Efficiency practices can be both time and resource consuming, and it may appear that they’re slowing your business down. If that’s happening, you may find yourself asking why efficiency is so important, and if it wouldn’t be better for your business to cut back on these measures.
Today we’re taking a look at this issue and why it’s important to devote time to ensure your spending is efficient be it on marketing, hiring or sales.
Return on Investment
One of the most important metrics for you to assess when you’re making a judgement about how successful a project or initiative has been is not the raw figure it’s generated in revenue, but how much it’s delivered a return on investment. If you privilege this measurement, it helps to protect you from short-termism, and profligate spending that doesn’t actually benefit your business.
If you’re not tracking the return each of your investments in marketing or product design makes, it’s very hard for you to know if your business is successful or not – you could find yourself burning through your funding without building a following that can support you after those initial start-up phases.
Boosting Efficiency With Outside Help
One definition of efficiency is getting the most effect from the smallest use of your resources. Sometimes you have to admit to yourself that you don’t have the expertise to make the best decisions in given areas, and it’s more efficient for you to invest in experts who can stretch your resources further.
One area where it’s worth considering this is marketing. Finding a small marketing agency with a specialism in your niche gives you expert in identifying your audiences, targeting them, and in general campaign planning with an emphasis on efficiency. If you’re not able to identify and target your audience with fine accuracy, you’ll find your costs ballooning, as you spend more and more money serving adverts to people who have no interest in your products and will never spend money with you, which can erode the return on your investment in marketing to the extent that you spend more than you can generate from sales!
It’s tempting to focus on the sheer amount of revenue a given campaign generates, but if you’re losing a lot of that money to inefficient business practices – especially to refunds from dissatisfied customers – it’s not a true measure of how successful your business is.
Investing in revenue retention resources – like improving the quality of your products, the reliability of your courier service and an expert customer service department – helps to boost your efficiency, meaning you keep more of every penny of revenue you collect.