Early on I learned the importance of monitoring the success of my marketing efforts. Here’s why it’s a good idea:
- To determine what’s working and what’s not — otherwise, you’ll be spending time and money on ineffective methods.
- To see when trends are up, so you can increase those strategies, and conversely see when trends are down, so that you can adjust.
- To know which of your products and programs generate the most revenue for you so that you can focus our energy on those.
- To discover where your customers are coming from so you can be responsive to their ever-changing needs
There’s almost an infinite amount of analysis that you can do with the activity surrounding your business, and you’ll dream up trends to watch as you go along. Here are some of the important metrics to know about:
- List size. How many contact names and email addresses do you have? What are the percentage increases in list size over time? Are they providing address and phone number information (an indication of trust level)? You may have all of your contacts in one place such as a shopping cart, or you might have them spread among other locations such as Facebook, Twitter, and your email distribution service. You’ll want to monitor all of these venues.
- Customer to List Ratio. Your list has prospects, people who have voluntarily signed up for your ezine or teleseminars, and it has customers who have actually paid for products, programs, or events. Existing customers are most likely to become future customers, but you continually want to convert prospects into customers as well. If you have 1,000 on your list, and 100 of them are customers, your customer to list ratio is 1 to 10 or 10%.
- Opt-in Percentage. When you hold a teleseminar or webinar, usually free, to attract new prospects, you’ll want to monitor how many people land on your web page to check it out, and of those, how many register. If you have 2,000 unique visitors to your opt-in page and 500 of them sign up for your teleseminar, then you have a 25% opt-in rate. You’ll compare opt-in rates for one seminar to another to determine which topics resonate with people. Give the people what they want!
- Sales Conversion Rate. After your complimentary teleseminar, you’ll probably direct people to a sales page for a product or event that you are mentioning during your call. You’ll measure how many unique visitors land on that sales page via your webpage data (check out Google Analytics for this) and then measure the sales. If you have 500 people check out your sales page, and then you made 50 sales in the subsequent week, you’ll know that you had a 10% sales conversion rate (50/500= 10%). Going forward you’ll actually be able to project your sales based on past calls enabling you to forecast cash flow.
- Return on Investment (ROI). An important percentage to track is your ROI, since that’s how you determine your most profitable ventures. The revenue side is easy to track based on the sales coming in for the program or product. The cost or expense side is more complex and includes not just the physical pieces to put a product together, but all the hours that you and your team work to get the product from the drawing board to the marketplace, and then on your customer’s doorstep. It’s a hassle for you and your team to track their hours by project, but the extra effort will provide valuable information.
- Average Customer Order. As you build your portfolio of products and programs for customers to choose from, you’ll have customers purchasing more than one product on an order. Track your revenue per order over time and you’ll see trends. This will help you with sales projections and with knowing that you have the proper sales mix for every level of customer.
- Sales History. Consider keeping track of each and every sales launch on one spreadsheet with dates and sales figures. Think how handy it will be years later when you need to remember when you released a product, how well it sold, what methods you used, and how successful they were.
Now you’re getting the picture of how tracking a few important numbers about your business over time will give you a quick pulse of how your business is doing. This enables you to adjust quickly and make informed decisions. We’ll save tracking links and website analytics for another day, but you’ll be amazed how much you can learn just by incorporating the above into your monthly financial review. Spend a little bit of time doing this as you go along and it will be so much easier than recreating this history after the fact. Have fun analyzing!
© 2010 Ali International, LLC
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