Are You Monitoring the Vital Signs of Your Business? (Ep 36)

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Are you monitoring the vital signs of your business?

Welcome to episode 36 of Digital Marketing Made Easy. And in this episode with me, Dawn McGruer, digital marketing speaker, author, and trainer, we are going to look at a vital topic. In fact, we’re going to look at whether your business is healthy. Now, are you monitoring the vital signs of your business? Now, this is a big question for many organizations, because when we start talking about metrics, it’s often the bit that people don’t find the most fascinating. So you have to really take care of your numbers and you have to understand what the truth is. And when you own a business, whether you are working in it, or you’re in a role, it’s the same because to be effective in business today, you have to really get a grasp on what the numbers are.

Now, many people think that this is down to the account side of things, the numerics of money that we’re making, the costs, et cetera. And to a degree it is, but we’re looking at it from a more dynamic way, a more business as usual. Like literally every single day, you should have your finger on the pulse checking to see how healthy your business is, how well it’s running and looking at things like your numbers and where the potential gaps might be.

Leads and conversion rates

So when you start to monitor, a couple of the vital signs that you are looking for are things like, where is your business coming from? So looking at, for instance, how healthy the different aspects of your business are. This could be marketing. This could be sales. This could be looking at how many, for instance, leads are coming into the business each day, how many are converting, and what percentage of people that you need to be a sustainable profitable business.

Now, what happens is, is that you really need to understand how things work. What you want to do is look at where are your leads coming from? Where are your current customers coming from now? Now, look at all these different lead sources and try and understand what is the most effective way of building a scalable business. Because once we understand what is working already, then we can start to really maximize that. Now, this is a really important number because you need to know the maths of selling. Now, even if you’re working in marketing, I truly believe that they go hand in hand. You can’t have marketing without a view that the pipeline is to sell more. Ultimately a business needs more customers. So how do we look at this on a daily basis?

Now, you might not want to drill down looking at the metrics in terms of your accountancy, but having an understanding, number one, how many leads come into the business each day? How many of those leads are converting to customers? And how long do they take to become a customer? Because often the vital signs that we need to know is that if, for instance, you have a lead time that is maybe a year or two years… I know some businesses that might take three years of nurturing a business into becoming a paying customer. Now you may have a lifecycle of a customer that once they buy from you, that they’re with you for years and years and years. But on the other hand, you could have a business whereby someone buys once and that’s them done. So what we have to do is look at what are the ways that we can increase our customer base.

Keeping your finger on the profit pulse

Now, if you’ve got a finger on the pulse about profit, it means that it’s going to be very difficult for your business not to absolutely thrive, not to push forward and not to grow and scale because profit is what makes the world go around. And it is what makes your business sustainable. So looking at three simple things for me is definitely part of an efficient or a proficient digital marketer’s role. Now, even from a business owner’s perspective, we need to understand how many customers do we need to be amazingly successful?

Let’s look at ways that you can increase your customer base. Let’s look at ways that we can increase our average order value. Let’s look at ways that we can increase our purchase frequency. Now, these three amazing goals are relevant across the board, regardless of niche, regardless of industry. And this is the great thing that it doesn’t take many numbers to have a really good understanding of what is actually moving the needle in your business. So where are your gaps? Where are your growth signals? Where are the things that we can really optimize and capitalize on to get people coming back again and again, and spending more? This is things like looking at customer satisfaction. This could be a really great signal because this will indicate how many repeat customers or referrals you might get.

So when we look at key performance indicators, they compliment a company’s main business goals. And these are things that can really, really shift the difference of you having quite a hard time with maybe cash flow or getting customers, to just pushing over to having more ease and flow within the business. Company-wide KPIs are things like customer satisfaction. And that refers to the company as a whole, looking down and drilling down into each customer journey, and understanding how somebody comes into your business. How you can really delight them at that point from the minute they’re onboarded and drive that digital or face-to-face experience. So looking at processes, number one, of where your customers come from, how could you get more? How could you increase that purchase frequency and average order value? What we want to do is kind of treat our business like we are the physician, we’re the doctor, overseeing the overall health of your business by just tracking a few very important but yet really insightful vital signs.

A recap of the key things

Just to recap, how do we increase your customer base purchase order value and frequency? Order value could be up-sales, cross-sales, bundling things, looking at the differences of having just a model in your business where you’re selling singular products, versus when you start to use models that are recurring so that you can predict cash flow, and you have a base cash flow that’s coming in each and every month. And that could be enough to cover all of the bills. It could be enough to pay you, and it could be enough to take extra dividends or whatever it is, but you need to know those magic numbers. And the great thing is, is these numbers are different for everyone and they don’t have to be vast because it depends on where you are in your journey.

If you are just starting out, start small, be realistic. Think about, “Right, how can I get 10 customers? How can I get one customer to spend more? How can I get them to spend more frequently?” So really drill down and understand what your business model is and whether it’s actually going to achieve those desirable goals and results that you want financially. Because honestly, numbers are not my thing. Never have been, but I absolutely love numbers when it comes to my business because they’re the vital signs. I need to know that it’s healthy. We wouldn’t let our bodies go into disrepair or bad health. We want to keep on top of it. And instead of reacting and trying to fix bad health of a business, we want to be proactive and really make sure that when we are looking at our business, that we can make it healthier and healthier and healthier. Instead of living sort of just the baseline like it’s okay, it’s surviving, but it could be better, let’s push for the maximum.

Remember, customer base, increasing that average order value and purchase frequency. Understanding number one, where your leads come from, what is the most successful lead source? How much do those leads cost? And then obviously how much are you selling your product for? Is it singular or reoccurring? So how much profit do you make from that person? Now, you’d need to understand how much it costs to deliver what it is that you do. Is it something that is delivered over a year or three hours or three weeks? Who’s involved in that? So understanding the running cost of the business versus the cost of actual sale and making sure that you are pricing accordingly so that you’re going to get maximum profit.

And when we start to really drill into it, could just be subtle, small changes, but make a massive, massive difference. Could be the difference of charging £50 more, £100 more, £1,000 more, but really understanding what the cost of delivering that product or service be it physical or service-based business, the running cost of the business, and obviously how much does it cost you to get a customer? How long does it generally take them to become a customer? How long do you have to nurture them for? And then lastly, how long will that customer be with you?

I hope this short and short podcast got you thinking about different things in terms of keeping your business healthy. Let me know if there’s any help that you need in terms of choosing the right KPIs for your business. And you can always find me online @DawnMcgruer or @businessconsort. So I will see you next episode and enjoy. Remember, we’re always going to be driving for just three things and keep it simple. And don’t first strive for something that feels unattainable. Always go for something that you can really see has potential of achieving so you won’t be disappointed. We can always push those boundaries, but be realistic. Have an amazing week and good luck.

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