It is often said that “Winners Know Their Numbers”, but what numbers do they need to know? It depends. Maybe you are a golfer. You probably track your golf scores, and some of the better golfers track the clubs they use for certain distances and circumstances. In fact, they even pay close attention to their back swing as well as the type of golf ball that gives them a better score. Many different things play into a golf score, and the one who has paid closer attention to all the details more than likely has a better score than the one who just goes out and randomly plays.
The same holds true in losing weight, balancing a checkbook, managing a budget, running marathons, playing baseball, time management and many other situations in life. People constantly have goals to attain, and the only way to be held accountable and be able to improve is through careful tracking.
In business, one thing that constantly causes a lot of anxiety among many business owners is tracking marketing. Business owners know that in order to grow a business they need to advertise. They also know 50% of their marketing works, but they don’t know which 50%! Even in large corporations this is often an issue. Now when you consider a small business, the owners wear many more hats and are even busier trying to cover all bases. Often it is the case that they figure they do not have the time or the wherewithal to pay attention to such details as marketing, and so it goes untracked.
By not tracking, what is being missed? We just had an example of one local small business that had been spending on average $272,000 per year on marketing and his gross revenues were around $2.5 million. After tracking, he was able to quickly see that some advertising clearly was not working for him, while other venues were. Since he could see which advertising venues were bringing in the sales and which ones were not, he was able to take money from the venues that were not working and apply it to venues that were working. He was also able to completely eliminate some venues that were not bringing in sales. At the end of last year, he had cut his marketing expenses by $100,000 and increased his gross revenues to $2.9 million. That made a difference of nearly $500,000 for this small business owner.
What numbers did this business owner watch? He had a system in place that tracked every lead that came through his doors. Those numbers were tied to the marketing that brought in the leads. In turn, those leads were also connected to a salesperson. (Might I add here that he did not just change around marketing; he also changed around lead assignment, but we will talk about that in another issue.) He was able to see exactly what leads each sales rep was closing, what types of sales they were closing, what advertising was bringing in leads, and what advertising brought in leads that turned to sales. All of those leads and sales had the cost of marketing connected to them so that he knew exactly how many dollars were spent to get each and every sale in his company.
This particular business owner was able to leverage his marketing with the advertising agencies, also, because of the tracking systems he had in place. Those agencies knew they were being held accountable in this owner’s tracking system for any marketing that was sold by them. So now, not only was the tracking helping the owner internally, it was also influencing those who dealt with him.
Tracking may sound complicated, and some years ago, it was. It was a lot of hours and money spent on figuring these costs and profits with paper and pencil. Nowadays it is much simpler with the technology we have available to us. In fact, once the proper systems are in place, it is only the click of a button and you have all the needed information at your fingertips.
If you are a business owner who spends money on marketing and you do not track, you are losing money. The only question is, “How much?” For some of you, instituting a tracking system may mean an increase of gross revenues much larger than $500,000 and some perhaps less. No matter what the situation may be in your company, gains are what we all strive for in business.
Now as a new year is beginning, new hopes and goals are set for businesses. With the help of tools and technology available to you by others who have been in your shoes, make this a profitable year!
Susan Raisanen is in the business of increasing revenues for businesses through the use of an effective lead, sales and marketing management software. She is a sales professional for By The Numbers (Recently renamed Profit Pro CRM ) who specializes in educating business owners, sales and marketing managers in regards to the very numbers that affect gross revenues. If you want to know more about lead, sales and marketing management tracking made easy, Susan invites you to submit your questions to her at susan@ProfitFinderPro or call her at 480-652-9212.
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