June 30, 2022 by Michael Diez
It seems most small businesses adopt a simple strategy to grow their business: copy what the competition is doing.
Assuming the business owner picked the right competitors, what are the goals? How do we know we are catching up or beating the competition?
And even if we are not beating our competitors, how do we know our strategies are moving the business in the right direction?
As a business owner, you might take note of your competitors' number of followers on social media, keyword rankings, how busy their store looks, etc.
But without tying these metrics to business metrics like sales, leads, and customer lifetime value, you are leaving your business up to chance.
This may be one of the problems you face as a small business owner, you don't know what metrics to track.
Tracking business metrics means keeping your CRM software up to date and in sync with digital marketing analytics.
Also, you may not feel comfortable sharing this data with anyone you don't yet trust.
So that's it, you give up, vanity metrics are meaningless, and tracking business metrics is too hard.
But you have to tie them to business metrics.
For example, if you know that for every increase of 1000 followers your reach increases by 100 per post, and that for every 1000 people you reach you generate a lead, and you convert 20% of the leads into customers, and each customer brings your business $5000 over their lifetime as a customer.
Well, that means every 10 posts we should be getting an extra lead, and every 50 posts we should be getting an extra customer.
Now we can decide what strategy to employ to increase business: more followers or more posts.
Well, each business is different.
Say your goal is to generate $30K in revenue every month.
If you get the $5000 all up front, then maybe your goal is to generate 6 customers every month.
But if it takes 12 monthly payments, you may need to generate 72 customers per month.
Work backwards and you’ll find you need 10K followers and post 30 times a month to get 6 customers every month.
Or 120K followers and post 30 times a month to generate 72 customers.
These are the goals.
Imagine a sports game with no goal. Two teams going against each other. What will they do?
Some players will do nothing. Other players will make up their own goals.
At the end of the game, you have to pick a winner. Who will it be?
Even when you reach your goals, you’ll feel like you wasted your time and money and you still don’t feel confident you are moving the business in the right direction.
Any respectable digital marketer uses Analytics to track leads, and that is a good start.
Great digital marketers track lead-to-customer conversion rates and feed those numbers automatically into Analytics to optimize their digital marketing campaigns.
For eCommerce businesses, this is relatively easy since sales are tracked by computers.
For businesses offering services, tracking business goals is harder, but you’ll go a long way if you start by tracking phone calls and website form submissions.