Did you know that according to 2016 statistics published by the Small Business Administration (SBA), about 50% of all businesses survive at least five years, and that number drops to 1/3 after 10 years or more.* Whoa! The importance of keeping your eye on the ball can’t be overstated.
Lots of small businesses may pay special attention to sales, revenue, and cash flow. While it’s totally appropriate to monitor those items, it only tells you half the story. There are other critical things to consider.
10 Important Ways You Should Analyze Your Business to Gain Marketing Strategy Insights
One of the most important aspects of your business is marketing—PERIOD. I’ll walk through 10 Important Ways You Should Analyze Your Business that’ll not only help you dig deeply into the health of your business, but will also help you make better decisions with your marketing strategy. Let’s jump right in.
Insight #1. Revenue Targets
Set monthly, quarterly, annually, weekly, or even daily revenue targets (depending on your business model). This forces you to keep your eye on your pipeline, leads, and subsequent marketing strategy.
One easy way to track revenue is to set an annual goal and divide it by 12 months. Most businesses have seasonal sales, so you can always weight certain months with higher target percentages, but start there. If sales are off for a given tracking period, you can work to get ahead of the slippage.
Also, putting these tracking parameters in place can give you historical trends that can tell a story and give you a different perspective of your business.
Insight #2. New and Repeat Customers
Work as hard as you can to track not just new but REPEAT customers and clients. You’d be surprised how many businesses can’t answer this question quickly: “How many new and repeat customers do you have?” New customers in the door is critical, but tracking your repeat customers is even more valuable.
Remember the 80/20 rule. About 20% of your customers produce 80% of your sales.
You must go on a journey to find your best customers. One-time buyers are great for incremental and seasonal sales, but repeat buyers are your bread and butter and help your business to grow. The only way to do this it to start tracking your customers.
Insight #3. Retention Rate
Retention rate measures the number of customers or clients who continue doing business with you or buy from you over a specified period of time.
Retention rate is different from turnover rate. Retention rate simply reviews retained customers over time.
Let’s say you had 17,000 customers on January 1, 2016, and of those 17,000 you were able to keep 16,200 by December 31, 2016. Your retention rate would be 95.3%. (16,200/17,000×100).
Alternatively, in the example above, your turnover rate is 4.7%. You had 17,000 customers in January and 800 stopped doing business with you that year (800/17,000×100).
Looking at customer loss is just as important as looking at customers retained. Why? If you find that you’re losing more customers each year, something may need to be adjusted with your loyalty program, product design, service delivery, price point, marketing, customer service, or value proposition.
Why else are retention rate and turnover rate important?**
- It’s 5–7 times more expensive to acquire a new customer than to keep an old one.
- It costs a company $234 every time they lose a customer.
- Loyal customers are worth up to 10 times as much as their first purchase.
— Angela Murphy✏ (@justpositionit) December 5, 2016
Insight #4. Improvement Needs
Every business has things that can be improved.
What I mean by this are things like:
- Hold times
- Customer follow-up
- Email marketing
- Your website
- Conflict resolution
- Event execution
- Your copywriting
Really dig to look at all areas of the business that need improvement, and work on those areas. Why? Making even the slightest tweaks to these components can have a major impact on customer loyalty, prospecting efforts, and sales.
Insight #5. Successes
Take the time to identify success stories. When you find several successes, conduct a full postmortem on every detail of that success and develop a repeatable framework to follow.
Also, gather testimonials. Testimonials are one of the most important assets your business has and should be used for not only prospecting, but also for customer loyalty.
When a customer provides a testimonial, they actually become more loyal to your business. Think about it. Openly giving a testimonial is similar to taking marriage vows in front of your friends and family. It’s a powerful oath.
Insight #6. Failures
You can learn more from your failures than you can by succeeding. Everyone has them. Look for your failures. Your business can use its failures as an opportunity to learn, improve, and win. You must do this.
Maybe you launched a product incorrectly; maybe you said the wrong thing to the media, employees, or a customer. Maybe your messaging is flawed.
“Failure should be our teacher, not our undertaker. Failure is delay, not defeat. It is a temporary detour, not a dead end. Failure is something we can avoid only by saying nothing, doing nothing, and being nothing.” – Denis Waitley
Be honest and unashamed about yourself and your business.
Insight #7. New Product or Service Deliverables
A staple of being in business is launching new products and services. I talked about this in-depth in my article, “9 Avoidable Mistakes that’ll Derail Your Product Launch.”
If you’re in business, you’re likely thinking about what new product you can bring to market or how to improve an existing offering. Track all your new products and services launched so you can have historical figures for comparison reasons. You can compare year-over-year revenue and even costs to new products.
Let’s say you launched two new products or services in year X and had revenue of Y, or launched one new product in year X and had revenue of Y. You can gain valuable insights.
Insight #8. Customer Complaints
As a business, you’ll be well served to gather and track all customer complaints.
This is a must and can give you much-needed, valuable information and reveal gaps in your business such as:
- Product improvements
- Service needs
- Customer experience mistakes
- Website usability errors
- And more
Insight #9. Customer Praise
Just as it’s important to identify successes, keeping track of specific customer feedback and sentiments can inform where you’re winning. This will allow you to keep your competitive advantage and even improve it.
Survey your customers on an ongoing basis to help you gather and understand satisfaction, product wins, and differentiators.
Insight #10. Leads and Pipeline
Where are your leads coming from?
Are they coming from referrals, advertising, social media, public relations, organic search, television, billboards, or direct mail?
Just as you should track revenue, also track leads monthly, quarterly, annually, weekly, or even daily (depending on your business model).
Maybe you tried a new lead generation strategy that yielded less leads than the prior month or week or year. Tracking leads will help you uncover trends that may be less obvious. This also gives you historical figures that can tell you a bigger story about your prospecting efforts.
What Does All of This Have to Do with Marketing? Everything!
Each one of these 10 Important Ways You Should Analyze Your Business to Gain Marketing Strategy Insights has everything to do with your marketing. These 10 elements can help you make important business and marketing decisions that can transform your business.
Look beyond revenue and sales targets and uncover successes, failures, service gaps, and product and service mistakes. Your business will thank you for it!
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