Every new strategy should begin with a plan to generate revenue, which usually comes along with metrics for success. Whether it be an online or offline channel strategy, you need to understand what the impact will be on your business if it goes well or not. Each new channel requires a significant capital and/or time commitment, which is why evaluating the channel is so important both during and after executing the strategy. Taking a half-hearted approach to any new channel will almost certainly deliver mediocre results which will make your new investment a loss. Posting a few pictures here and there on social media will not prompt an effective response just as showing up to a fair with a cardboard box and a pile of product will not help you sell anything either.
Your business is unique; approaching new strategies with generic metrics will likely not deliver what your business needs, but can be a good start to understanding the path to take. Here are some things to consider when evaluating a new strategy:
- Conversion rate: What percentage of customers will make a purchase?
Items per person: How many units of what do you expect to sell?
- Gross Margin: How much are you making per product sold?
- Average revenue per customer: Total revenue divided by the number of customers. Once you have this, you can dive deeper into the products and volume of purchases.
- Cost per customer: How much did it cost to acquire the customers? Consider all content, collateral, advertising, and labor.
- The number of customers: How many customers do you expect? Is there data supporting the size of the channel?
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