Business Leverage: What You Can Measure You Can Manage

This is article 3 in the series of articles on business leverage – the keys to growing your business fast.

You need to measure the results of each business development initiative you implement.  Why? Because, if you don’t know the numbers, how can you improve them?

Once you have recorded the results you can compare them to your other activities or initiatives to see which one has the greatest yield.  If you measure and compare everything, you will be doing what few companies do and you will out-grow your competitors.

Most businesses do not ‘measure and compare’ but they gamble their destiny on conjecture and subjective decisions.

With your marketing activities you need to understand this fundamental truth – you do not have the right or power to predetermine what the marketplace wants – to do so is arrogant in the extreme.

When you test one approach against another and then carefully tabulate the results, you will be amazed to discover that one approach almost always produces substantially higher results by a large margin.

Measurement has a purpose.  It’s to demand maximum performance from each marketing effort.

When testing and measuring, change only one element at a time and keep measuring and testing to find out ‘how high is high’!  This means that you have a ‘control’ approach (i.e. your current best performer)

What should you test?  You can test some or all of the following: price, offers, packaging, headlines, copy, graphics, the list, scripts, colours, guarantees, timing, advertisement size, demographics etc.  With web pages, Google make this process easy using a process called ‘Website Optimizer’.

You also need to buy in mind that it’s not simply enough to measure the numbers.  The qualityof response is just as important, so you need to also measure how many of your leads actually buy.

In fact, it even goes further than this.  what you really want to measure is what your customer is worth to your business over the lifetime of your relationship.  If you know the ‘lifetime value’ then you can determine how much you can afford to spend in acquiring that customer in the first place.

Not one businessperson in a thousand knows how to calculate ‘lifetime value’ and that will be a lesson for another day!

If you would like me to help you with your web marketing then take a look at Web Marketing Machines.

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