It is a funny thing about business, but the more you have control over a thing, the more power you have over, which in turn gives you greater and greater advantages.
Let’s take the numbers we track in business. The thing is accounting aside most businesses are if I have seen anything over the last 30 years sloppy at best when it comes to being on top of their numbers.
At best when asked most business owners will guess at their numbers. Even the major ones like cash flow or profit and loss.
Numbers are a nuisance for most, not a tool to be used.
The thing is, tracking the right numbers is essential to business success. Yes, you can get succeed by accident, many do. They track just enough numbers to stay afloat.
The thing is most business owners don’t track the right numbers in their business.
Here is the thing… There are some numbers that give you superpowers. They give you control over your business and oftentimes give you an advantage over your competitors.
I call these numbers “The Essential Business Numbers”
These are the numbers all businesses should track.
Leads
We should always know exactly how many leads you get. Don’t guess! I have been into businesses where they have been off in the estimation of their leads by a factor of ten. You need to know these be on top of them, to know if your marketing is working.
Conversions
We need to know exactly what percentage of our leads you convert to paying customers. Again most business owners when asked wildly overestimate just how good they are at closing their leads. If we know the number it gives us the opportunity to greatly improve that number and figure out why so many slip through our fingers.
Average Transaction Value
We work this out by taking the total value of all transactions and dividing it by the total number of transactions. This allows us to figure out on a first transaction basis what a new client is worth.
Average Purchase Frequency
We need to figure out how often a customer is buying from us. Are they one and done or do they keep coming back or not? If they do how often are they doing that.
Customer Lifetime Value
We need to figure out how long they will buy from us and what’s that worth in total. If we know this on average we can figure out just what the average customer will be worth to us. That allows us to think about our customers’ value in the long term, not just about the first transaction.
There is one other number that we should track that is Allowable Cost for Client Acquisition… But I think I will save that for a post all to itself.
For now, the question we should be asking ourselves is are we on top of our numbers?
If you are then you should be well on your way to dominating your industry and crushing your competition.
If you like this idea and want someplace to start you might like to start HERE.