Entrepreneurship 101: Why Businesses Fail: Bad Metrics

What do you track in your business? Sales? Traffic? Or the real impact of your marketing strategy? Because that’s measuring what matters.

In this excerpt from “Sales Strategies That Work: How to Thrive Rather than Simply Survive”, I’ll explain what you need to measure to ensure the growth of your business.metricsYou can calculate your costs versus your profits, your marketing expenditures versus your sales, and your overhead costs versus your revenues. But profit and loss aren’t so clear cut: you must measure the strength of your brand and customer relationships.

You need to know who your best customers are since 20% of your customers account for 80% of your sales. Some customers buy from you just a few times or only purchase your low-cost products. These numbers can skew your perception of sales and the impact of your marketing strategy. In the same vein, loyal customers that buy only low or mid-cost products may end up spending much more over the course of their relationship with you than those that buy a number of your high-end offerings!

And another value point: whether or not your customer generates referrals and new leads and whether these leads actually convert to buying customers.

It’s vital that you do employ metrics because you need to get some sense of what activities give you a great return and which do not. Metrics can also help you to improve your offerings, learn more about your most valuable customers, and gain insights into potentially new markets.

What you measure depends on your marketing goals. Do you need to establish brand presence on social networks? Do you want to know how many repeat customers you have? Do you need to increase customer engagement with your business brand? Do you want to know which customers share your content on other social networks?

In general, brand marketing goals consist of:

  • Brand Awareness
  • Brand Engagement
  • Conversion
  • Retention
  • Advocacy
  • Growth and Expansion

While all of these are important to attend to over time, the phase that your business is in determines which you should pay most attention to now. If you’re revamping your offering; you want to build awareness. If you need to improve sales immediately; you’ll want to measure engagement and conversion. If you’ve been in business for awhile; you may want to focus on customer retention and advocacy.

Brand Awareness

Website traffic and video views are only part of the picture. Is the number of visitors to your website increasing? How many of these are new visitors? How many of these are repeat visitors? Are you tracking mentions of your business?

Brand Engagement

Just because someone shares your post doesn’t mean that they buy your product! Just because someone downloads a free ebook doesn’t mean that they share you with others. And even fans of your brand may never interact with you on your website or other social networks.

Traffic, shares, likes, and opt-ins aren’t enough to measure engagement. How long do people stay on your site? What links do they follow? Do they comment? Do they link to your content?

Conversion

Conversion rates can be a little trickier to track unless you purchase a social media dashboard like Infusionsoft but in general; it’s good to measure active members versus viewers, leads or new visitors that make a purchase, customers whose shares or posts generate new leads, etc.

Use Google Analytics to qualify your visitors and purchasers. Track those that visit product pages, those that have stayed on your site for more than 30 seconds or those that engage in specific activities.

Retention

Track returning visitors to determine what keeps people coming back and what turns them off. Determine what you can do to educate and inform them, increase loyalty and lengthen the lifecycle of the relationship.

Advocacy

People that actively engage with your brand, contributing content and comments, writing reviews, posting photos or videos on other websites or social networks are influencers worth paying attention to. They end up generating many more leads and potential customers for you so you want to cultivate relationships with them.

Growth and Expansion

Metrics can give you great insights into how to expand your business offering and increase your sales. Learn what customers want and don’t want, what content of yours they like or don’t like. Find out what their interests are, what other products they buy and if they’ve found you through outbound links.

By Oksana Tashakova, Founder of Wealth Dynamics Unlimited

The writer is a Personal Branding Expert, Wealth Creation Strategist and Professional Coach.

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