As business owners, we’re always busy at the beginning of a new month analyzing monthly reports.
We go through the things that we’ve done in the past month, analyze what worked, what didn’t, and narrow in on the things to focus on.
Every month we ask questions to ourselves, but every month, the answers keep changing.
Most business owners build some sort of reporting into their business. Many times however, this report is insufficient in providing business owners informed decisions.
Often times, this report doesn’t tell you exactly where you to focus your marketing efforts and resources to get the highest return of investment for the coming month.
Yes it’s not an easy question to answer, and it all depends on the quality and frequency of reporting.
So what can you really do? Well, here are three simple questions to prove you’re not flying bling in business.
Where is the money?
John Wanamaker, a famous marketer and advertiser once said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Born in 1838, Wannamaker simply didn’t have the tools we have today. And if you find yourself agreeing to his quote, wondering which half of your budget in marketing is working, and which is not, then you’re clearly on the wrong track.
Now you may be wondering what should be included on your tracking each month. Here are some tips to better manage your budget on marketing.
– Monthly cost per marketing channel (i.e. Google AdWords, SEO, social media, referral partners, direct mail, etc.)
– Revenue per productive/service per marketing channel
– Revenue per marketing channel
– Profit per product or service per marketing channel
– Cost to fulfill product or service
If you can see how each marketing channel provides profitability for your business, then it should already be easy for you to decide where to focus your budget and efforts in the coming month.
Where is the data?
This always sounds good in theory, but how exactly can you see the data in your business? And even if you know where to look, is the data centralized and easy to read each month?
The most common situation would be like this – marketing costs take up most of your credit card statement, while your revenue is stored in your shopping card program, while the cost of goods sold (COGS) are all saved in your computer in Excel file.
This is what makes it really difficult to calculate your profit per product in each marketing channel.
How can you centralize your marketing data?
There are two basic solutions for this one; one is through Google Spreadsheet, which is basically like a web-based MS Excel. Yes, it’s pretty basic and easy to use.
However, it’s quite surprising many businesses fail to utilize this really convenient tool. It’s a really simple too, but it does require some manual labor to get all the data from each of the different programs that you use altogether, such as Google AdWords, Google Analytics and your CRM.
For it to be effective, Google Spreadsheet must be updated and used as a centralized data sheet.
This will allow everyone in your team to track all the key metrics in one place.
The second way to do is far more elegant, which is through the use of business intelligence dashboard.
With the help of a dashboard solution, all key metrics are automatically put into one centralized report. In layman’s term, no manual labor required.
Or of course the easiest option, invest in business accountants that take care of all the data for you and produce actionable reports that allow you to grow your business better and faster.
At the end of the day if you’re not making data driven decisions for your business, you’re flying blind.