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As you may have read in this updated blog post, harnessing the power of data is vital if you want your business to succeed. You can’t just wing it and expect that your business is going to flourish. You need to rely on the numbers to help you make decisions.
There is no such thing as too much data
Let’s pretend for a minute that you have a mobile car detailing business. You have a website and a social media presence, and you buy advertising at local events. You need to develop methods of determining how effective your promotion methods are.
Collecting data from your website is super easy. There are all kinds of tools, some of which are free, like Google Analytics, that you can use to monitor the behavior of people visiting your site. You can see, for example, how many people are going to your order page. After you determine how many people are hitting your order page, you can then figure out the number of people who place an order to get their car detailed.
A simple way to track social media and local advertising is by giving people a promo code. You could give social media users one promo code for, let’s say, 5% off and another code for the people who see your advertisement at the local Little League game. It’s easy to see how many people are using the promo codes, and from there, you can determine how effective the advertising you’re doing is.
Follow closely the average purchase price
So, let’s keep going with the mobile car detailing company. If you’re selling only the basic package, that could be a problem. How do you know the number of people who are buying the basic package compared to those who buy the whole VIP treatment for their car? An easy method is to monitor the average purchase price or the amount for the average transaction.
Your goal should be to upsell as much as possible to your customers. You should have add-ons that you can push with each sale in hopes of squeezing out just a little more money from them. If you’re not getting these extra little morsels of money, you need to figure out why. Are you not convincing people hard enough that it’s important that you use the good stuff in the interior so their dashboard doesn’t crack from being beaten every day by the sunlight?
You’re not going to be able to sell add-ons to every customer; however, it’s those little golden nuggets that will bring up your average purchase price. If you can raise it by 10%, just think of how much more money that will add to your yearly revenue.
Repeat customers are your bread and butter
What’s the most important thing that will make or break your business? It’s repeat customers. You need to track what percentage of your customers are repeat buyers. If you’re noticing a low number of repeat customers, you need to ask yourself why that is. If you’re providing a service that people regularly need, you have to assume that your customers are going elsewhere.
You’re not going to have a 100% retention rate when it comes to return customers. If you’re offering a service people can do themselves, some will choose to do it to save money or out of necessity. If you’re seeing the same names and faces repeatedly, pat yourself on the back because you’re doing something right. If you are seeing a high turnover rate and people aren’t coming back, you need to figure out what the problem is.
A quick way to get some feedback from customers is to offer them a survey. No one likes filling out surveys, so one of the ways you can sweeten the deal is to offer the customer a discount if they fill out the survey. You’ll gain valuable insight from the information the customer gives you, and you will get another repeat customer because they’ll want to use their discount code.
Conclusion
Every business decision that you make should be backed by data. Tracking and analyzing data these days is super easy with the help of online tools and spreadsheets. The data you collect will help you determine what the next move should be for your business. Anytime you decide to wing it in the world of business, you’re asking for failure.
