As a business owner you are expected to know a lot, but there is nothing more important than knowing your numbers. I don’t mean like an accountant knows the numbers but I do mean the numbers that have the greatest impact on growth.
When working with business owners we focus on 5.
5 numbers that if influenced can have a profound impact on growth, but if you don’t know the numbers you don’t know which ones to change and therefore I find people focussed in the wrong place spending money and time with little impact.
Let me give you an example. Most business owners when telling me they want to grow are immediately focussed on new leads. A natural response you might say, but wait, do we really want more leads? If you aren’t making as much from the customers you already have, or you can’t keep them for long enough, or you can’t convert the leads you already have why on earth would you want to pay for more leads.
So 5 numbers..
- the number of leads you already have
- the conversion rate you are achieving
- the number of times they buy from you on average
- the AOV (average order value) when they buy and finally
- the margins you can command.
5 numbers to focus on and know, why?
If you aren’t converting enough of the leads you already have you don’t need more leads, if you aren’t getting your old customers to come back more regularly spending little more with you then you haven’t exploited your existing database and they are much more likely to buy again than cold leads, if you aren’t getting the market value for your product or service then why do you want to sell more at that rate?
When you know the number, you know where to focus so that will get you the best profitability in your business. Its not about working hard, its about working smart, so go and find your numbers.
By the way, if your numbers are amazing in 2 – 5 then go and get as many new leads as you can!!