There is a really big question around ‘what to actually measure’, because in this day and age there is so much data, that there’s too much. So, how do we actually get to the top 3,4,5 core metrics and bits of data that we need to analyse as a business.
That’s how you evaluate your marketing. To see whats working, and how well, and whats not and how do we fix/get better.
So, you need to setup your tracking reporting across all your different software.
In this day and age there is so much data. So getting crystal clear on what is really important is the key! For us, there’s four core metrics or areas that you need to evaluate.
1. LTV – By far the most important, is that life time value of a client. You need to know over a span of 4 years we made $2500 out of these clients because they purchases 21 times from us. It’s a very grey area for most businesses, they have no idea what that is. You need to fix that as a No. 1 priority. If I make $2500 out of a client, I know that I can then spend $250 in my marketing to acquire that client. If you don’t know what the this (LTV) is you can’t set what the marketing costs should be. Then that becomes a scale game, give me as many as I can at $250, laughing… happy days.
2. Revenue by channel – Similar to this (LTV) but it’s by source. It’s revenue by channel or source – Google ads gives me $42000 in revenue, Facebook gives me $2000, direct gives me $5000, whatever it may be, but you need to be able to calculate by your marketing channel, the revenue that you make, otherwise not knowing this, your guessing, should I put money into television, do I put money into radio, what do I do with it? Until you get that figure you’re flying blind.
3. Conversion rates – It’s conversion rates across the board for your business, it’s not just online conversions. How well is our website converting to a lead? How well am I converting that lead to a sale? How well are we converting that sale into a repeat client? And so on down the track.
So once again, we are continually growing and improving the this (LTV) because we know the core conversion rates across the board.
4. Sales – Sales, broken down into activity and pipeline. Activity is all about a cadence, how regularly we are doing things, and pipeline management is how effective we are at doing things. We need to make 75 phone calls a day. I need to greet 50 customers when they enter the restaurant per day. That’s how much you do of it and your pipeline tells you how well you do it.
For example, in your sales process you have say 5 stages. I’ve got 50 people at stage one but only 5 at stage two, which means things are breaking down at stage one, that’s where you need to educate and train me. That’s really important to know where things are falling down (not just that they aren’t working, but exactly where).
They’re your four core metrics, as a starting point, that you need to get right for your business.