All businesses do more than just make money. Unfortunately many forget this fact, and they become lost by only measuring revenue.
Revenue is, of course, not just important – it is critical for the very survival of a business. And while it is a significant reason why many people start a business or go to work, it is far from the only one.
Recent years have seen the rise of social enterprise, businesses that exist for the social or environmental good, or who are starting to put the planet before profit. Their non financial goals can be defined as Social Impact Metrics (SIMs), and are specific to each business.
Common SIMs include; the number of trees planted, amount of power saved (and amount of CO2 prevented because of that saving), quantity of waste prevented or recycled, number of people fed, etc.
Nonprofits may also have a number of different SIMs, including the number of signatures gathered for a petition, number of people educated about a specific problem, of number of lives saved, etc.
In addition to these primary impact metrics, there are a number of secondary SIMs to measure and optimise for. These secondary metrics are those that help support any of the primary SIMs, but do not directly have a social impact themselves.
These can include; the number of members, number of newsletter subscribers, how long someone spends on your site, number of social media shares, amount of donations received, number of volunteers recruited, etc.
So how do we improve our Social Impact Metrics without increasing our marketing budget?
The answer is deceptively simple, and lies in optimising your website…
Most websites are built, then forgotten. If a business wants to make more sales it will typically increase its marketing budget in an effort to drive more visitors to its website (hoping that they will then buy, make a phone call, or come to visit their shop or office).
Now, I am not suggesting marketing is not a good idea. I am both a marketer and a business owner, so I fully appreciate its importance. However, marketing is only as effective as the next step in a sales process.
Take a look at the following formula…
Number of Customers x Customer Value = Revenue
Now break it down a little further…
Number of Customers = Number of Leads X Conversion Rate
If you double your conversion rate, you double your sales without spending any more on marketing. However, if your conversion rate is zero, you could quadruple your marketing budget and still would not make any sales. (Despite this, most businesses focus on getting more leads, and generally ignore their conversions.)
When you increase your conversion rate, you increase the average amount of revenue generated for each lead you get.
As your average lead value increases, you can now expand your marketing efforts to include channels that were previously too expensive to justify.
This marketing expansion means you not only make more money, you also improve your Social Impact Metrics by reaching more people.
(On a side note, my personal definition of ‘marketing’ is ‘the communication of your message’. So the more effectively you do your marketing, the more effectively you will communicate you message.)
Just how important is your website in affecting both your sales and your SIMs? Take a look at the following diagram:
These days, the vast majority of marketing efforts direct leads to a company or project website. The expectation is that those leads will then take some type of action (buying, calling, visiting a store, signing up to a list etc).
But, what happens if your website does not perform well?
The exact same as if you have a sales rep who performs poorly. You lose sales. The problem is, most people have no idea exactly just how much they are losing. And, when your business has an important social mission, it is even more crucial that your site does it’s duty well.
Many businesses assume that if their site looks good then it must be performing well (or are concerned that if it does not look good, then the site must be performing badly). Yet your site aesthetics rarely have much to do with its ability (or inability) to deliver results.
Just think about Amazon, CraigsList, TradeMe, Wikipedia or even Google. Many of the most popular and successful sites on the planet are not about to win any design awards. What is far more important is to clearly communicate your message, and make it simple for users to take the action you want them to take.
A quick test you can try on your own site… find someone who has never seen it before, and has no idea what you do, then show it to them for just 3 seconds. Next ask them:
- What do we do or offer?
- Do we look trustworthy?
- Can you tell if this site is relevant to you? (Not ‘is it relevant to you’, just can you tell if it is relevant or is not.)
- Can you see where to action next?
If the answer is no to any of these question, your site certainly has room for improvement. (And that is even before getting past the top section of your homepage.)
The great news is that improving conversions (and therefore your level of social impact) will pay for itself many times over.
Even a single improvement could increase conversions by 10%. Some companies have more than doubled their sales in a single year just by focusing on improving their site’s conversion rates.
The net effect of this is hard to fully appreciate. With better conversion rates:
- You can spend more on acquiring a lead (allowing you to be more competitive and use more advertising channels).
- You can reach more people (therefore spreading your message further).
- You increase your average profit per sale (with fixed overheads, and many variable costs being relative to the total number of sales, any increase in sales also increases the average profit margin on every sale).
- With an increase in monthly profit, you can afford to hire better staff, and pay them well (allowing you to deliver a better product or service, and ensure your team is being properly looked after).
- You increase all your primary and secondary Social Impact Metrics (thereby enhancing the effectiveness of your mission).
So you see, conversions and metrics are not just for nerds or money hungry corporates. They are for every person, business or project that wants to make a real difference in this world.
Once you begin defining, measuring and optimizing your Social Impact Metrics you can also use them as part of your marketing. They help people understand what you are doing and why you are doing it.
This not only helps educate them, but gets them to care. And, people who care are more likely to want to do business with you, buy from you, or tell their friends about you.
If you do one thing this year to make a greater positive impact, make sure it is improving your website conversions. The return on your time or investment is truly staggering.