Measuring Up! PART 2
𝗠𝗲𝗮𝘀𝘂𝗿𝗶𝗻𝗴 𝗨𝗽! *𝗣𝗔𝗥𝗧 𝗧𝗪𝗢* Since we know how much you 𝘭𝘰𝘷𝘦𝘥 talking about Performance Metrics and KPIs yesterday, we will share a couple more today that relate to Expenses & Marketing. 🤩
Let’s start by discussing the dreaded metric- your 𝗘𝘅𝗽𝗲𝗻𝘀𝗲𝘀. When it comes to this metric, you want to evaluate your actual vs. your budgeted expenses on a regular and timely bases. We suggest using a 3-month rolling timeframe due to monthly fluctuations and bulk orders .
As you run your business it will be important to keep your expenses in line with your budget (hopefully they are!) and adjust accordingly. Evaluating your expense metrics frequently will help you to regulate cashflows and guide future buying decisions. Moreover, by keeping a close record of this metic you can catch expanding expenses early and promptly investigate.
You should definitely have a line item in your expense budget for marketing efforts, and you will want to track it along with certain 𝗠𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴 𝗦𝘁𝗮𝘁𝗶𝘀𝘁𝗶𝗰𝘀 . Marketing data mostly comes from social media platforms (FB, Insta, YouTube) and google analytics. You should track the number of likes, follows, shares, views, and comments received on your social accounts as well as activity generated from your website and google listing. You want to assess engagement levels and growth rates, but most importantly- Lead Generation!
Keeping meticulous track of your lead sources is vitally important to understanding which marketing tactics are working. By tying your lead metrics to your Marketing expenses, you can then determine your Marketing ROI.
Marketing ROI is a crucial KPI that reveals the success rate of your marketing efforts. You measure your marketing ROI by calculating: (Attributable Sales Growth – Marketing Cost) / Marketing Cost.
For example, if you spend $500 on an ad that brings in 5 clients clamoring for your $1000 laser treatment, you will have: (5000-500)/500 = 9. This represents a 9:1 Marketing ROI ratio which is very strong! Anything over 5:1 is considered good.
Develop a game plan NOW for expense review and marketing ROI analysis, and stay tuned for Part 3!