Business return on investment
Business improvement is hard when you don’t “know your numbers” and fully understand the key drivers of your business.
We all want to increase our sales, earn more referrals, and keep existing clients loyal to us. We all spend money, too, on marketing that we hope will help us do this.
But we need to know the return on investment (ROI) of everything we spend our money on. We need to understand the impact, or lack of impact, these investments are having on the business goals we’re trying to achieve.
If we don’t, we could be spending thousands of dollars blindly, with no idea where to invest more money in and where to invest less, and subsequently this impacts our business results. It impacts the bottom line.
Where have you heard about me?
In order to evaluate ROI and get insight into what’s working and what’s not, we need to track where our business is coming from.
Do this by asking your prospects and clients where they heard about you. Was it from a website, a billboard ad, or maybe a social network?
Make sure to record every answer you receive in your contact management software. You’ll then be able to go into your contact management system and see how many prospects and clients you’ve received from where.
In addition to knowing where each prospect heard about us, there are other key business metrics we need to understand.
These metrics include total number of leads versus number of qualified leads, number of qualified leads versus sales presentations scheduled, and number of presentations versus new business.
For example, if you’re a REALTOR®, you’ll want to understand all of the above numbers in addition to ones such as percentage of listings versus solds, average number of days your listings are on the market, and selling price versus asking price of your listings.
Ensure that you’re maximizing your business performance
Let’s use Mark as an example. For a long time, Mark saw himself get many more leads than he’s ever seen in the history of his career. Yet, at the end of each month, he had very few listings to show for it. He saw an increase in leads but no increase in business.
Now, this could be due to a number of reasons but until Mark understood certain key business metrics, he was unable to pinpoint exactly why this was occurring.
The problem ended up being a very low presentation close rate. Once Mark took measures to improve his presentations and his presentation skills, he saw a lot more of those leads convert into valuable and potential lifelong clients.
Reap the rewards
At the end of the day, don’t be fooled by what what’s working and what’s not, where your business is coming from, and what you should be focusing on to improve and grow your sales.
The key is to know your numbers.
Invest more time and money into the actions and investments that produce the largest ROI. Scale back on those that are not performing as well or do not have the impact that you’d like them to have.
Use your contact management system to keep track of your data and generate various reports that will provide you with key insight into your business.
When you do the work that’s involved in understanding your business better, you’ll find that the payoff will be tremendous.