Mary called from Baltimore with a question about her web site. She wanted to know what was wrong with it. She had worked hard to put up a site to promote her business but she wasn’t generating enough revenue with it.
Mary had made the mistake that almost every small business owner makes; she was focused on the wrong numbers and it was keeping her from reaching her business goals.
Everyone wants to see growth in sales and net revenue. It’s important for small business owners to set income goals and to watch sales results, but too much emphasis on these numbers can prevent you from reaching your goals.
Using your revenue figure to guide your business strategic marketing is like driving by looking in the rear view mirror the whole time. That number tells you where you’ve been. It doesn’t tell you how to get where you want to go.
There are a couple of key numbers and ratios to keep in front of you that will help you get to your sales ‘destination’.
Like an Iowa farmer growing soybeans, you’ve got to carefully plant seeds and nurture plants to maturity to ensure a good harvest and a good profit. The amount of seed you plant and the percentage that germinates and grows well determines your farm’s profitability. The same is true in marketing and sales; the number or leads you generate and the number you convert to sales determine your income.
These are the two most important numbers to pay attention to in small business strategic marketing. Use them to evaluate your marketing and determine how many sales you’ll generate:
1. The number of qualified prospects in your database.
These are people who’ve told you they have a concern or problem you can help them with and who want to hear from you again.
2. Your prospect to client conversion rate
The percentage of qualified prospects you convert to paying clients.
The math is simple; the more qualified prospects you have and the higher your conversion rates, the more revenue you’ll generate.
Stop wasting time on marketing that maintains the status quo and discover a way to market that brings in more and more prospects and clients. You could let another year go by and still be stuck in the same situation, or you could do something about it today.
Your sales will stay frozen at present levels if you focus on how much revenue you’re making and ignore the importance of building your list of qualified prospects. You could double your business in the next few months by building your database of qualified prospects and improving your conversion rates.
Business Marketing Numbers
You don’t need to be a math wiz to become an expert at marketing math. Pay attention to these numbers on a weekly basis;
• The number of people who saw your ads, read your articles or received your mailings.
• The percentage of these people that responded to your ad or article. It’s not how many ads you run, but how many people pay attention to your ads that matters.
• The percentage of respondents that actually gave you their contact information and added themselves to your database. These are the people who have identified themselves as qualified prospects who are interested in learning more.
If you’re marketing through your web site, it’s incredibly simple to identify these numbers daily and weekly to track the success of your marketing. Here’s how;
1. Look at the number of unique visitors to your web site daily or weekly.
2. Divide this number by the number of people who contacted
you. This is your conversion rate of site visitors to qualified prospects. If your site is set up correctly, at least one out of ten people should be contacting you and adding themselves to your list of qualified prospects.
If you use Google Ads to drive visitors to your site, you can send visitors to specific landing pages and increase your conversion rate to 20 or even 25%.
What should you expect from your web site? For every hundred unique visitors to your site per week, 10 to 25 should be sending you an email requesting more information about your products and services. Each month your list of qualified prospects and your sales should grow.
Before you finish this article, make a commitment to apply this simple marketing math to grow your business. Set a goal for your business. Look at how many qualified prospects your marketing is currently generating.
Write this number down, then put a diagonal line across it and next to it write down the number of qualified prospects you want to add to your database each week.
I’ve been doing this little exercise for two years with my current web site. My goals for acquiring qualified prospects get larger each month as my business grows. My goal for the first quarter is 450 500 new prospects per week.
What’s your prospect acquisition goal?
Ready to finally discover how to reach and exceed your marketing goals this year? Get the one small business marketing tool that has been proven over and over again to help people like you grow their businesses by 50% or 200% in just a couple of months.