New Year’s is the quintessential time for small businesses to make (and keep) resolutions for growth. But achieving your company’s 2014 goals hinges on knowing some important numbers, and many businesses never go beyond their income to identify and track essential metrics. Here are the 14 most important performance measures to track this year.
FIRST UP: MARKETING METRICS
No. 1: Web traffic. How do you know if a lack of sales or inquiries is due to low traffic or low engagement? First up, track how many hits you get on a weekly and monthly basis with Google Analytics. Tracking weekly can help you identify spikes in traffic and pinpoint the cause so you can focus on what works.
No. 2: Page rank. You’re likely spending significant time and money improving your website, adding content and sending web traffic to your page. But do you know how well your page is ranking compared to all the other websites in the world? Alexa.com allows you to find out how popular your site is month to month (hint: Google and Facebook usually rank first and second.).
No. 3: Revenue per ad. Have you ever spent money on a banner ad, Facebook promoted post or radio spot and then realized you have no idea whether it makes financial sense to do it again? It’s a little more tricky to track hits, but you can do so by creating unique links for each ad with bit.ly or by setting up custom web pages for each type of ad. To find out if those leads and traffic turn into income, you’ll need to be tracking some financial metrics, too…
NEXT: MONEY METRICS
No. 4: Sales per product or program. Pop quiz! What was your most popular program or item in 2013? Whether you’re selling burritos, landscaping services or degree programs, it’s essential to know which offers are the most popular and lucrative.
No. 5: Sales period. If you’re on top of your financials, you’re probably already tracking your sales and revenue each month and quarter. But how are those numbers stacking up compared to last year? Last month? Use accounting fields to track growth from one period to the next, and you’ll never wonder whether you’re trending up, down or staying level.
No. 6: Income per ticket. Do you know how much the average order is for your business? By tracking your income per ticket, you can look for opportunities to raise the amount. So, even if you have the exact same number of transactions in 2014, you could make 10 to 25 percent more just by increasing the value per order. Selling an added accessory, appetizer or service to an existing customer is often easier than getting a new client.
No. 7: Lifetime value per client. When you know how much the average client spends with you over their lifetime, you can make informed decisions about advertising costs, upsell offers and more. Imagine the average client is spending $10,000 in a year with your business. Is it worthwhile to send them a $25 gift card for the holidays? Yes! With this data in hand, you’ll notice if clients aren’t returning. Then, you can reach out with new offers and incentives.
ARE YOU TRACKING ENGAGEMENT METRICS?
No. 8: Social media engagement. Most businesses look at their number of followers (1,000 people on Twitter!), but few are tracking actual engagement. How many times are your posts read, commented on and shared? And how many replies are you getting? Followers who don’t engage aren’t helping you grow your brand. Hootsuite has easy-to-afford packages for social sharing and reporting.
No. 9: Conversions. Track through the entire customer lifecycle by measuring how many website visitors (No. 1) become subscribers (No. 10.) and again how many subscribers become clients (No. 4). Once you understand these numbers, you can start improving your percentages. You might discover that you get great traffic to your offer pages but not enough buyers. In this case, focusing on improving the offer page can bring you more business without increasing your advertising budget.
WHICH REMINDS ME, YOU DO HAVE A NEWSLETTER LIST, RIGHT?
No. 10: Newsletter subscribers. It doesn’t matter if you run a yoga studio, art gallery or tax service. Getting leads to “opt in” for updates turns casual website browsers into hot leads. It puts the communication ball in your court. And, instead of hoping someone sees your new blog post, you can send it to them directly. If you’ve never launched an e-newsletter before, services like Aweber and MailChimp make it affordable to get started.
FINALLY, CLIENT STATS:
No. 11: Inquiries. How many people are asking about your services or coming into your store on a monthly basis? These are all potential clients, and if you want to increase sales in 2014, you need to know how many leads are coming in the door. It’s easy enough to track emails, phone inquiries and walk-ins on a chalkboard.
No. 12: New clients. How many of those inquiries turn into new clients? While you’re tracking the lifetime value of a returning client, you also need to find out how many new clients come in each month. If you’re going for extra credit, ask how the new clients found you, and track that too.
No. 13: Renewal rate. If you know your conversion rate (No. 9), such as how many people who walk into your store or call for a quote purchase, then it’s easy to track how many are coming back or renewing their services. Yes, you want to increase the lifetime value per client (No. 7), but more so, you need to understand which customers come back and why. Most businesses ignore the client after that initial sale, and this is an area prime for improvement in the new year.
No. 14: Order type. How do your clients prefer to order and pay? If you’re selling online, you need to know if your website sales portal is efficient and whether clients are primarily paying via check, PayPal, credit card, barter, cash or trade.
Each of these metrics will give your business another piece of the puzzle to success. And once you’re tracking them consistently, you will have a holistic view of where you can improve to reach more people, make more sales and serve more clients long term.
Without this information, it’s easy to toil away without knowing what really works for your business. It’s frustrating at best and a waste of time and money. As you’re setting those important 2014 goals, take the time to set up proper tracking for each of these essential metrics.
SYSTEMS EXPERT ACTION TIP:
Take 2 minutes to schedule time on your calendar to begin gathering these numbers and 30 minutes each week to update and review with your team.
Three is a magic number. Yes it is. It’s a magic number.
If you’re humming the lyrics to the iconic “Schoolhouse Rock” song, then you are either over 35, a Blind Melon-head or already in tune with the Strategy of 3.
It may seem that landing that New York Times interview, getting featured on the front page of AOL or winning a $135,000 business contest means that, as a business owner, you are set for life. In truth, it’s just the beginning.