Growth is great for business, but unsustainable growth can backfire. Greater revenue requires more marketing outreach, which means bigger expenses, potentially cutting into your profit margin if your costs outpace your income. Seventy percent of companies scale up too fast, a mistake that causes 74 percent of tech startups to fail, a study by Berkeley and Stanford researchers found. Two-thirds of the fastest growing startups lose momentum within five to eight years and shrink, go out of business or get sold for a loss, the Kauffmann Foundation reports.
In order to sustain profitable growth, it’s essential to implement agile growth strategies to keep your costs down as your business scales up. Here are three winning strategies you can implement to keep your expenses low and your profits high.
Implementing Analytics
To make sure your revenue stays ahead of your expenses, it’s essential to have accurate revenue predictions. The key to accurate revenue estimates is basing your numbers on hard data rather than guesswork. Implementing analytics can enable you to do this.
Website analytics is one cornerstone of effective analytics. Tools such as Google Analytics can tell you how much traffic you’re getting to your site, which has a direct relation to the number of e-commerce sales you can expect to make.
Advanced Google Analytics features can provide other useful information, says Your Design Online. For example, the Behavior Flow feature lets you study how users behave after landing on your page, telling you how they navigate your pages and engage with your site. The User ID feature lets you see which devices individuals and whether users with different devices are behaving differently. The Enhanced E-commerce feature lets you analyze your entire sales funnel to see which stages need improvement to optimize your sales process.
Tracking Lead Conversions
One vital part of your sales funnel to track and optimize is your lead conversion rate. Your revenue is a function of your volume of site visits times the conversion rate per visit times your average revenue per sale. Improving any of these numbers will increase the efficiency of your sales funnel and boost your revenue.
One way you can boost your lead conversion rate is by making sure visitors see your value proposition early and often when they land on your site. To do this, identify places on your site where you’re getting high user engagement. This can include places where users are taking actions such as subscribing, downloading or purchasing additional features. Highlighting your value proposition at these points in your users’ navigational path can increase your lead conversions.
Using CRM Effectively
Another way to increase your conversion rates is by using customer relationship management (CRM) tools to deliver more personalized offers, as well as personal follow-ups to website visits via text, email and phone. Seventy-three percent of e-commerce customers say they engage more with sites that deliver a personalized experience, and 53 percent agree it increases their likelihood to convert, The Commerce Shop says.
CRM tools that integrate with your website and your software can help you deliver a more personalized experience. For instance, virtual office software that integrates with popular CRM programs such as Salesforce enables you to automate the process of scheduling and conducting meetings with hot prospects who have been identified by your CRM analytics tools as most likely to buy from you. This increases the efficiency of your sales efforts, yielding a better conversion rate per sales touch and thereby improving your agility.
