To increase results without working harder, an entrepreneur needs to know how well their current efforts are performing. As Peter Drucker wisely said, “if you can‘t measure it you can’t improve it.” In my experience, you can’t increase profits if you don’t know what works (and what doesn’t.)
Yet most of the entrepreneurs I know are in the dark about the most important numbers in their business. Most of the time, the focus is on “just generate more leads.” With a million to-do’s on their plate, taking the time to track and review their performance seems to fall by the way side. But if you are spending a lot of time and money generating leads that don’t amount to sales, then your efforts are in vain. The illusion is that you have lots of leads but the reality is they aren’t going to lead you to more sales.
That’s why every entrepreneur must measure what’s working so they know what’s doesn’t. Testing and tracking is a much bigger conversation than I can cover in one post. And if I went into all the details your mind might start spinning like the Tasmanian devil.
There are 4 #business success factors that give you massive insight into how well its performing. Click To TweetSo let’s keep it simple and start with 4 really critical factors:
Your Open Rate
Your open rate is how many people open the emails you send out. By tracking how many people open the emails you send out, and more important click through to your call to action, you’ll have vital information about the health of your list! I think most modern businesses today send out emails for marketing in some form but if you don’t, you can apply this factor to other types of advertising methods.
Too many small business owners have false comfort in having a big list. A big list that isn’t responsive isn’t a valuable list. Start tracking your open rates so you know what kind of relationship you really do have with your readers.
Opt In Rate
Your Opt In Rate is how many people come to your site, landing page or squeeze page and “opt in” for the next step with you. The Opt In Rate is a way of measuring how well your messaging lands with people who find your pages. Knowing this number, especially during an active campaign or promotion, will give you clarity on whether or not your message and offer is compelling people to want more from you.
If you don’t have online “opt in” opportunities you can apply this concept to any situation where you have an audience of leads that you want to capture contact information for. Think about situations when you speak, network and promote to new communities – how can you track your success in gaining interest?
Sales Conversion
One of the most important numbers to know is your sales conversion. This number tells you how many people raised their hand, saw your offer, and decided to buy. Whether it’s a private consultation call, an offer made from a stage or a webinar enrollment, the number of people who buy tells you a lot about how well your sales process is working. Sales conversion is a key indicator of profit potential.
If your conversion is on the low side, you have a HUGE opportunity to quickly increase profits by improving your sales process. This improvement may be lead you back to the previous two factors as often low sales conversion reflects a mis-alignment of prospects to your offer.
Retention
Retention is the number of people who keep your program or continue to pay for on-going use of your offering. Retention says a lot about how the value of your offer matches the needs of your clients. If your retention is low, the value your customer base experiences is probably off track. If retention is high, you are doing a great job of delivering!
Retention is an important factor to consider. Retaining a client who has already purchased and may purchase again is significantly LESS expensive than the investment requires to gain the trust of a new prospect. Your revenues can be increased dramatically by simply focusing on improving retention and repeat sales.
These four numbers are critical to making better decisions for time, money and resources. Whether you track them yourself or you ask a team member to track and review data with you, make measuring these four factors a priority in your small business operations.
Once you know your profit factors, you’ll be able to prioritize and focus your marketing dollars more effectively. Then you can boost the rest of your business and increase profits.
