Data is the driving force behind business decision-making, but if you’re not looking at the right metrics, you could be missing out.
To address this, here are some of the key signals that indicate how well your company is performing, and where there’s room for improvement.
Your sales revenue
First and foremost you need to be on the ball when it comes to recording and analyzing the amount of cash you’re raking in from sales.
Remember that this total has to take into account any items that have been returned post-purchase, or else you could get the wrong impression about the popularity of what you’re selling.
You can drill down into sales by the day, week, month or year, and it’s good to be both broad and specific in your analysis so that seasonal trends and short term shifts are better understood.
Your customer acquisition cost (CAC)
Put simply, CAC represents how much you need to spend to bring new customers onboard. This includes aspects like ad spend, along with general marketing expenses.
If you’re paying more to promote your products than you’re getting back in sales, something’s wrong. Of course if you’re still early in your journey, ad spend can outstrip revenues while you build a reputation.
In this case, it’s a good idea to finance customer acquisition with a view to reaping the rewards further down the line.
Your churn rate
It’s not just the customers who you win over that matter, but also those that you lose over time. This is what’s referred to as churn, and it’s a metric that may be more useful than most when gauging business performance.
Churn is typically expressed as a percentage, and is easier to track in the case that your business operates on a subscription model, meaning you can use cancellations received in a given period as an indisputable metric.
You can also reduce churn through a combination of tools and tactics, including by focusing on the facet of your business operations that we’re about to discuss.
Your levels of engagement
This is a more nebulous metric, and one which is made up of several different components. Nevertheless, being clued up on customer engagement pays dividends, as it lets you pinpoint problem areas and make changes to address them.
One area where engagement can be measured is online. Looking at the number of people who touch base with your brand through your website, on your social feeds, and via email, will give you an idea of the platforms that are bringing in the largest proportion of prospects, and those that are not pulling their weight.
You can also be proactive in tracking and measuring customer engagement through the use of surveys and other forms of feedback. Letting the people you serve express their levels of satisfaction with their experiences will highlight your strengths as well as your weak points.
It’s also useful to take the same in-depth approach when it comes to employee engagement. If your workforce doesn’t feel involved in and invested in the direction the business is taking, you’ll struggle to keep them loyal. Feedback has a part to play once more, so should not be overlooked.
Your adherence to deadlines
With each project you undertake, having a deadline in mind is useful as a way of seeing how closely you can stick to the schedule you set out up top.
If projects are generally overrunning, then you either need to improve your processes, or rethink the way you set deadlines in the first place.
There are many more metrics you must measure as a business decision-maker, but now you’ve got a good grounding in those that matter most, you can begin making a difference.