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Use these two numbers to double your business in 12 months
by Charlie Cook
Published on this site: April 28th, 2006 - See
more articles from this month
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 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 s.ales '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 s.ales;
the number or leads you generate and the number you convert
to s.ales determine your income.
These are the two most important numbers to pay attention
to in marketing.
Use them to evaluate your marketing and determine how many
sales youÕll generate:
- 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.
- 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.
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.
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;
- Look at the number of unique visitors to your web site
daily or weekly.
- 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 latest goal
is 500 new prospects per week. This translates into 6 to 7
percent more business each month. With a little planning,
you can see your business grow just as fast.
The author, Charlie Cook, helps service professionals,
small business owners and marketing professionals attract
more clients and be more successful. Sign up to receive the
Free Marketing Strategy eBook, '7 Steps to get more clients
and grow your business' at http://www.marketingforsuccess.com
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