Dripping The Business Away

Sometimes things that go wrong in a business are hard to find. Sometimes we don’t even know they’ve gone wrong. It’s easy to spot the employee that disrupts a vibe of a department or the salesperson who isn’t producing. Other problems are much more insidious and require a deeper dive by management.  The problem is that unless the business is under performing as a whole some managers are happy just to mosey on down the road.
Here’s an example. You run an ecommerce business and your business is flat. In this economy that might be OK so you thank your lucky stars that you’re not off 35% and move on. Your web analytics tell you that visits this month are OK and average order value is growing. You, then, make the fatal mistake of leaving it at that.

Had you drilled down a bit, you would have seen that the reason traffic was flat was that you ran an well-done paid search campaign that converted well. However, your organic search traffic was off, particularly in two or three big keywords. In the scheme of things, it probably amounted to fewer than 100 lost orders, a drop in the bucket.

Really? 100 orders at, say $100 per order is $10,000 this month that went elsewhere. Now that drop is a lot bigger. What percentage of those orders would have come from new customers (you should know those stats!)? What is the average lifetime value of a new customer? Bigger still.  You see my point?

It’s the drips that kill us – the little pinholes in our business buckets that we never see until the bucket is empty and we hold it up to the light. We constantly must look for moisture around our bucket and not assume that it’s just condensation – there’s a leak someplace. Even if the bucket is full, why not make it overflow?

The time to ask “why” is when things are OK or better in your business.  If you start looking for those drips when the stress of things being bad is upon you, it’s probably too late to do much about them before you run dry.  Too esoteric a thought? What do you think?