- Do you take the time every January to evaluate your business the previous year?
- Do you know where your customers come from?
- What did you do to acquire them?
- Which referral type has the highest Net Profit?
- What information did I learn from last year that I can use to improve this year?
Every January, I take the time to go through my accounting software and see what worked and what did not. I can then make this year’s changes based on facts from the previous year.
Allow me to share this process with you to decide if you want to do this for your business if you are not already.
How did your customers find you?
This is the question I ask EVERY new customer. For me, it is in the first conversation. I straight-out ask, “How did you find me?”. I then record that answer in my accounting software file for that customer. I want to know what business generating activities I am doing that are working. If something is not working, I stop doing that activity and do more of the top-producing activity. Here are the activities that I am tracking (you might have different ones):
- Networking: this can be Online or in person. These are things like networking groups, chamber events, association meetings, and something that I do in the community that puts me in front of general people.
- Referrals are direct referrals from customers or other people I know.
- Internet: My website, search engine optimization, Online listings, reviews, etc. Any activity on the Internet.
- Social Media: I separated this from the Internet because it has its own set of activities. This is time and interaction on any social media platform.
- Existing Customers: for me, these are existing customers who want a refresh of their website that I already created in the past. They can also be existing customers that want a different website.
Looking at the pie chart above, you can see that Networking is the winner for how my customers found me in 2021.
- Networking 40%
- Referrals 30%
- Internet 25%
- Existing Customers 4%
- Social Media 1%
Looking at these numbers, one might think I could drop existing customers (I would NEVER do that) and social media. But this is not the whole picture. Let’s look at a few more data items.
What Networking worked?
The pie chart below clarifies what networking groups I need to continue. But here is the MAGIC of networking, some of these groups I have not actively participated in for years. Here is the breakdown: