Understanding Sales and Tracking
With most of the discussion focused on traffic in marketing circles what is sometimes lost is the all-important factor of conversion. If a company can get thousands of visitors either to their website or their store location, without anyone making purchases then the marketing is ineffective. Even with a stampede of people coming to your company, low conversions will eventually mean that you’ll be out of business.
Therefore, companies and their managers must understand the key numbers in a sales process. Not only must they understand the numbers, but they must track every promotional effort in order to know how they’re performing against each one of these numbers or metrics.
The metrics spoken of here, are not designed to paralyze a company with constant analysis. They’re designed to give decision-makers the right information about where to take action in order to properly build their business.
Of course, every company should know down to the penny how much they’re actually spending on advertising. Whether its paid advertising or service fees used in order to execute social media. The starting point for all evaluation is how much a company is currently spending on their promotions.
Once you’ve done that there are three other basic metrics that you will need to have a firm grip on. First, you need to know how many leads your promotional efforts are giving you. If you do not have a system in place to track the number of leads you’re getting, this is probably the first that you’ll need to take in order to start building a successful marketing plan.
Once you determine how many prospects your marketing is giving you, you’ll want to know how many of them become actual paying customers. Marketers call this the conversion rate and you’ll want to be continually aware of how this number is trending in your business.
This has everything to do with your sales process.If your conversion rate is going up, that means that someplace in your organization that sales are getting easier to make. If the conversion rate is going down, that means that someplace in your organization that sales are getting more difficult to make.
Lastly, you’ll want to know the average dollar amount that each customer spends with you over the course of their relationship with you. This information is important because it will help you to focus on how you can be more profitable with each and every client that comes either to your website or to your door. Understanding whether or not this average value is rising or falling, will be important in your determining how you want to work with your sales staff.
We will continue this discussion in our next post.