July 2016 Coaches Corner
Ignoring the Numbers In Your Business?
A surprising phenomenon I come across often is business owners who have no idea how their business is doing.
They aren't sure about numbers, they aren't clear on what marketing systems work, and they aren't particularly concerned about it. And I am completely bewildered by their nonchalance about the whole thing.
If you're not analyzing the numbers of your business, you're not running it effectively.
I can think of a number of analogies, but you are essentially taking a shot in the dark. And you're leaving your livelihood up to chance. Something I can't imagine you would do in other areas of your life.
So, today, I'm going to discuss the importance of knowing what is going on in your business, and the dangerous repercussions of ignoring it.
I'll talk about finances, and why you should count every red cent…
The “stupidity tax” for not paying attention to your marketing metrics…
And, why as an ExpertPreneur™, ignoring your numbers could mean falling short of your goals…
Counting Your Money
Would you ever write a check without knowing how much is in your bank account?
Not a great idea, right? It could drain you completely. Or worse, go over your balance and cause an overdraft fee. Perhaps even bounce.
Point is, when it comes to your personal life and finances, you are most likely on top of everything. You know what comes in, what goes out, and what you need to get by each month. Making life a little more structured and clear.
So, why aren't you doing that with your business?
I find it completely mind-boggling how many ExpertPreneurs™ don't monitor their business finances. They have no idea how much they are spending (in many cases, on tools and courses and nonsense they don't even need), and have no concept of what is coming in.
This is no way to run a business. In fact, I wouldn't even call it a business.
Not only should you know the basics of revenues, liabilities, and assets, you should know where everything is coming from and going. How much revenue you are bringing in, and how much of that is profit.
I talk often about having multiple streams of income. It's not only great for your business, but it can eliminate the trading time for money struggle that many business owners go through.
But, what good is it if you don't know what is coming from where?
If you have five different products, and one is performing supremely well, while the other four are faltering… that means you should refocus your efforts. It's a prime example of the 80/20 rule – 80% of your revenue comes from 20% of your efforts.
So, what steps would you take in that circumstance?
Personally, I would reassess those other product lines, and put a lot more focus in optimizing the one that is performing well. I may even redefine my ideal prospect based on who is buying that product and focus my marketing efforts there.
However, if you have no idea what is going on, you can't make any adjustments. And that is a wasted opportunity.
Now, I recognize that dealing with numbers and accounting can be challenging. Many business owners just aren't interested in fussing with them, or doing the “math.”
In that case, you could consider hiring a bookkeeper or accountant.
Frankly, I don't believe you need one at the start of your business. It's really as simple as keeping track of what comes in vs. what goes out, with a software program for small business like “QuickBooks.” Or by using a CRM (customer relationship management) system which has an accounting module built in.
But as things get more complex, with more product lines, ad expenses, etc… you may very well need someone to help you out. Getting help will pay you back tenfold, because the knowledge you gain will allow you to continually optimize your business to earn more while doing less.
How can you beat that?
In your marketing studies, you may have come across a veteran in the industry – Perry Marshall.
His claim to fame is twofold – he is yet another “client to coach” success story from GKIC (Dan Kennedy's Expert business), and he created the top-selling book on Google AdWords.
Perry coined a phrase related to AdWords that, while a bit abrasive, really sums up the results of not knowing what you're doing when paying for ads: “The Stupidity Tax.”
Basically, under the AdWords model, you pay to run an ad on certain keywords. And depending on the popularity and competition for the keyword, you'll have to pay a certain amount per click.
As you can imagine, that can get pretty pricey.
But what amazes me, and Perry addresses this over and over in his materials, is how many people don't know the results of their advertising. So, you may be running an ad on a popular keyword, spending $1.50 per click, but earning only $.50 per click and not even know it!
To put it bluntly: you are throwing your money away.
That's why he refers to it as Google's “stupidity tax.” Their model works because so many people have no idea what they're doing, and don't pay attention to their metrics.
And this is becoming even more of a problem as Social Media platforms are using a similar model. Facebook has paid ad space, and it is not cheap.
Unfortunately, this isn't the article to go in depth on those platforms. But the point is: how can you spend money on advertising and not monitor the results? Yet again, it's like shooting in the dark.
The same goes for any marketing strategy. If you don't monitor your click-through rates on emails, you not only risk launching unsuccessful campaigns, but you also risk getting shut down by Internet Service Providers for “spamming” too many “disengaged” people.
Something that could be easily avoided if you monitored your metrics.
Metrics for your website, sales pages, landing pages and all of your content, are easily available to you, in a simple to use format… when you take advantage of “Google Analytics”… the free metrics platform from Google. Just create a free account, paste a simple line of code into your web site, set up some “testing experiments” and you’re on your way!
Analytics programs are highly valuable, whether free or for a fee, and can mean the difference between dumping money into something unsuccessful, or focusing your energy into making something profitable.
How Are Your Events Doing?
When you run a webinar, do you have any idea what your viewers are doing throughout?
There are ways, through monitoring your metrics, to find out how many people attend, when they drop off, if they buy, and any other information that is relevant to your bottom line. Vital information for your business.
Think about it for a second: if you presented an hour long webinar, and discovered that everyone dropped off at the 5 minute mark, wouldn't you want to find out what might have caused that?
It is very rare to get something perfect the first time. Part of running a business is trial and error, testing and fixing. It's a necessary process to find the profits and success you are looking for.
You may find it alarming, and perhaps a bit disheartening, to learn that people are jumping ship after five minutes on your webinar, but imagine if you didn't know. The results would be disastrous.
Not only would you not be making the sales you expected, but people could be giving you negative reviews somewhere about a situation you have no idea is going on.
Ignorance is not bliss.
What's more, if you know what is happening at every stage of your webinar, you can target your follow-up marketing accordingly. You can send emails to specific prospects based on their actions.
If they jumped off early, offer them a chance to watch it again (after you have improved it). Acknowledge what happened, and they will respect you.
For those who made it to the end and didn't buy, offer them a different product as a downsell, or perhaps the same product in a different way. Those who did buy should be congratulated, and can even be led into an upsell.
Going back to the event itself, if you have certain profit goals for your company, and your product is at a set price, you should know how many you need to sell to meet your goals. You should also know the conversion rate of your webinar.
If you need to sell 100 units per month, and your conversion rate is 5%, how many people need to attend your webinar each month to meet your goals? 2,000.
Great, now you can work your marketing to achieve that, and know exactly how you are doing at all times. Any marketing is most effective when used with analytics, giving you information on performance.
Keep Count of Your Success
While numbers and figures are perhaps not as exciting as sales, working with clients, and creating products, they are integral to your success as an ExpertPreneur®.
And honestly, once you get the hang of understanding them, they actually become addictive. You'll find you want to experiment with everything to see how highly optimized it can get.
However, there is a middle ground here. Just being aware, and making a few adjustments on each campaign, product, webinar, etc… will put you in a position to get the most out of your business. Without having to deal with your marketing metrics on a daily basis.
You'll have higher profits, waste less time, and definitely throw away far less money. And if that isn't worth the effort, I don't know what is.