As a small business owner, you’ve likely had to accept that stretching your marketing dollar just goes with the territory. After all, your business doesn’t have the deep pockets, vast resources or manpower of your larger competitors. To make sure you’re maximizing returns, you must be able to track the success or failure of a given marketing initiative. So, how does a small business track its marketing performance? Well, the method that makes it possible is to use marketing key performance indicators or more commonly referred to as marketing KPI. We’ll look at 5 simple key performance indicators for small business marketing.
KPI are used by all kinds of companies in all kinds of industries. The main purpose is to measure performance via essential key indicators. It’s these indicators that determine the company’s overall success in managing its business. Key performance indicators help companies gauge whether an approach is working, or whether it’s missing the mark. To keep this post as simple as possible, I’ve included a list of 5 simple key performance indicators for small business marketing and have included links to articles on that provides further insight into how to benefit from these approaches. 1. Increasing Market Share Increasing market share is an essential aspect of growing a business. However, it’s not enough to just determine existing market share. What’s ultimately needed is for the small business to be able to forecast its future market share. Therefore, the first marketing KPI is based on the small business enacting plans to increase its share of the market. This requires determining current market share and then accounting for the market, or industry’s, growth in the company’s future market share projections. To read more about the steps needed in forecasting market share, read:Importance of Forecasting Market Share in a Growing Market 2. Reducing the Costs of Customers No matter how profitable your product or service is, if the costs of finding and converting potential customers into paying ones is too high, then your business will lose. An essential marketing KPI is reducing the company’s costs of finding and converting customers into paying ones. What is your company’s cost of customer? How much does your company spend to locate and convert potential customers? Lower these costs and your company will increase its gross profit. To read more about reducing the cost of finding customers, read Does Your Business Know How Much it Costs to Get a New Customer?
3. Leveling Out the Ratio of Qualified versus Unqualified Leads If your marketing plans are producing too many unqualified leads, then it’s a guarantee those plans are missing the mark. If that’s the case, then your sales team is wasting its time. Worse yet, you’ve likely not taken the time to determine what a qualified lead is versus and unqualified lead. An essential marketing KPI is to reduce the incidence of unqualified leads resulting from your marketing strategies. Reduce this and your sales team will spend more time pursuing customers who are more likely to place orders. To read about the importance of qualified versus unqualified leads, please read Why Are Qualified Leads Important in Marketing & Sales?
4. Tracking the Results of a Given Marketing Initiative Increasing marketing ROI (return on investment) is predicated on finding the most costeffective and efficient method of finding customers. To do that, your small business must track the results of a given marketing initiative. In this sense, it’s about measuring the KPI along multiple marketing approaches and systematically eliminating those approaches that don’t produce results. Take the time to measure each and every initiative relative to how many actual customers they bring in.
5. Tracking Your Marketing Budget
One can’t discuss small business marketing key performance indicators unless your small business has the mechanisms in place to track your marketing expenditures. Regardless of how little your company spends on marketing, it’s still essential to track those expenditures with a marketing budget. After all, there’s little to no way you’ll be able to determine the most cost-effective marketing approach if you don’t first take the time to establish your marketing budget.
Definition of 'Silo Mentality'
An attitude found in some organizations that occurs when several departments or groups do not want to share information or knowledge with other individuals in the same company. A silo mentality reduces efficiency and can be a contributing factor to a failing corporate
Investopedia explains 'Silo Mentality'
Managers of successful firms spend a lot of their time trying to ensure that information flows freely between departments to ensure that all aspects of the company are functioning effectively. Contemporary management views suggest that the silo mentality mindset must be broken in order for employees to remain motivated and be happy to come to work. Efficient companies promote the sharing of information in an attempt to let the combination of groups function as a team.
Read more: http://www.investopedia.com/terms/s/silo-mentality.asp#ixzz1vUiYQC5e
A mind-set present in some companies when certain departments or sectors do not wish to share information with others in the same company. This type of mentality will reduce the efficiency of the overall operation, reduce morale, and may contribute to the demise of a productive company culture.