A good entrepreneur will have no trouble working out how to build a product that will sell. A great entrepreneur will even be able to target their customers with precision. But what sets a truly successful business-person apart from the others is their ability to test and measure everything that their business does.
It almost becomes an obsession for some – which is exactly what it should be. Without testing and measuring your product quality, your service abilities, your marketing, your sales process, or anything else in the business, how are you supposed to know if things are improving or not? How will you know what works for your business, and what is a complete waste of your time and resources?
By measuring your business activities and analysing the results accurately, you not only save yourself time and money, but you can hone your business from simply ‘doing ok’ into a high-performance machine. Many business owners simply don’t know where to start, here are some tips about testing and measurement that could help you improve your business.
WHAT SHOULD I BE MEASURING? AND WHY?
Every business will have a variety of activities that are unique to their industry, and some that are exactly the same as everyone else’s. When assessing what to measure in your business, look at:
- Sales Figures
- Online Marketing Efforts
- Real World Marketing
- Email Campaigns
- Social Media Activity
- Operating Productivity
- Cost Of Sale
By measuring the above areas we can determine if there is room for improvement.
Knowing how the different areas of your business are performing can help you assess where your business is strong, where it is weak and what factors you can change for the better, helping you manage your performance proactively and efficiently. You should be measuring both financial and non-financial elements of your business on a regular basis in order to see windows for improvement.
HOW DO I TEST AND MEASURE?
Marketing is one of the easiest areas to see this in action. For example, if you started a new social media campaign to promote a particular product, you may invest 3 hours in designing your advert and £50 to promote it to the right audiences, then set it running. Now what do you do? Many business owners would simply leave it going and hope for an increase in customers, and if they did see an upswing, assume it was a success. But what if those new customers didn’t see your ad at all and ended up coming to you through another channel? Your campaign could have been a complete failure, and you would never know.
Here’s what a ‘test and measure’ business owner would do:
- Make a note of every variable in the advert’s target market, along with the advert itself – the wording, imagery and what positioning were used. This will give them a baseline to analyse later on.
- Set the advert running for a set period of time, and ensure that the sales team are briefed to ask where new customers heard about them.
- Check in on the performance of their advert daily using that particular social network’s tools. All social networks that allow adverts will provide some form of analytical tools, which will help you understand how your advert is performing with your audience.
- When the campaign is over, they will take this data and analyse it. Were they getting a lot of impressions (people who had seen the advert), but no click-throughs (people going to where you want them to i.e. your website)? This would mean that the advert wasn’t compelling enough to inspire action, and they could focus on this next time. Or maybe they were getting click throughs, but those who clicked weren’t getting converted? In this case, they can work on conversion rates from the website, sales team, or wherever the ad was directing people to.
By measuring the success of the campaign, our business owner knows what worked and what didn’t, so can improve their efforts next time. The same basic theory can be applied to almost any area of your business; from monitoring customer loyalty to finding out how many leads your sales team are converting into customers. By testing your ideas and measuring performance, you can grow your business quicker and more effectively.
As a business coach, I work with a lot of business owners who want to dramatically boost their growth, but don’t know how to break that glass ceiling. Through carefully planning, goal setting, testing and measurement of new, innovative ideas, I can help you do that. For more information, or to book your complimentary 15-minute session, get in touch with me today.