How to Know When Your Business is Reaching New Heights
A guest article by Patrick Foster, an eCommerce entrepreneur, writer, and contributor to multiple marketing and eCommerce blogs. He gets his kicks from sharing knowledge with others in the industry. He's passionate about business, startups and all things social.
So you’ve been in business for a while, but you’re unsure about how you’re performing. Perhaps you’re feeling a little exhausted and need some reassurance that everything is going well. Or maybe you’ve been working so hard on getting your business off the ground that you feel disorientated and need to take a step back to review your work. Performance metrics and customer reviews are two key insights that will help you gauge how your business is doing. Let’s explore how you can get confirmation that your business is on track — even when you feel like it isn’t!
If your business is doing well and you’re looking to expand overseas, take a look at our previous post on how you can expand your business across international borders.
1. You’re working with your favorite brands
One of the main signs that you and your business are performing well is when you are doing business with your favorite brands. Whether your contribution to their company is big or small, it is still a fantastic achievement. For example, you could be supplying raw materials to them or contributing to their marketing mix through SEO services.
The ability to be choosy with who you accept onto your books is not only a great feeling, it also means that you can channel your interests and enthusiasm into your work, and this will show in your results.
Whether you’re supplying raw materials or are part of their marketing mix, working with a household brand is a real milestone. Why not make a long list of other businesses to pitch to? The more excited you are to work for them, the better.
2. Customers rave about your brand
Good old fashioned word-of-mouth reviews are still a fantastic way to get referrals and new business. If you deliver a great product or service to someone, chances are they will report back to their friends about it.
Customer reviews on sites such as Yell are not only a boost to your ego – they are proof that your business must be doing something right. Did you know that these digital reviews contribute toward your brand’s structured data on a SERP?
Glowing online reviews can make or break a business, or take a great business to the next level. All you need to do is set up your site with schema data to enable customer ratings on a particular product or service pages. This star rating will show up on the SERP, and may even give you a shot at getting into the coveted rich snippet box. Find out more about schema data and aggregate ratings here.
You’re smashing your metrics
As I’m sure you’re aware, your metrics are really important. Keeping track of them really helps you to see how well you are performing across a period of time and can help you make predictions and decisions for the future. Here are a few of the key metrics to be keeping a close eye on:
- Sales revenue
It’s always great when your sales revenue is rising. However, your data needs to be mined and analyzed for deeper meanings and trends. You should correlate your sales data with advertising campaigns, price changes, seasonal trends, and the cost of sales. There are more sophisticated metrics in this realm, such as asset turnover ratio, return on sales and return on assets that can tell you more about your performance, for example, how it compares to your competitors.
- Staff productivity
Unfortunately, you often need to keep a close eye on your employees to ensure that they remain productive. Discontent staff can put your business in danger, while high staff productivity can be one of your greatest assets. Productivity ratios can be applied to most aspects of your business, for example, dividing departmental revenue by the number of people in that department. From this, you can reveal what parts of your company are performing the best.
- Gross margins
Gross margins are far from gross! Your brand’s gross margin is calculated by your total sales revenue minus the cost of your goods sold, divided by the total sales revenue, and is expressed as a percentage. The higher the percentage is, the more your company is retaining on each dollar of sales and enjoying profits as a result.
- Shopping cart abandonment rate
If you’re running an online store, then your cart abandonment rate will be of the utmost importance. According to the Baymard institute, the average cart abandonment rate is 68% – if you think about it in terms of missed conversions, this is very problematic. So, how could you ensure that more of your site visits convert into sales? Fine-tuning your UX to avoid any potential barriers to purchase, providing more payment options and incorporating a progress indicator into the purchasing process are just some options for you to consider. Check out this guide for further information.
You’re making the transition from offline to online
Has your company scaled like a dream? Perhaps it’s time to step up your game from the trade fairs and a small warehouse.
Entering the world of eCommerce can help open your business to a nationwide or even international customer base. However, setting up shop online can be a complicated business. There are some questions you need to ask yourself: how will you host and manage your online store? What should your shop front look like?
Subscription services such as Shopify provide a great solution for smaller players wishing to take their first steps in the online world. These online store packages suit businesses from a range of industries, from craft stores to web design services, with a selection of templates to get you up and running quickly.
Your company culture is thriving
Another clear sign that your business is a well-oiled machine is when your company has a vibrant, inclusive and encouraging company culture. If you’re a smaller player, a simple trip to the pub on the company card can be enough to make your employees feel like they’re part of a community.
On the other end of the spectrum, corporate giants such as Chevron offer their employees health and fitness centers on site to help alleviate the stress of the work environment and to encourage a healthy lifestyle. This is also extremely beneficial to the business – healthy, happy employees produce better work and more of it. Take a look at this analysis of how other large businesses treat their employees.
If you want to know how happy your employees are, you should ask them. Anonymous surveys are a great way to gauge how your workers feel about their daily lives under your employment. The anonymity will allow them to be completely honest and will enable you to put their comments into action.
So, there you have it. Those were some of the main ways that you can tell whether your business is going up the ranks or not. Remember: tracking your performance metrics over time and keeping tabs on your customer reviews are two key insights into how well you are doing.
How is your business doing? Which of these insights has proven useful for your business? Let us know in the comments.