[dirt diggler]

Grumpy - something you said (you've said it before but this time I perked up)

you know from your mailings approx. how many leads you'll generate, how many leads turn to closings, etc --- ultimately a decent idea of what you'll make in a year


that's impressive. I think to some degree it's possible to be able to forecast - if not come close to predicting your future.

and, it shows some good business skills - and you're right, can't make real decisions without numbers.





I'm just asking if you could (or anyone else who comes by this - I'm just singling out Grumpy cuz he was the one the perk this) elaborate on how you do determine these figures.


I'm assuming it begins with detailed record keeping ... but elaborate on that


pretty please

[PressurePros]

Time and meticulous tracking of all your leads (ie where did they come from and what campaigns where effective)

My numbers dictate .5%-4% marketing response rate with a 50% closing ratio on new business.

[dirt diggler]

that's nice and all Ken jk

but how did you arrive at your numbers ....

that's what i meant by the thread

[PressurePros]

I do realize what you meant, I wasn't concise enough in my answer. I didn't want to assume you knew how to track but at the same time I didn't want to offend you by spewing the basics. I often read how you "skim" threads so I didn't want you to fade out on me. I'm going to say the exact thing I said above but in more detail.

Lets take a 1000 card mailer. I have the right audience targeted. You can determine that in one of two ways. Either previous success rate which is obviously more concise or by using national averages. Lets use the latter since I am assuming you haven't launched many campaigns and that will be more relevant here. I am also assuming all other variables as consistent ie. you had your card designed and written correctly with appropriate calls to action, you targeted the right demographic etc..

The national average for a targeted campaign for contractors may yield anywhere from .5% to 2% call rate. I know my numbers better because I track my marketing campaigns very carefuly. But, using averages, on the above campaign I can expect anywhere from 5-20 calls. (Ask every single person how they found you so you can begin compiling data)

Put the information into a spread sheet. Use formulas to figure out your exact return. That part is not rocket science.. in this example, 10 calls would be a return of 1%. You can then apply your closing ratio..again mine is about 50% so it would be 5 jobs. Multiply that by my average sale and determine that this campaign will yield $X dollars.

As you get more advanced you will know that Postcard Mailer Campaign #3 (for me decks) launched to mailing list #2 yields 3.2%-3.8% return on average. Business is all about knowing your numbers as I'm sure you know well.

[dirt diggler]

kewl!


ken i do skim things --- but usually if i said i skimmed it, im coming back to it eventually in depth


im a sponge

[POOLMANinCT]

pulling 11% calls of direct mail, very segmented market data

selling about 4%

[Grumpy]

Let's talk about the past because it will help you predict the future during an average year. OK so... Last year you spent $10,000 on advertising. You got 1,000 leads. Your cost per lead was $10. Of those 1,000 leads you generated 250 sales. Your closing ratio is 25%.

If you know your average job value and average profit per job you can then take the above numbers and reverse them to predict your earnings. I know if I spend $15,000 I should get roughly 1,500 leads and 375 sales. There is more to it than just this, the laws of diminishing returns comes into play... but you get the idea.

Assuming you don't change much about your advertising methods, pricing structure or what makes your company unique, you can predict your future to reasonable accuracy.

I track all my data between various spreadsheets and databases. Whena new lead comes into the office is is placed into a database. When the job is sold it is placed into a spreadsheet. When the commission to the saleman is paid the spreadsheet is updated. All money data is tracked in quickbooks. So by examining data between the various databases and spreadsheets I can compile numbers and see what's what.

If you do not track your numbers you can not predict anything. Sure you can guess, but that's it. Really all I am doing is making educated guesses on historic data... and if it's not an average year throw your predictions out the window. You can always throw out your projections, adjust and start over as circumstances change. If your cost per lead suddenly goes up, or your closing ratio goes down... you can still use the numbers to make predictions and thus seel how you much adjust accordingly. The formula is still the same.

[dirt diggler]

ah - kewl! good stuff Grumpy

[DamionR]

Here's an example of one report that we use.

Of course.. you need to track your data each day... and compile it throug ha spreadsheet or a database.

But this shows you are final marketing report for a quarter. We track the following:

Source - Name of the marketign source

$ Sold - The total gross volume of sales from that lead source

Cost - OUr cost for that lead source for the quarter

% Gen - Shwos the % of the gross the cost for the lead source was

# leads - the number of leads generated from that source

Sold - the number of sales generated from that source

Quoted - the number of quoted jobs from that source

Can/CD - the number of cancelled contracts or credit denials

Sits - this is the number of potential leads we could have quoted. We do not count leads that are not our type of work against our closing numbers.

% close - our closing percentage - the number of sales divided by the nubmer of sits.

dead - the number of "dead" leads from that source

% dead - % of total leads generated from that source that we consider "dead" leads

no dispo - number of leads we do not have an answer on from the salespeople

Not Ran - number of leads that we did not run... for internal purposes.


Hope this helps!

[Dave Mac]

this is one of the best threads i have seen in a long time, i just started doing this type of tracking, and it really helps you understand buisness, imo, and it is very easy to set up as well, i crosssed some imaginary line and moved up a level when i started doing this type of tracking, along with this tracking make sure you track every penny to every job

dave mac

[ultimatetouch]

Originally Posted by DamionR

Here's an example of one report that we use.

