Many of us have the proverbial coin jar or piggy bank somewhere in a corner of room or on a shelf. When we have the opportunity, we drop in a few coins. We do this to save for a raining day or to purchase that special something. Slowly, over time, the coin number increases to such a volume that you are forced to empty the coins and sort them for rolling. If you have a lot of coins and you’re a bit wiser, you acquire a coin sorter or find a coin machine at your local bank to ease the sorting and counting process.
When you’re done sorting, you’ll discover that you don’t have an even balance of coins. There is always one coin that out numbers the rest. Like most, it’s always the coin of most abundance from your pockets or the least taken in a time of an emergency.
So, what can we learn from all these coins and the sorting process?
Using the analogy that your customers are coins, imagine the sorting machine as the different methods in which your customers typically acquire your offering. Which path did they follow to find you and which of these paths has the most coins (customers) passing through it? To add better clarity, put a value on each channel by the typical revenue generated through that channel. Take the revenue and divide by the number of customers who used this channel.
What you may discover is that one channel may have a higher volume of traffic use, but may not be the greater source of revenue. Think about the coins inside the jars and banks again. Most of us have far more pennies than the silver coins unless you’re strategic about your saving or have an aversion to copper. When counted side by side any other coin usually produces more value than the collection of pennies.
When we stop and sort the methods we attract customers, the better we can understand the greatest potential for lift in our business. Yes, it may cost more to refresh or use a particular channel to attract new customers, yet, if the revenue increase is possible, it only makes cents, sorry sense.
That’s my thinking and my two cents worth. So a penny for your thoughts.