I've read some great articles online recently about Key Performance Indicators (KPI). They're articulated well and give a high-level presentation of important performance criteria. Heat map interpretation, bounce rates & lead intelligence, social engagement and other indicators are fantastic tools to refine the efforts of your marketing campaign.
What I don't see as much of is plain common sense indicators for business owners.
Many of the organizations that contact us simply aren't ready for this level of insight, they don't have a digital marketing campaign in place yet.
Can you relate? Are you struggling to get your online presence established? Is your business struggling or not growing as fast as you'd like? Do you even have performance goals in place for your business much less your inbound marketing campaign?
You may not have a digital campaign in place because you don't know what you're missing, that's where this article comes in. I don't need to get analytical like everyone else does with KPI, it's really much more simple for this level of application.
If you can relate to these key indicators your business is in bad shape.
KPI #1 You're not growing
If you're not going forward you're going backwards as the saying goes. If you're an entrepreneur you undoubtedly want your business to grow or be more profitable, (I mean both). If you're not seeing year over year increases on profitability or growth rate this could be an indicator that something needs to be addressed. Sure, you may sacrifice some profit margin to grow faster. Yes, you may be cutting back in some areas to increase profitability in the short-run. No, you shouldn't use these as an excuse to overlook deeper issues.
Targeting and nurturing new clients is a good way to change both issues. Aggressively pursuing new opportunities can grow your margins if sold right, and the more you find the more you grow. Invest first in your business development and don't forget that a sales person without tools is little more than a meeting setter.
KPI #2 Your phone isn't ringing
The phone doesn't ring with new sales opportunity very often. Not without the proper elements in place to help people looking for your services find you. How's your advertising campaign performing? Still have a yellow page ad? Have you evaluated the metrics on your direct mail campaign yet?
Costs are rising for these old world marketing techniques, and conversion rates are not. The fact is everyone is looking to the internet to compare goods and services, the statistics are overwhelming.
KPI #3 You only get new business from referrals
It never ceases to amaze me how many business owners will proudly pronounce that they get all their new customers from referrals. They beem about it like their business is so phenomenal that their customers tell everyone about them.
Great. Fantastic! It's not that I have an issue with referral business. My problem is they have no idea what an indictment that statement is to their current sales and marketing efforts. Regardless of how great your referral business is, you should still be gaining new business from many other sources. Advertising, outbound sales, inbound sales, networking, and trade events should all contribute to the cause.
If your business isn't growing at the velocity you'd like it to you might want to draw yourself a little pie chart. Put every client you have on a spreadsheet and add a column for how they became a lead. Dump the data into a chart and see how it looks. If you don't have a healthy balance you might want to ask yourself some hard questions about the holes in your lead generation efforts.
KPI #4 You lost more customers than you gained
This really points at one of two issues, or a combination of both. You're either not making enough new sales or you have some serious churn issues. If you're losing clients as fast as you can bring them on it's probably costing you a ton of money. It costs much more to attract, sign, and get a new client off the ground as compared to retaining existing clients. Your new customer to lost customer ratio should sit at 3:1 if you have any hope of achieving profit margin and dollar goals.
Many companies could use improvements in both retention and attraction, by targeting the right kind of new clients you can do just that. If you haven't yet defined who your ideal client is that's a great place to start. Once you have defined your target list it's time to get after it. Lead nurturing with targeted offers can help you qualify further and provide your sales rep the tools they need to differentiate your offering. Inbound marketing companies can also improve your credibility and reach through effective content management, growing brand awareness and the likelyhood of more targeted sales.
KPI #5 You spend more on accounting than you spend on marketing
I can't believe this happens, really?? You've been paying Martha to sit at a computer all day for 14 years but you can't afford to market your business? Give me a break, with all of the outsourcing options available for accounting and payroll preparation it's really a wonder to me while you're dropping all that coin on the dinosaur at the front desk with half a job and a full salary. There are just way better options for that money.
Fortunately for inbound marketing companies like us there are more of you out there then you like to admit. Fact is you're doing business the wrong way. You're too stubborn, prideful, near-sighted, or unaware to admit it. It's time to wake up Mr. Business Owner, review your assets today. Set some goals, make some plans, set a timeline for success, and invest in some help.
What's the #1 thing you provide your clients?
Where do you rank on Google for that keyword set?
If you can't answer the second question instantly you're in trouble. You're falling behind faster than you realize my friend. Wake up.
If you think there might be some opportunity for you to improve any of these key indicators check out this online marketing eBook, or maybe this recent blog article about building your GPCT. Common now, no excuses. They're free from our Denver marketing company.