Do you agree that you can not improve something or manage it before you actually measure it? If you have your online business and want to develop it, you have to know how to measure your business performance and determine what is working and what is not.
What are the best methods of measuring your business performance? If you would like to master this process, just follow the article and find its key elements.
Firstly, you need to find out how much is your average customer worth. This is done simply by adding up how much did the customer cost you, and subtracting it from your initial revenue from a customer.
In other words, if you know that you have to pay for 100 hits at 0.24 cents each in order to generate two sales at 47 dollars each, then each of those customers costs about 12 dollars to generate. Each of those customers is worth about 35 dollars.
Do not forget about the overhead costs and payment processing, and only after you take everything into account, you will get a real number of how much money you make from each customer. After that move on and find out what is the lifetime value of each client.
This takes time, but when you find it out, you will be able to figure out what you have to do - attract new clients or increase the lifetime value of existing ones. If you have other products and services your clients can benefit from, you factor the profits of those back into the equation.
Lets say you have 2000 subscribers and you sell 200 of them your fitness exercise DVD at 100 dollars each. By doing so, you add 10 dollars to the value of these clients, and increase your value to 45 dollars.
If you commit yourself to the process of measuring your company's results, you will see that there are plenty of variables involved, though these ones will give you a general idea of the situation. Another important thing is to measure the buying motivation of your clients. It is the most valuable way of measuring your company's marketing activity as it will help you to figure out what you should do next. Buying motivation is usually measured by making your clients answer your questions and participate in surveys you conduct.
No matter how great you think your ideas are, in the end of the day only customers will decide what really works. This is the reason why it is better to find it out from them before you even start creating your product. If you understand what is every clients value and know how to make them purchase from you, you can avoid spending a fortune on your marketing and get you business to absolutely different level.
What are the best methods of measuring your business performance? If you would like to master this process, just follow the article and find its key elements.
Firstly, you need to find out how much is your average customer worth. This is done simply by adding up how much did the customer cost you, and subtracting it from your initial revenue from a customer.
In other words, if you know that you have to pay for 100 hits at 0.24 cents each in order to generate two sales at 47 dollars each, then each of those customers costs about 12 dollars to generate. Each of those customers is worth about 35 dollars.
Do not forget about the overhead costs and payment processing, and only after you take everything into account, you will get a real number of how much money you make from each customer. After that move on and find out what is the lifetime value of each client.
This takes time, but when you find it out, you will be able to figure out what you have to do - attract new clients or increase the lifetime value of existing ones. If you have other products and services your clients can benefit from, you factor the profits of those back into the equation.
Lets say you have 2000 subscribers and you sell 200 of them your fitness exercise DVD at 100 dollars each. By doing so, you add 10 dollars to the value of these clients, and increase your value to 45 dollars.
If you commit yourself to the process of measuring your company's results, you will see that there are plenty of variables involved, though these ones will give you a general idea of the situation. Another important thing is to measure the buying motivation of your clients. It is the most valuable way of measuring your company's marketing activity as it will help you to figure out what you should do next. Buying motivation is usually measured by making your clients answer your questions and participate in surveys you conduct.
No matter how great you think your ideas are, in the end of the day only customers will decide what really works. This is the reason why it is better to find it out from them before you even start creating your product. If you understand what is every clients value and know how to make them purchase from you, you can avoid spending a fortune on your marketing and get you business to absolutely different level.
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