Tracking What's Actually Working
The four numbers every small business should measure to spend smarter.
Notes from Randall Harper. Thirty years working alongside owner-operators, executives and boards — companies of all types and sizes — across entertainment & media, hospitality, service based business, lifestyle businesses, financial services, retail and not-for-profit, in Australia, Asia, the United Kingdom and the United States. What follows is the thinking I keep returning to.
You cannot improve what you do not measure
Most owner-operators have a vague sense of which marketing is working and a strong sense of which is loud. The two are not the same. Without simple measurement, marketing budget drifts toward what feels familiar rather than what actually pays. Four numbers, tracked monthly, will reorient almost any small business.
The four numbers
- Where did each new enquiry come from? — One column on a spreadsheet, asked of every lead.
- What did it cost to acquire each new customer? — Total marketing spend divided by new customers.
- What is each customer worth, over time? — Average revenue per customer in the first 12 months.
- What is the ratio between the two? — A customer who costs $50 to acquire and produces $500 in margin is a channel worth doubling.
Ask one question, every time
On every enquiry, every quote, every first job, ask: how did you hear about us? Log the answer. After ninety days, the pattern will be unmistakable — most of your business will come from two or three sources, and the rest will be noise. That single question, asked consistently, produces more useful marketing insight than any dashboard.
Stop the underperformers, calmly
Once you can see what works, you have to be willing to stop what does not. This is harder than it sounds, because the underperformers are often the channels you spent the most time setting up. The discipline is to evaluate based on the next ninety days, not the last twelve months. What is the smartest place for the next dollar — not the place that already has historical investment.
Quarterly review
Once a quarter, an hour with a coffee and a spreadsheet. What did marketing spend produce, by channel? Where will the next quarter's budget go? What experiments did not work and should be stopped? Most owner-operators have never done this exercise. The ones who start usually find they were spending 40% of their budget on channels that produced 5% of their business — and the act of seeing it changes everything.
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The contents of this paper are the opinion of Clear Point Advisory only. Readers should rely on their own judgement and obtain professional advice appropriate to their circumstances.