When it comes to marketing your small business, how do you know how well you are doing?
One of the biggest challenges small business owners face when it comes to marketing is determining what’s working, what’s not, and what to do about it. Specifically, they want to know where to spend their limited time and resources in order to grow their bottom line.
In order to answer those questions, two things need to happen. First, you must treat marketing as a system and second, you must build the habit of collecting and evaluating metrics that tell you how that system is performing.
If you are just beginning to use metrics to help improve your marketing, don’t get bogged down in the plethora of marketing metrics you could track. Try to select a few that will help you answer the key questions you have about how your marketing system is performing and how you can tell if those results of those efforts are improving.
To help you get started, here are 7 metrics you can track that will help you determine how well you’re doing in the different phases of the customer life cycle.
1. Visitors – helps you determine how you are doing at attracting traffic to your business. I am referring to traffic in the broadest sense here; depending on your business, traffic may include visits to your office or store, people calling you on the phone, visitors to your tradeshow booth, or people visiting your website.
2. Opt-ins – help you measure how well you are capturing leads. Lead capture involves collecting contact information from your visitors, along with permission to follow up. While lead capture is often associated with online marketing, it applies to offline marketing as well. For example, a local grocery store may ask customers during checkout if they would like to receive updates when fresh produce arrives.
3. Hot Prospects – tracking the number of prospects who have shown signs that they are ready to engage in a sales conversation is a great way to determine how well you are nurturing leads. Hot prospects may be those who have requested a free consultation, asked for a proposal, or walked into your physical store. What behaviors do your prospects exhibit right before they buy?
4. Sales – tracking the number of hot prospects that convert into sales can let you know if you need to work on your sales process – either collectively or with individual sales staff.
5. Customer Satisfaction – scoring can help you determine how well your customers believe you are delivering on your promises and the expectations that you set during the marketing and sales process.
There are many ways to measure customer satisfaction. One popular method is the Net Promoter Score (NPS). Like most things in marketing, consistent execution and following up are your keys to success no matter how you measure customer satisfaction. Make sure you follow up with both unsatisfied customers (to see if you can rectify the situation) as well as satisfied customers (to collect referrals and/or testimonials).
6. Lifetime Customer Value (LCV)– is a way to assign a dollar value to the long-term relationship you have with your customers. LCV can help you determine how well you’re repeat sales, cross selling and up-selling efforts are performing.
7. Referrals Received – is the primary metric we use to measure our referral marketing results. For B2B companies (like my own) I also like to measure referrals given as I’ve found it to be a leading indicator of referrals received.
Once you are tracking these metrics, you will be in a better position to make smart decisions about where to focus your marketing efforts and budget in order to increase sales. For example, you may find that you have plenty of traffic but no opt-ins. Or you may have plenty of people expressing interest (opt-ins) but none of them are converting into leads – leading you to work on lead nurturing.
Over time you will have new questions and will develop new metrics to answer those questions. Don’t forget to periodically review your metrics and drop any that are no longer providing value.
Do you have a favorite marketing metric? Tell me about it in the comments below.