Using What Works – An Easy to Use Guide
I read a great article today by Tommy Jay titled “ How to measure marketing consulting services” that’s worth your time. So with your limited time and resources, how do you measure new customers, lifetime customer value, and time and energy saved? You need a database and an accounting system:
Database components:
- Your database does not have to be sophisticated; I recommend creating a Microsoft worksheet to track this information. You can modify easily and over time figure out what information is valuable.
- Key information:
- Customer contact information (name, address, phone, email, etc.)
- Year of acquisition
- Referred by/found by (referral from John Smith, direct mail promotion#7, internet search, etc.)
- Customer number. I believe in a five digit customer number; the first two are the year of acquisition and the last three are sequential. It’s not hard to determine that if the highest customer number in the 14000 series is 14322 that you added 322 customers this year.
- Active or inactive. This generates a periodic process where you look at the customer’s activity. Did you create 170 customers in 2010 but only 58 are still active now? This might tell you that your services/products aren’t being updated, or your customer service isn’t working, or the customers are more loyal to the salesman that’s moved on than they are to your company.
Accounting system:
You may not realize it, but it contains a wealth of valuable information. A basic QuickBooks system will allow you to track sales (by month, by category, by account). The Customer Information tab shows you every invoice to the customer. All this information is extractable to excel, so you can track the direct invoices to John Smith, then use the “referred by” field in the database to determine which other customers came to you from him, and track those customers’ invoices as an addition to the lifetime customer value.
Time and energy saved? Priceless!