Do you know your company’s performance?

Business metrics, also known as KPIs (key performance indicators) are used to show how a company is progressing towards its goals.

These are usually tracked on a KPI dashboard.  KPIs show if a company is achieving its goals in a planned timeframe.

There are hundreds of different KPIs that can be tracked, but each business needs to decide on the ones that are most beneficial for them.

Below are some of the key metrics that businesses should be tracking.

1. Sales Revenue

This KPI can tell a lot about your company.  You can see the sales results month by month and tell the interest people to have in buying your product or services.  Sales revenue is calculated by summing up all the income from purchases minus the amount of any rebates or returns.

The obvious way to grow your sales revenue is to grow your sales.  Growing sales revenue is a long-term strategy.

2. Net Profit Margin

This metric indicates how efficient your company is at generating profit from its revenue.  This metric is a good indicator of long-term growth.  It is calculated by subtracting the expenses from your sales revenue.

3. Gross Margin

The higher your gross margin, the more the company earns on each sale.  The gross margin is equal to your company’s total sales revenue minus its cost of goods sold, divided by the total sales revenue.  Gross Margin can be improved by making more sales and improvements to your processes.

4. Cost of Customer Acquisition

The cost of customer acquisition is calculated by dividing all the costs spent on acquiring new customers (marketing expenses) by the number of new customers acquired during that time frame.

5. Customer Loyalty and Retention

Retention rate shows the number of customers who keep using your products/services over an extended period of time.  Customer loyalty can be improved over time by providing excellent customer care and delivering high-quality products/services.

6. Net Promoter Score

Net promoter score reflects customer satisfaction in your product/service.  It shows how many people are willing to recommend your product/service to others.

7. Qualified Leads per Month

This business metric will show if you are targeting the right market with the highest potential for attracting new customers for your product/services.  If your number of qualified leads is declining, this means that you need to re-evaluate your marketing strategy.

8. Lead-to-Client Conversion Rate

Leads do not turn into customers on their own.  This metric shows the ability of your company to take these leads and turn them into sales.

9. Monthly Website Traffic

Using a free marketing tool such as Google Analytics, you can track your monthly website traffic as well as traffic sources.  This will help you understand how people are finding your website.

10. Employee Happiness

Don’t we all want to be happy in our jobs!  Research shows that people are more efficient when they are happy with their jobs.

 

If you need more help in determining which metrics would be best for your company, book a Discovery call with us.  We would love to talk about this further!