Get the Right Reports About Your Online Business
As an online business owner, you probably generate mounds and mounds of data. Over the course of 12 months, you probably generate enough invoices, plans, receipts, marketing campaigns, and other sales figures to make your head swim. When you do your yearly review, you might not know where to start. Here are some common report types you should look at:
Financial: Any business generates some form of cash flow and has a balance sheet. You definitely want to construct some form of profit-and-loss (P&L) statement to see whether you’re making money, breaking even, or losing money. You want to see how much of your revenue is eaten up by costs and whether certain costs are growing faster than others.
Customer: If you’re not keeping track of your customers, in some form or another, you really need to start. You have to see whether your customer database is growing, and in what demographics. Maybe you’re noticing numerous repeat buyers or one-time-only buyers, or maybe sales in certain product categories are picking up compared to others. You’re looking for a healthy increase in the quantity and quality of customers.
Automation tools, called customer relationship management (CRM) software, make it easy to keep up with current and prospective customers. Even as a small online business, you can use CRM tools to track your customers and their interactions with your site, associate leads or customers with specific marketing campaigns, and generally keep watch over specific customer data.
Inventory: Determine how quickly you’re sending merchandise out the door. We don’t just mean packing and shipping. If you weren’t buying new inventory, how long would it take to sell out? Are you holding on to products forever, or turning over inventory often?
You want to ensure that you have enough inventory to last until the next order comes in but not so much that you can’t get rid of it without selling at a huge discount or making a generous donation to charity.
Marketing: In the world of online marketing, many reports and data points are available to review. Get started by checking conversion rates of landing pages (or key entrance pages for your site) and conversion goals and traffic as part of your website’s analytics.
What about the e-mails you sent throughout the year? Look at reports that show the number of opens and shares of e-mails sent, and the click-through rate (CTR) of various e-mail campaigns. Run reports that show which subject lines of your e-mails were most effective.
Look at the social media and marketing campaigns you launched in the past year. How well did your Google AdWords perform? What offers got the most engagement? Who did you reach? How many people visited your site? Even more importantly, how many customers ordered something, and how many of them returned? How much did you spend to acquire your customers?
Although you can compute all sorts of ratios, your report has to be able to answer this question: “Did I make more in profit or awareness than I spent on marketing?” That’s the bottom line for a small online business:
If you’re spending $50,000 to make $10,000 extra in profit, that’s not the way to survive. Although you can spend some money to build brand awareness, most of the time you need to spend that money to generate orders and profit.
Large, established brands may have big budgets and can afford to spend money on campaigns that promote brand awareness but may not lead to direct sales. A lean online business doesn’t always have that luxury, so you must invest in marketing programs that help drive sales.