Data is a key factor in determining many critical business decisions. As a business owner, you probably keep multiple records every day, from transactions and payroll to projected profits.
While there are many metrics that are important to track for business growth, there are a few high-level metrics that can improve your business operations. To this end, eight members of Council for Young Entrepreneurs discuss some key metrics your business should be tracking and why.
1. Product Engagement
Without a doubt, more companies should follow product engagement as a benchmark. It is essential that you know how often your customers interact with your product. The more they do, the happier they are and the less churn you will experience. Customer satisfaction is an unspoken element of commitment. It’s easy to delve into your own technology, but choose to be guided by the market and the customer. If customers don’t use the product, they don’t get the value. Keep your ears and mind open to the customers and the market and help them define what you do. † Kevin Marcus† Verium Analytics, Inc.
2. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
One high-level metric that most business owners don’t track, but should, is EBITDA. EBITDA stands for your earnings before interest, taxes, depreciation and amortization. This number determines the value of your business in many industries if you choose to retire in the future. Rather than focusing on revenue, EBITDA gives founders a much better understanding of the true enterprise value of their company. † Jessica Fialkovich† output factor
3. Net Promoter Score
Net Promoter Score (NPS) is an important metric that many large companies use, but should be used by companies of all sizes. It tells you directly what your customers think of your company. Will they recommend your company to others? Are they satisfied with your business or not? Are they happy or not? Are they loyal to your company or not? These questions are key to understanding your current brand reputation and identifying issues that need to be resolved before they negatively impact your sales and bottom line. NPS helps you identify your best customers who will promote your brand, which can help you strategize future marketing investments to attract more of your ideal customers. It is a critical statistic for any business. † Jonathan Prichard† MattressInsider.com
4. Lead Conversion Rates
I always thought I had a sales problem until I realized I had a conversion problem. In other words, we weren’t short on leads – we had a conversion problem. When we identified how many leads contacted us, how many of those leads were qualified, and how many of those qualified leads actually hired us, it gave us a better perspective on what we were doing right and what we were doing wrong that we needed to change. We found that the leads we spoke to in the morning gained more value than the leads who spoke to us in the afternoon and that by charging an advisory fee, which our competitors didn’t, we were getting serious, qualified leads that were ready were to hire our professional services. Basically work smart and not hard by using metrics to improve procedures. † Givelle Laman† Law firm Lamano
5. Sales Growth YTD
One very important metric that every company should track is their revenue growth to date (YTD). Tracking this metric can help you understand the rate at which your company’s sales revenue is changing. Based on this statistic, you also know where your company stands. The effort should be to increase your sales every month or at least keep it constant to ensure that your business is on the right track. † Thomas Griffin† OptinMonster
6. Customer Lifetime Value
One high-level metric that companies should track is customer lifetime value, or CLV. It is a measure of the total profit a company makes from a customer. There are a few reasons why you should monitor your CLV. First, by understanding how much profit each customer brings in, you can make better decisions about where to allocate resources. It’s also a great way to identify and target valuable customers. And CLV can help predict future earnings. This is because customers with a higher CLV are more likely to continue doing business with a company, and they are also more likely to refer new customers. † Blair Williams† Members Press
7. Employee Productivity
While companies need to track several metrics, I think more companies need to track employee productivity. This is because employee productivity is an important indicator of a company’s success and can be tracked relatively easily. Additionally, tracking employee productivity can help companies identify areas where they may need to make changes to improve their overall performance. † Syed Balkan† WPBeginner
8. Customer churn
One metric that is often overlooked is customer churn or the number of customers you lose per month or year. If you have customer data, not just emails, it would be nice to look at each customer’s purchasing trends and then wonder why they stopped buying. The course shows you the gaps in your product and where you can improve. It’s a unit of measurement for the full cycle, and if a customer stops buying and you have data, a quick, non-intrusive phone call will explain the reasons and, who knows, this phone call will bring a customer back to you if you can to show . Zero churn is simply not possible – today’s consumer has too much choice! – so it is recommended to keep it within reach. † Candice Georgiadis† digital day