Now that we’re halfway through January it’s time to start finalizing your plans for the year. For many businesses, this is something you would have done in December, but there’s a reason why the fiscal year for a typical retail business is actually February – January vs January – December.
January is really a continuation of December and the true close-out of the year for product-based businesses.
Now, from an accounting perspective, I don’t necessarily recommend you make the switch, because it is a bit of a pain in the butt, but talk to your accountant if that’s of interest to you.
My whole point in sharing this is, is to remind you that you’re not actually behind. So if you were feeling that way, please don’t!
When I first sat down to map out this episode which was going to be about setting goals for the year I realized I’ve actually already done that here on the podcast. So instead, I’m going to build on a few different concepts we’ve discussed previously so you can get a better sense of how to take action from the information you have in front of you.
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How to Identify Which KPI to Focus on & How to Set Goals
If you haven’t already, or if you think you need a refresher then I would definitely go back and take a listen to those episodes so you have a full understanding of what we’re talking about today.
That’s where we dive into all the numbers so you figure out which growth levers you should be focusing on in your business right now. Essentially, it helps you break down all your KPIs, (key performance indicators) traffic, conversion, etc., and helps you identify which KPIs you should focus on first. Because remember. You can’t do all the things at the same time.
This is where we talk through how to break down your goals over the quarters, months, and even weeks to make them more attainable and keep your momentum going.
Today’s episode sits in the middle of these two. Once you have the numbers and you know what KPI you want to focus on, we’re going to use traffic as the example today, how do you know what the RIGHT move for your particular business at this moment is?
How to Drive Traffic to Your eCommerce Store
There are a lot of different ways to drive traffic to your store. I talk about them in episode 123.
But you can’t focus on all of them at once. I mean you COULD, but you either need a really big team to do all the work, or you’re going to do them poorly.
Instead, I want to show you how you can use the data in front of you and the characteristics of your particular business and product to choose one traffic-driving strategy to focus on first. Once you nail that down, you can move on to another one.
This is a decision tree that I created for Lounge members so if they wanted to grow their traffic, they could determine what made the most sense for them right now.
So the first question I always ask is, do you have more time or do you have more money? You rarely get fast and cheap, so if you don’t have money to invest be prepared for your growth to be slow.
What to Do if You Have More Money
First, we’ll go down the more money path.
The next question is – are you eligible to advertise on Facebook? If you are, as in you don’t sell a product like CBD, then you’ll want to look at your margin. If it’s at least 60% then great. Try Facebook Ads.
But what if your margin isn’t 60% or your product is restricted?
Then I want to know, are people searching the Internet for the type of product that you sell? If you were selling CBD then the answer is likely yes.
Okay, so we know that your margin is less than 60% and potential customers are searching the Internet for your products.
The next question becomes is your margin at least 40%?
If people are searching the internet for products and your margin is at least 40%, then Google Ads is probably a great option for you. If your margin is not at least 40%, then I would work on that before you invest any money into driving traffic.
So what happens if your margin isn’t 60% and it’s not a product that people search for on the Internet? In that case, I recommend you focus on Influencer marketing.
What to Do if You Have More Time
Now let’s go down the time path. If you don’t have money to invest in advertising or Influencer marketing, then what?
First I want to look at your repeat customer rate. Is it at least 20%. That’s the average for a typical eCommerce store. If you are at 20%, then I want to know if people are searching the internet for a product like yours. If they are, then focus on SEO & Google Shopping, which you can get started with for free.
If they’re not searching the Internet for your products, then I recommend focusing on Social Media & Collaborations.
But what if your customer return rate isn’t 20%? First I want to know if your product is consumable. If it is, that means you have a built-in opportunity for repeat business but you’re not quite hitting the mark yet. In that case, focus on email marketing.
What if your product isn’t consumable, but you have a wide enough assortment that customers still tend to shop with you at least once every 90 days? In that case, also email marketing.
If neither of those is true, it’s not consumable and your customers don’t shop with you all that often, then we’ll go back to the question of are they searching the Internet for your products. If yes, go SEO & Google Shopping, otherwise social and collaborations.
Reuse This Decision Tree at Each Stage in Your Business
Do you see how the numbers and the specifics of your business are driving the decision-making here?
And the great thing about this exercise is that the answer you get today, won’t necessarily be the same answer you get in 3-6 months from now as those variables change.
For instance, maybe you go through this exercise right now and realize you have to work on your email marketing. Once you dial that in and you get your return customer rate up to that 20% benchmark, then you can focus on your SEO or collaborations next time.
Once you make your way through the organic options, maybe you start to generate enough revenue that now you can revisit this process but go down the paid path.
My goal for you is to focus your energy on the thing that makes sense for your business TODAY. To be intentional in the things that you do and not choose something because it sounds cool or sexy.
I can’t remember which episode it was but I know recently I talked about how I often see entrepreneurs get FOMO when they see another business doing something, or they hear about some specific strategy, even sometimes when they hear me talk about it on the podcast. But not every strategy is right for every business at any given time.
I hope this has given you a little glimpse into how you can start analyzing your own business to decide what makes the most sense for you right now.