It’s frustrating to know you’re capable of more, but you can’t seem to achieve it. Perhaps the lifestyle you’re working towards is slow to materialise. Whatever your motivation, the overall goal for any business owner is to be successful.
Performance measurement is a way of tracking what goes on in your business. It’s vital to improving the weak points without undermining your business’s strong points. Choose the right metrics, and you’ll be well on your way to success. Keep reading to learn which business metrics to use.
What are performance metrics?
They’re quantifiable measures, used to track a business process and assess the status of it. There are different, specific metrics for every area of business, from the big picture to tiny details.
Marketing metrics display the overall performance of your marketing team. Include social media metrics, as social media marketing is now a core part of any business. Multiple metrics are key, especially if you use multiple platforms.
Sales metrics show the overall performance of your sales team. If you sell software as a service (SaaS), you’ll also want SaaS Metrics to help you understand how well you attract and retain customers and generate recurring revenue.
Financial metrics tell you how much money you’re making, and how well you’re managing it. That’s exactly what stockholders and potential investors want to know, so make sure you have the right information at hand.
General Business Metrics. There’s always more to measure. Every business has data that should be monitored in real-time, such as time to healthcare services, service level, call abandonment, or project burn-down.
What should you be tracking?
As you’ve probably realised, there are lots of different metrics in each overall category. You might choose specific metrics to hone in on parts of your business. We’ve included 12 key metrics for all businesses:
- Sales revenue. Are people are buying your product?
- Net profit margin. How efficient your company is at making profit.
- Gross margin. This reflects changes to process and production.
- Sales growth year-to-date. This gives you the general trend of your sales revenue.
- Cost of customer acquisition. Compare to the Customer Lifetime Value to learn whether you’re getting a bargain.
- Customer loyalty and retention. Do you secure repeat purchases and word of mouth recommendations?
- Net promoter score. Customer satisfaction, based on how likely your customer is to promote your product.
- Qualified leads per month. Make sure your marketing dollars are spent on the right audience.
- Lead-to-client conversion rate. Your sales team does the work of turning leads into customers. How are they performing?
- Monthly website traffic. If you’re well known and respected, your website should be bustling.
- Met and overdue milestones. Are you crushing your targets, or is your team swamped?
- Employee happiness. When employees are happy, they’re more productive.
Why it’s important for business success
How you use business metrics is important too. For example, you might discuss different metrics with your executives, middle managers, customers, or investors.
Measure your financial performance to keep your cash flow healthy, or find real world ways to achieve your business goals. Make sure your employees understand how your business is being measured, and how their role impacts the overall business outcomes.
Improve efficiency and productivity by revealing the performance issues from the very top to the very bottom of your business. The options are endless.
Metrics empower you to improve your business - that’s why they’re vital. With metrics, you can improve overall results, or target a particular area of your business. They can also help you align your systems and people with your business goals.
Understand your business metrics, and you’re well on your way to success.