So, at the time, I sought guidance and learnt a lot of new skills, like “Why it was important to have a profit and loss statement?” When I spoke to my accountant, he basically gave me two reasons:
- For taxation - so the government could take their share
- To help me understand what's going on in my business to ensure I was making a profit.
What I heard was that I needed to do a “profit and loss statement” for the tax man, the rest I just forgot for the next 5 years. I went on to make sales and worked really hard. And I never really looked at or read the profit & loss statement, so it was a hard lesson to accept later when I realized that I was not making a profit, nor was I building wealth.
Now there were many psychological reasons as to why I didn't hear what my accountant was telling me all those years ago. For me, the main reason was, I was afraid of measuring my own business success. I was afraid to look at what ROI marketing was telling me and what was happening to it and me. I was not open to hearing or seeing the signals that my business and marketing was telling me.
When I started REALLY reading marketing reports, my sales and profits improved. And other business owners started asking me to help them. Every entrepreneur I have spoken to is passionate about their business and has a true desire to help their customers. But it was only when I allowed myself to learn the skills of measuring, analyzing and interpreting the marketing reports, that my own business performance improved.
Marketing ROI reporting is an easy way for us to measure the Return On Investment of our marketing efforts and help us determine what’s working. Then we can focus on the tasks that make us a profit, and that makes owning and running a business, fun.
As a marketing consultant and teacher of inbound marketing, I’ve spent a lot of time teaching entrepreneurs the skills of how to measure, analyze and interpret their ROI analytics reports. I often find clients come to me for help when they need to know the answer to a marketing problem, but don’t know how to use the analytical tools. In the early days of my business I would look for marketing problems that I thought were important and I would spend hours over-analyzing things. I wasted hours and hours analyzing marketing data until I got “analysis paralysis”. And all the time the marketing ROI reports were giving me signals, I just had to be open to reading and seeing those signals.
For example, recently a new client was wanting me to break down their existing buyer persona into new groups. While a good project, when I started working with their reporting system I noticed the hidden profit that the ROI report was screaming at me that needed attention.
The marketing reports were showing me that the client had 9 landing pages on their website and were averaging 20 to 40 new leads every month. Now that’s a great performing website, but there were signals that no one was seeing. One of the landing pages had an average conversion rate of 23% while other landing pages had conversion rates of 3.2%.
After looking at the landing pages I was able to determine that the one outstanding landing page had 2 important elements that the other 8 landing pages didn’t. And by us taking the time to add these two elements to the other landing pages the client would get a huge increase in their conversion rate.
Let me break down the numbers for you. Let’s say it was costing the business $3 per click using AdWords or Facebook advertising to get a visitor to their landing pages. For the landing page with the 23% conversion rate, the cost per lead is $13.04 (100 x $3 / 23) while the other landing pages with the 3.2% conversion rate, the cost per lead is $93.75 (100 x $3 / 3.2). That is a big difference!
I personally found that when reading and looking at the marketing ROI reporting in this different way, it put more profit into my business with the least effort. It took some time for me to change my habits and master the new skills when looking at marketing reports, but it has been a profitable and rewarding for journey. So when a client wants help analyzing their marketing reports, I like to share this story with them, and quite often together we start finding a lot of hidden value and improvements in their marketing.
We have all access to powerful marketing analytical and reporting tools that are telling us what to do next, it’s just a matter of starting to see the signals and observe what the reports are telling us.
You might want to check out our free guide by downloading our ebook, "The 6 Marketing Metrics your Boss Actually Cares About".