The one question which stops most people in their tracks: “What are you tracking?”
It usually ends with “hmm, revenue” or “revenue and expenses”.
While revenue and expenses are key metrics, they’re the tip of the iceberg — everything that affects these numbers (your profit & loss) are just as critical.
First, tracking is made up of 3 separate, but related things:
- Monitoring specific key metrics
- Knowing where your leads are coming from — which of your marketing efforts are working
- Knowing what your leads and customers are doing — are your leads opting-in, taking the next step, moving along your Escalator? Are your customers and clients staying, investing more, hiring someone else for something you offer?
The most important reason to take the time/energy to track is not only so that you know what’s working, but what’s not. And going deeper, what’s your market’s reaction to what you’re doing. Essentially, tracking gives you the information to make decisions — objectively, not based on intuition or feelings.
Without proper tracking, your business can’t improve.
How tracking works:
- Decide what you want to happen from what you’re doing.
- Create tracking mechanisms.
- Continuously tweak based on the data.
For example: Tracking Traffic
- How many people visited your website?
- How long did they stay?
- What did they look at?
- What did they do? Opt-in? Comment on your blog? Use your “Contact Us” form?
- Did they purchase something? What was it?
- Which page did they leave your site from (aka “Where did they bounce?)?
- What page did they spend the most amount of time on?
If you track the above and apply your ratios (yep, another thing to track), you’ll be able to accurately predict things in your business:
- Advertising to website visitor
- Email/Contact to visitor
- Visitor to opt-in
- Opt-in to purchase or inquiry
- Email/Contact to paying client
- Average Client Lifetime Value
The easiest ways to track your marketing and lead generation effors is:
- ad tracking URLs (bit.ly is a simple one, KickstartCartSolution.com also has one built in),
- retargeting pixels or
- “marketing” URLs (e.g., www.VisionBoardToReality.com).
Some simple formulas:
Cost Per Lead:
- Total amount spent on specific lead source (be sure to include virtual assistant time if applicable)
- Number of leads
Divide Amount Spent by Number of Leads for Cost Per Lead
Cost Per Client:
- Total amount spent on lead source
- Number of clients
Divide Amount Spent by Number of Clients for Cost Per Client
Want more step-by-step formulas and MS Excel templates to make it even easier? Check out Know the Numbers of Your Business.
Once you have numbers you’re comfortable with, determine how to ratchet it up. Can you add more time, energy or money to the most effective lead source?
- More affiliates or joint venture partners (J/Vs are usually a stronger relationship than affiliates)?
- Invest more in paid advertising (Facebook, LinkedIn, Twitter, PPC, Ad Words, industry-specific)?
- Do some/another direct mail, email campaign, etc.
- Attend/Speak at another conference/industry event
We often spend so much time coming up with new activities, tools, etc. that we fail to stop and see which are currently working that we can expand and which aren’t carrying their weight.
With all the tracking, it’s important to avoid a trap many fall into: Keeping the best performing activities and eliminating the others.
Ideally you want to keep as many of the profitable items as possible — as long as something is making money, as long as it’s a positive contributor to your business, keep it. Or keep as many as you can afford to keep.
It’s not about paying as little as possible for a lead/client, it’s about paying as much as you can afford for a qualified lead/client and incorporating Extreme Client Care™ processes and systems to ensure that client not only stays with you, but refers others.
The more you can automate the back end of your business, your “Escalator” (get your complimentary How to Create a Funnel that Nurtures Your Clients and Your Bank Account here), so that 100% of your follow-up is completed 100% of the time, the more you’ll be able to invest in each lead/client.
Anything that isn’t profitable goes — and then determine what you have the bandwidth (time, energy, money) to add and take immediate action.
As an aside, I’ve recently turned away two potential clients for one simple reason: All they did was make excuses.
Excuses about why they weren’t where they wanted to be.
Stuff happens, not all of it is good. What matters most is how we react to it:
- Sit and complain that things aren’t going as planned
- Take a step back, or away, to re-evaluate and choose an amended or new course of action.
Last November I had unexpected spinal surgery. It put me down for most of the month and was horrible.
December was in the Top 3 Revenue-Generating months of 2015.
It’s the difference between being committed to your goals or enjoying the convenience of things going well.
Look at your goals, business and personal, and, for each goal, ask yourself:
“Are you committed or is it convenient?”
Then act accordingly based on what’s going on for you.
As always, take what resonates and leave the rest.