How do you measure the success of your business? Not all businesses, and not all sales are created equal. The good news is, by utilizing some tried and true business metrics, you can easily determine if your business is struggling or headed for success. Running a business in today’s digital environment means instant access to insights and analytics that can help you get your business and sales flow on the right track, and keep it there. Here we’ve compiled some of the most important terms and what they mean for you and your digital video business.
Sales Analytics for Surefire Success
When you’re starting a new business, it’s a good idea to set some clear goals out of the gate so you know what you want to strive for. In the paragraphs below you’ll see terms in bold. These are terms you should become familiar with as they will be useful when applied to your goal setting, business and sales flow.
One important way businesses evaluate the success of your marketing and sales generation efforts is by evaluation their Return on Investment (ROI). The goal is to have a positive return on your investment, with the minimal about of financial and resource output resulting in the maximum about of return (sales, in this case). Another important success metric is growth, often expressed as Year over Year (YoY) or Month over Month (MoM) growth. Comparing sales one year with the next, or one month with the next is a way to measure ongoing performance and get a glimpse at overall growth trends.
When it comes to your sales page and shopping cart, conversion rate, or the rate at which you convert site visitors into paying customers is important but it’s not the only metric to be aware of. Take a look at your cart abandonment rate as well. How often to people reach the checkout page and abandon a purchase? Are there things you could do to improve their confidence in making the purchase, or increase their urgency to buy now?
When it comes to your customer, truth is, some customers are in fact better than others. Successful businesses love customers with high CLVs, or customer lifetime values. Why? Because it costs more to acquire a new customer than to retain an existing one. The cost of acquiring a customer is referred to as your customer acquisition cost.
Businesses strive for high average order value, and it is often easier and more cost effective to manage fewer high value clients than several low value clients. The average order total per customer and the number of purchases per customer are important metrics too. Consider finding ways to increase these values over time. This may require ongoing testing and tweaking, but will pay off over time.
Finally, take a close look at your product mix. Which videos and other digital assets are your best performing products? Are there other products that are not performing at all? Consider ways to increase the average order value with the best performing offerings. Consider repurposing or eliminating offerings if they require your time or money to maintain and are not adding value to your overall product portfolio.
Keeping a close eye on your sales analytics is one of the most important parts of running a successful business. Know what’s working, and what’s not. Reward your most valuable customers, and don’t be afraid to let some customers go if they’re costing you more time and money than they’re generating for you. Most importantly, keep testing, measuring and trying new things and you’ll continue to improve your sales process and boost your ROI.