I’ve recently developed a packaged course that will help you easily execute pre-scheduled marketing campaigns, run advertising that makes the phone ring, implement sales strategies that convert prospective customers to cash-paying buyers and more. This step-by-step training course helps you put in place those systems that reliably generate cash-flow. You can even “hand off” the work of establishing these systems to your staff or virtual assistant since the course includes complete tutorials, sample promotional pieces, a deal-making grid for your staff, easy-to-follow worksheets to help you plan, even hiring scripts for bringing different professionals into your business who can be responsible for bringing in the cash. For full details and to immediately get your copy of this ground-breaking course, click here.