I love information.
I have little post-it notes everywhere on my desk. I keep all kinds of notes in my bullet journal. I love to save stuff to Diigo and Evernote. Oh and then there’s Pinterest. Don’t forget white boards, cork boards, journals… you get the idea.
But saving information, while useful, might not be getting us anywhere.
Out of sight, out of mind… right? Right!
We need to actually be using the information in order for it to be of value. More importantly we need to be looking at the right information!
Granted, not every kind of information is useful for building your business, but there are certain bits that can give you a leg up on the competition.
If you want to build a successful business, you need to know where you’re at and where you are going… how else will you know that you’ve succeeded?
3 Things You Should Be Tracking For Your Online Business
Management means operations, employees, inventory control, etc. all the things you do to keep your business humming along creating products and services.
Money means cash flow, revenue, sales, expenses, etc. basically anything related to taking in or sending out money.
Marketing means all of the things you do to attract customers, keep customers, makes sales, convert new buyers, generate traffic to your web site or store, and all of the things you do to communicate who you are and what you do – your brand.
How you decide to track information is up to you and will be determined by your business model. I track some information digitally and some manually. Your personal style and your brain will let you know what works for you.
I am a visual person so I like to see information out in front of me; if I store it all in the computer I regularly fail to look at it. Important information is either done manually or printed off and kept up on the wall where I can see it.
Whatever methods you use, information is your friend and your best chance at success.
What Should You Look At
There are countless ways to get data but more is not always better. Your business is unique and the important bits of data that tell you the most about how your business is doing are the bits to pay attention to.
While it might be interesting to look at your daily web site traffic, the more important bit of information might be whether or not the visitors bought anything. Yes, traffic is important, but if it doesn’t convert to a sale, then it becomes meaningless. In this case, tracking conversions is a far better measure of your business climate.
More importantly, at a glance, the conversion number will tell you whether or not you need to change something, test something, or ditch something altogether.
Another often-misunderstood bit of information is revenue or sales. No matter the size of your revenue or sales number, it is a meaningless measurement if you are not also tracking profit. Profit is the money you get to keep, that’s the number that measures success.
If your business generates $200,000 in sales and revenue for the month of May but your expenses and cost of goods sold is $200,020, you’ve lost money. You might be moving a lot of inventory but if you aren’t making a profit on that inventory, you are failing.
Tracking the right bits of information really does matter.
How To Find The Right Information To Track
The two examples of tracking conversions vs. traffic and profit vs. revenue should give you an idea of where you should be looking for data.
Start with each area: management, money, and marketing. Break each down into relevant functions and then begin to look at how each function can improve your business. You might need to be looking at inventory turnover, or inventory loss. You might need to track why customers are leaving or are not making a second purchase. Perhaps you need to track whether or not the copy on your website is converting and begin testing changes.
The best question to ask when determining what information is important is this: What information will best give me a picture of where I need to focus my energies?
And when you’ve got an answer… question that answer.
If I’m selling iPhone screen replacements, I might want to track how often an inquiry turns into a sale. You will want to know how many replacement screens you have in stock so that you don’t run out of inventory when someone is calling to get repair work done.
You will want to track cost of screens and your sale price to determine whether or not you are making a sufficient profit on each sale. You might want to track where customers are coming from. It doesn’t make sense to spend hours writing blog content if all of your customers come from Facebook ads. And which ads are converting the best if you are running more than one ad?
While most of us know we should be tracking data regularly, we rarely do. We generally take a glance, once in a while, and assume that checking once gives us a picture of the health of our business. Not so.
If you want to know if your business is making real money, is ready to grow, and has the right marketing strategies in place, you’re going to have to start tracking data.
It doesn’t have to be hard or overwhelming. You may find you only need a few key indicators or bits of data to tell you whether or not you are making money or losing money. Losing money doesn’t mean you’re a failure, it simply means that you now know what might have gone wrong so you can get to work fixing it.
Information is good. Too much information is bad. Just the right amount of information is the key to success!