Measure What Counts
“Hi Simon, this is Alex from Oakland. We try to measure the team progress every week, as you say, but it’s a mess. Guess we have way too many KPIs that we track, and maybe not even the most relevant ones. In an ideal world, which KPIs should we track? (as simply as possible, please!)”
“It’s much easier now to set up a program and compete.” – Simon Severino
“How much does it cost to acquire the customer, how much does it cost to fulfill, and what is the lifetime value of the customer?” – Simon Severino
Start managing what counts.
Measuring what counts.
I was talking to a brilliant team last week, one of the most acclaimed training companies around. They are really the benchmark for a teaching and training consultants.
They asked me, “Simon, how can I improve my marketing?”
I replied, “How much do you spend on marketing and what are your sources?”
They had mainly one source. And they spend a considerable amount of money per month.
But they didn’t know the conversion rate from source to leads, or from leads to prospects, or from prospects to clients.
They may be brilliant now, but they won’t stay brilliant and be the benchmark for very long if they don’t get this system up and running.
Because the times, they are changing.
Even if they have no competition from the online world yet, doesn’t mean it won’t change.
It’s much easier now to set up a program and to compete with them.
We are working on how to track exactly the sources and the conversion rates to leads to prospects into clients. There are a couple of metrics to take into considerations.
VPL – Value per lead
CPL – Cost per lead
VPA – Value per Action
CPC – Cost per Conversion
LTV – Lifetime Value
They basically tell you how much it costs to acquire a customer, how much it costs for you to fulfill that need, and what the lifetime value is of a customer.
Once you have these metrics in order, then you can start to manage and really improve the parts of your business.
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