As a small business owner, you’ve likely had to accept that stretching your marketing dollar just goes with the territory. After all, your business doesn’t have the deep pockets, the vast resources or even the manpower of your larger competitors. To make sure you’re maximizing returns you must be able to track the success or failure of a given marketing initiative. As such, we’ll look at five simple key performance indicators for small business marketing.
Key Performance Indicators for Marketing
Performance indicators are used by all kinds of companies in all kinds of industries. The main purpose is to measure performance via essential key indicators. It’s these indicators that determine the company’s overall success in managing its business. Key performance indicators help companies gauge whether an approach is working, or whether it’s missing the mark.
To keep this post as simple as possible, I’ve included a list of five simple key performance indicators for small business marketing and have included links to articles that provide further insight into how to benefit from these approaches. While marketing is never an exact science, there are some simple ways to measure your success in finding customers and growing your share of your market.
Increasing market share is an essential aspect of growing a business. However, it’s not enough to just determine existing market share. What’s ultimately needed is for the small business to be able to forecast its future market share. Therefore, the first marketing KPI is based on the small business enacting plans to increase its share of the market. This requires determining current market share and then accounting for the market, or industry’s, growth in future market share projections. To read more about the steps needed in forecasting market share, read: Importance of Forecasting Market Share in a Growing Market
2. Reducing the Costs of Customer Acquisition
No matter how profitable your product or service is, if the costs of finding and converting potential customers into paying ones is too high, then your business will lose. An essential marketing KPI is reducing the company’s costs of finding and converting leads into customers. What are your company’s costs of finding customers? How much does your company spend to locate and convert these potential customers? Lower these costs and your company will increase its gross profit.
To read more about reducing the cost of customer acquisition, please read Does Your Business Know How Much it Costs to Get a New Customer?
3. Leveling Out the Ratio of Qualified versus Unqualified Leads
If your marketing plans are producing too many unqualified leads, then it’s a guarantee those plans are missing the mark. If that’s the case, then your sales team is wasting its time. Worse yet, you’ve likely not taken the time to determine what a qualified lead is versus what an unqualified lead is. An essential marketing performance indicator is to reduce the incidence of unqualified leads resulting from your marketing efforts. Reduce this and your sales team will spend more time pursuing customers who are more likely to place orders. To read about the importance of qualified versus unqualified leads, please read Why Are Qualified Leads Important in Marketing & Sales?
The above video explains five low-cost marketing strategies. To learn more about these strategies, please go here.
4. Tracking the Results of a Given Marketing Initiative
Increasing marketing return on investment (ROI) is predicated on pinpointing the most cost-effective and efficient method of finding customers. To do that, your small business must track the results of a given marketing initiative. In this sense, it’s about measuring performance along multiple marketing approaches and systematically eliminating those approaches that don’t produce results. Take the time to measure each and every initiative relative to how many actual customers they bring in.
To read more about tracking the results of an individual strategy, pleae read: Calculate Customer Acquisition Costs From Three Marketing Campaigns
5. Tracking Your Marketing Budget
One can’t discuss small business marketing key performance indicators unless your small business has the mechanisms in place to track your marketing expenditures. Regardless of how little your company spends on marketing, it’s still essential to track those expenditures within a marketing budget. After all, there’s little to no way you’ll be able to determine the most cost-effective marketing approaches if you don’t first take the time to establish your marketing budget.
To read more about putting together a budget like the one above, please read: Sample Marketing Budget Excel Sheet: Graph & Pie-Chart of Expenditures
Consider this but a list of the simplest, and perhaps most important, marketing KPI for your small business. Again, lower your costs to produce qualified leads. Next, lower your costs to turn leads into clients and then lower your costs to retain those clients for the long-term. The video below explains how to run a customer reward program that will help increase your customer retention and lower your costs of keeping the business you've won.
Learn more about the back-end rebate program here.
Comments