By James Atkinson, LLB
Web Analytics - Creating Business Growth. There are basically three ways to grow any business. Making continuous improvements in these three areas is a key to exponential growth:
I am grateful to Jay Abraham for this idea. Before I show you different ways to grow your business here are some practical examples:
Most entrepreneurs grow their business in a slow, linear way – one element at a time. However, there is a better way to grow your online business. Web analytics and internet technology make it relatively straightforward to obtain exponential growth. That is, entrepreneurs can improve multiple elements of their business – at the same time.
Let’s look at lead generation as an example:
Leads per |
Conversion % |
Sales per Month |
Average Value per Sale |
Monthly Revenue |
Annual Revenue |
100 |
10 % |
10 |
$100 |
$1,000 |
$12,000 |
The following is how a linear approach increases business revenue. Let’s say you are able to increase the number of leads per month by 10% - you will get 110 leads per month.
The conversion rate remains unchanged at 10%, so you will get 11 sales per month. Annual income increases by 10% to $13,200.00.
So if you increase one variable by 10%, your revenue increases by 10%:
Leads per |
Conversion % |
Sales per Month |
Average Value per Sale |
Monthly Revenue |
Annual Revenue |
110 |
10 % |
11 |
$100 |
$1,100 |
$13,200 |
Now, what if you increased twovariables at the same? The result would be the beginning of exponential growth.
For example, if you increase the number of leads per month by 10% and the conversion rate by 10%, your annual revenue is $14,520.00 – a 21% increase. Notice how you get a little “bonus” growth!
Leads per |
Conversion % |
Sales per Month |
Average Value per Sale |
Monthly Revenue |
Annual Revenue |
110 |
11 % |
12.1 |
$100 |
$1,210 |
$14,520 |
Let’s increase three variables: the number of leads, the conversion rate, and the average value per sale by 10%.
Leads per |
Conversion % |
Sales per Month |
Average Value per Sale |
Monthly Revenue |
Annual Revenue |
110 |
11 % |
12.1 |
$110 |
$1,331 |
$15,972 |
Your yearly revenue then increases by 33% to $15,960.00!
Your bonus or dividend growth has also increased. The larger the performance improvements you can make in each area, the bigger your “bonus growth”. This is the power of exponential or compound growth.
Now, let’s say you increased three elements of your business by 25% each over the original numbers. This sort of increase is quite realistic for an eBusiness.
This would almost double your yearly income to $23,437.50!
Leads per |
Conversion % |
Sales per Month |
Average Value per Sale |
Monthly Revenue |
Annual Revenue |
125 |
12.5 % |
15.62 |
$125 |
$1,953 |
$23,437 |
Again, your bonus margin has increased. But it certainly doesn’t stop there. Once you start looking, everything can be improved:
Your revenue growth could be enormous!
The secret to exponential growth is continuously to improve performance in multiple areas and sustain the improvements. There are many weapons in your arsenal to achieve and sustain improvements. It’s not hard or complicated, but they can truly work wonders when used together to improve results.
For example, you can increase an ad click through rate from 1% to 10% - you can improve your sales letter conversion from 0.5% to 5% - you can get customers who buy twice a year to buy four times a year - you can increase the average dollar value of a sale by 15% with up-sells and cross-sells …
… the combined effect of that leverage is exponential growth!
The key is tracking testing. Online analytics allows you cheaply and easily to test everything you do in your business. Google Analytics allows you to do prodigious testing - for FREE.
The following is not an exhaustive list but once you start the process you’ll find an amazing array of ideas you can implement:
Let’s look at a few ways of increasing customers. For example, to increase lead generation you can:
To increase conversion rates:
To increase customer retention:
See:
To augment transaction values:
To increase buying frequency:
Just implementing a few of the above suggestions may help improve your profit margins and bottom line.
Jay Abraham - I can’t cite a specific reference but the idea was discussed at a business seminar I attended.
Web Analytics > Setting Up an Evidence Based Business > Test Track and Optimize > Planning and Process > Exploiting Business Metrics > Creating Business Growth > 7 Business Growth Ideas >
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