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Methods for Measuring Sales and Marketing Success

by Kari Oakley 9 months ago in business

Some numbers are more important than others, so it's essential to focus on which ones will help you the most. Here are three categories to track.

Small businesses have plenty of sales data to analyze. The question for the business owner is what to do with the data you have. What are the most critical numbers to analyze? What insights can you gain from the sales statistics? How can you measure them?

Some numbers are more important than others, so it's essential to focus on which ones will help you the most. Here are three categories to track.

Revenue

Of all the small business statistics you can track, revenue is the number that represents the core. Gross revenue represents the total income of your business. It is a common thread between the sales and marketing departments. Setting up e-commerce analytics software is a way to capture revenue data. It will track information that multiple departments can use:

  • Your sales department can use it to improve the customer experience.
  • The marketing team can see which landing pages customers are using.
  • The accounting department can analyze profit and costs.
  • Inventory managers can track order fulfillment.

Conversion Rate

You can break down conversion rate tracking in several ways. Comparing new visitors to returning visitors on your website will give you different insights, and it's helpful to break down the categories.

What do new customers do when they arrive at your website? What pages interest them? You already know you have just a few seconds to grab their attention, so what do they see right away? What do you look for when you're visiting a site for the first time? Most likely, you are looking for easy use and navigation so you can quickly find the information you're seeking.

You can analyze the behavior of returning customers by looking at two factors. First, why did they come back? What brought them back to your site? Second, did they make the conversion on the first visit, or do you need to try to convert them now?

Another way to analyze conversion rate is by measuring individual marketing campaigns. You can gain valuable information about a campaign and the quality of traffic to your site.

The formula for tracking conversion rates is:

  • Conversion rate = (conversions / total visitors) x 100%
  • An example is if your site had 10,000 visitors and 500 conversions, your conversion rate is 5%.
  • Several software options can help you track conversion rates. Look for lead capture, analytics, mouse tracking and experiment tools.

Return on Investment

It's a challenge to put hard numbers on the value a marketing department generates. ROI, or return on investment, measures revenue per dollar spent. ROI can help the marketing department measure how campaigns are performing because it measures the quality of leads the campaign is generating. It can be a little tricky to measure because a return on investment may not appear until much later; it can take some time for a campaign to get picked up by the target market. Depending on your product or service, you may need to look ahead several months.

You can calculate ROI by using this formula: ROI = (Sales Growth - Marketing Cost) / Marketing Cost. To get an accurate picture of how your campaign is performing, though, you'll need to take out organic sales growth. Calculate organic sales growth by checking the sales trend before the campaign started using the historical monthly average. Then alter your formula to this: ROI = (Sales Growth - Average Organic Sales Growth - Marketing Cost) / Marketing Cost.

Traffic Sources

Lots of site traffic is good; quality site traffic is better. Visitors who lead to sales are the ones your company needs. You can divide sources into three categories:

  • Direct visitors who type your URL into their browser
  • Search visitors who find your site through a search engine
  • Referral visitors who arrive at your site by way of another website or social media

Try to keep your sources diverse to avoid putting all your eggs in one basket. Analytics software can help you track source categories.

Once you have a clear picture of what sales and marketing efforts are working, you can focus your time and money on the highest performers and set yourself up for success.

business

Kari Oakley

Kari Oakley is a fitness trainer from Kenosha Wisconsin. She now lives in downtown Chicago, and loves to get out. She is a big fan of anything adventure, and loves getting a workout in the outdoors.

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