Of course.. you need to track your data each day... and compile it throug ha spreadsheet or a database.

But this shows you are final marketing report for a quarter. We track the following:

Source - Name of the marketign source

$ Sold - The total gross volume of sales from that lead source

Cost - OUr cost for that lead source for the quarter

% Gen - Shwos the % of the gross the cost for the lead source was

# leads - the number of leads generated from that source

Sold - the number of sales generated from that source

Quoted - the number of quoted jobs from that source

Can/CD - the number of cancelled contracts or credit denials

Sits - this is the number of potential leads we could have quoted. We do not count leads that are not our type of work against our closing numbers.

% close - our closing percentage - the number of sales divided by the nubmer of sits.

dead - the number of "dead" leads from that source

% dead - % of total leads generated from that source that we consider "dead" leads

no dispo - number of leads we do not have an answer on from the salespeople

Not Ran - number of leads that we did not run... for internal purposes.


Hope this helps!

This is what I have been looking to do. Thanks...now the report you attached is the compiled quarterly report. Do you just do it day to day per lead source as you get leads and at the end of the quarter do a new spreadsheet by plugging in the numbers. I know this sounds stupid but when I look at a spread sheet I just go the other way. I gotta sit down and start doing it religously.

[DamionR]

absolutely. This report is jsut a compilation of the data.

We use a database for our day-to-day work. One of the reports from the database is this quarterly report. We put in the data ranges... it calculates the data... and shows the results. I copied it to a spreadsheet so everyone could view it.

[Grumpy]

Originally Posted by DamionR

Here's an example of one report that we use.

I didn't download the spreadsheet but enlighten me. Do you track all your company data in one spreadsheet or do you use a database program, if so which one? I am havintg a hard time finding a multi-user CRM solution for tracking company wide data and allowing multiple sales reps to log in and check/update lead status.

At the closing of each month I post a one page report showing year to date totals broken down by month and sales rep. As far as tracking marketing data, which services are doing better than others, I feel the general employee has no need to know this.

I don't get as detailed as damien. As I said I track all customer data then assign similiar "classes"

shrink= a contact was made but no estimate written for what ever reason, either we were never able to make an appointment or it wasn't anything we could provide.

dead= estimate was written but the customer hired someone else or decided to hold off indefinetly.

pending= not sold yet.

Sold

Completed= a job is not considered completed until paid in full.

Bad debt= job was completed but for what ever reason we had major problems collecting.

[Thewoodman]

Hey Grumpy

I was glad to see you posting again. It has been a while since I have read your sound advice. Some of your past posts have really motivated me. T hanks man.

Mark

[DamionR]

Grumpy...

After over $100K (and un-met promises and a lot of error on part ) in worthless databases... we went with a custom-made database built around our business. Complete pain in the ass if you want to get thigns to work right - but beutiful when you get the results. You truly have to have your business organized to make them work.

For what you're mentioning, Goldmine might be a good solution. They have the indiviaul version (more like a contact management program).. the corporate version... and an e-Goldmine module where you can log into it from anywhere you have an internet connection. Good for salesguys that cover large territories... or if you trvel a good bit and need access.

[mahlere]

Dirt,

the only thing we also do, and i don't know if it was mentioned here, is assign every ad campaign a distinct tracking number.

1 number per campaign. for example.

2006 yellow page ad in book 1 is #1
2006 yellow page ad in book 2 is #2
spring direct mail is #3
2007 yellow page ad in book 1 is #4
etc.

when you get a call, simply ask the caller what the number is in the top right corner (or wherever you put it- always put it in the same place)

this way you can easily get the marketing piece they are using. You'd be surprised how many people use phone books from 2-3 yrs ago.

[PressurePros]

Originally Posted by mahlere

You'd be surprised how many people use phone books from 2-3 yrs ago.

So true and if you think about, its a smart practice. You know right off the bat you are getting someone with experience and may actually be around the following year if you call them back.

[mahlere]

amazing...a thread about growing your business at your lesiure, profitably, etc, and it get's buried...no wonder so many people on this board are begging for work....

[Grumpy]

Good to be back woodman.

Originally Posted by DamionR

Grumpy...

After over $100K (and un-met promises and a lot of error on part ) in worthless databases... we went with a custom-made database built around our business.

Amen to that! That's part of the problem. I haven't found anything specific to my business. I started building one but really ran out of time. I tried to pay someone to finish it for me but to be honest I felt the asking price was unjustifillably high.

So I am stuck using a cluster of databases and spreadsheets, which get the job done but there has to be something better. Egoldmine is interesting, I didn't know they had an online model. I looked into quite a few such as salesforce and seibel but am not keen on the fact that I am now reliant on a 3rd party and if they raise their price or go out of business I am screwed. In essence they have me by the short hairs once I commit to their subscription absed service.

I'd be more likley to buy a database program which I can host on my own server, even if it costs me more. And I looked into a few of these however I am still left with actually building the database, when you buy these porgrams all they give you is the raw database. I still have to design it.

If I want to grow my business I have to pull the trigger on something and stop worry about the what-if's and maybes.