How can you rest assured that your company is progressing in the right direction? You’ll need objective data to determine whether your company is meeting its objectives and what you need to do to maintain growth and avoid stagnation. Below are the five most important metrics to monitor when your business is experiencing the growth stage.
Today’s technology makes it easier to keep track of these indicators without hiring an analyst. Google Analytics is a free tool that provides a wide range of analytics. There are also paid software applications available that automatically calculate critical statistics.
Return on Revenue (ROR)
After expenses are deducted, the revenue return rate is the amount of profit your organization makes. Subtract your running expenses from your overall income. Day-to-day expenses must be included, as well as expenses that aren’t readily visible (such as rent and office supplies) and non-cash elements like inflation and property depreciation.
The run rate is a formula that predicts future performance based on current results. Calculate a monthly average if you have two years of data. Then double this by 12 if you’re going forward a year. Use all the available historical data.
Customer Spending Average
The average customer spend reveals how much money each customer spends with you. It is derived by dividing your total revenue by the number of current consumers you have. This indicator offers you an idea of how well your business is doing.
Cost of Customer Acquisition
The cost of persuading a potential consumer to buy your product or service is measured using this statistic. It tells you how effective your sales and marketing efforts are and what resources you’ll need to turn leads into customers. You can use this to forecast your financial future as you grow.
Rate of Customer Retention
The customer retention rate indicates how many customers return to buy from you multiple times. Getting new clients is far more expensive than keeping old ones. Your company is losing money if your retention rate is low. Low customer retention means you’ll have to work more to keep your audience engaged and provide lasting value.
Return on Investment in Advertising
This metric examines the cost of advertising as well as the amount of income it generates. It tells you whether or not your advertising investment is paying off. You should look into more effective or affordable alternatives if it isn’t.
Metrics can help you track your development, but if you want to experience success, you should set goals and stick to them. If you’re not getting the results you want, you can modify and change things continuously.