The foundation of a growing company is having accurate and up to date financials that give you a clear picture of what’s happening in your business. From setting up your accounting system to accurately tracking your numbers to developing key metrics to help you measure the effectiveness of your business decisions, Roper Accounting Group can help you each step of the way.
While many business owners talk about running their businesses on “gut” and “instinct,” truly successful entrepreneurs rely on data to know how their business is doing. They use data to learn how they can improve tomorrow, next week, and next month. They’re setting goals and defining performance metrics – using those goals to drive their winning strategies.
Business owners who succeed in meeting their goals have one common thread: They all track their progress toward their goals. And, to do that well, they need to know what metrics and data they should track to realistically measure performance and what they can safely ignore. If you’re looking to grow or expand your business, there are plenty of metrics you can track and consider.
Where to Start?
There are many way to track your progress but this week we will touch on one big one. Customer Referrals!
1. Referrals
For most businesses, their best source of new business is from referrals from existing customers.
Referred customers are 18% more likely to remain your customers. After all, they were referred by someone who already knows them, so the odds of referrals liking and staying loyal to your small business are much higher.
I’m sure you’ve told your friends about the last great meal you had, or about a new online service that’s saving you a ton of time. Done right, this type of marketing is nearly free and more powerful than any advertisement, so it’s worth tracking if you can.
Find out who is referring your product and why they think it’s great. Use that data to build things that customers want. You can also use the percentage of new customers who come to you from referrals as a measure of how good your overall customer experience is. If referrals start dropping, perhaps something in your product or store isn’t quite right.
Are customer referrals really that important? Here are a few numbers that might change your mind.
- Customers are 4x more likely to buy when they have a recommendation from a friend (Nielsen).
- You can expect 16% more profits from customers who have been referred to a business. (HBR)
- 64% of marketing executives said that word-of-mouth recommendations were the most effective form of marketing. However, only 6% of executives say that they’ve mastered it. (Forbes)
At Roper Accounting Group, we love referrals! Founded in 1992, we support hundreds of businesses nationwide with customized accounting and business solutions. Give us a call today! We are here to help you grow your business!