Where do your customers come from?

My friend Perry for years was the envy of many.  His business increased steadily and he appeared to live on easy street.  Slow sales were something that he heard others talk about, not something that he experienced personally.  He seemed to have the touch of King Midas.  Everything that he touched in his business prospered and turned to gold.  Then something changed.  He didn’t know what it was at first. In fact he didn’t even realize that something had happened right away.  As the weeks went by he realized that his bank deposits weren’t what they once were.  Then he noticed that although his business had grown steadily for years, those days were in the past and now for the last several months his business was moving in the wrong direction.  What happened?  What to do about it?  The fact that Perry could have seen this coming was irrelevant now.  What Perry wanted most right now was to know how to generate growth in his business again.

Where do your customers come to your business from?As it turns out, Perry was flying blind in his business.  Sure, he knew what his sales were and what was selling, but he only had a general idea of where his customers were coming from.  Knowing that his customers were coming from Google is important, but without knowing which phrases they were using to find his website, he was flying blind.  Knowing exactly where your customers come from is essential to being able to proactively guide your business forward.

Why it matters

How can you build on your momentum unless you know where to direct your efforts?  If you know what is working for you right now, then it becomes easy to simply invest more of your time and money into what’s already working.  This isn’t about trying some new thing to see if it might work, this is about doing more of what is already working.

Sometimes things change and your sales figures move in the wrong direction.  You have a choice – you can either keep doing the same thing you’ve been doing and hope for things to get better, or you can adapt to the changes around you and grow.  Adapting successfully to changing conditions is about reacting quickly and intelligently.  The ability to react quickly comes from regularly and frequently reviewing your business performance numbers, including where your customers are coming from.  The ability to react intelligently comes from having accurate information about how your business is doing and why.  Knowing that the number of customers that you get from Google who were searching for “whiz bang widget” is down provides you with much more intelligent choices than simply knowing that your new customer numbers are down but not knowing any more details.

Identifying where your customers come from

Let’s take a look at four different ways of identifying where your customers are coming from.  What matters most is that you collect the information and review it regularly.  How you collect it is all about what works best for you.

  • Direct Response Advertising – this is about measuring the response to each of your advertisements so that you know which yellow pages ad brings in customers and how many it brings in.  It is about knowing exactly what the customer response is to each of your newspaper ads, your Facebook ads, your Google ads, etc.
  • Web Analytics – this is about measuring your sources of traffic and how they behave on your website.  Just because you get a lot of traffic from a source doesn’t mean it is high quality traffic that is interested in what you have to offer.  When you get sales, leads, sign-ups, etc. from your website, where did those people come to your website from?  Good website analytics is essential to providing you with this kind of actionable information.
  • Ask – this is about asking people who come into your store or call you when you don’t have any other way of knowing how they found you or where they got your number.
  • Survey – this is about asking your current customers or the people already on your list how they found you.  Not all of them will remember or take the time to respond, but if you have a lot of people on your list, this can give you powerful insights into how they came to find you.  Keep your survey short, let them know why you are asking them to fill out your survey, and provide them with an incentive for completing the survey.

Had Perry known exactly where his customers came from, his reaction time would have been much faster to changing conditions in his business environment.  The best time to discover where you’re customers are coming from is right now.  Waiting until later is not a good idea.  Where do your customers come from?  How can you build momentum in your business by investing more time and energy into what’s already working for you?

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