Okay, you have implemented all strategies that you formulated for increasing your sales and achieving business growth. Now it is time for the rewards to reap in. But what if this is not the case? How can you be sure all your strategies were effective and played out well?
There is only one way to do this. You must track your progress and you can do this when you keep a close tab on your business metrics. So which of these should you take a note of? Here are the top 12.
General Business Metrics
1. Sales Revenue
Sales is the income that is generated when customers purchase your products and services. Needless to say, this metric should always rise upwards, but you must still track it regularly so that you can gain a deeper insight. Correlate your data with costs incurred in marketing, product improvements and other similar expenses. More advanced metrics like return on sales, asset turnover ratio can also be utilized if you want to measure your performance in the market.
2. Customer Loyalty
How can you get your clients to become loyal? By enticing them to buy and later on encourage them to do this in increased quantities and more frequently. Later, these people will be promoting your services on your behalf. But how do you do this? Treat them just the way they like. Get feedback from them through surveys and polls, and act on it. Stats claim that if your customer loyalty increases by 5%, your profits can shoot up between 20% and 100%.
3. Customer Acquisition Cost (also known as Cost per Acquisition or CPA)
The cost of customer acquisition is a value that reflects the costs incurred to get a new customer. You can get this value if you divide the total of your acquisition costs by the number of your new customers. Once you do this, the resultant value will reflect if you are marketing campaigns are effective or not. As time passes and you build your brand image, this metric must decrease.
4. Operating Productivity
Productivity is a very important factor for any business. You must know the potential of your (virtual) staff and you must ensure that they are giving you their very best. If that is not the case, it will be difficult for you to manage your operations and you may also face financial difficulties. Here you can also include the cost for the online tools you use in your business. Needless to say, your productivity figures should continuously rise in any given period.
5. Gross Margin Size
The gross margin is the difference between your revenues and operational costs. This is often expressed as a percentage. The greater this percentage is, the more you can retain on every dollar and enjoy increased profits. When your volumes increase, your efficiency should improve and your costs per unit should go down. Until this happens, you cannot really cash onto more profits.
6. Monthly Profits and Losses
There are many people who regard profits to be the difference in operational costs of a product and the price a customer pays you for it. This will never give you an accurate value. Instead, you should include all the fixed costs as well such as mortgages, taxes, utilities and your employer’s salary. There are two main ways with which you can increase profit: charge a higher price or reduce your operational expenses. Studies claim that if your profits are less than 60%, it will be difficult for your business to grow.
Online Marketing Metrics
7. Conversion Rates
Website development and building an online presence requires time, energy and expenses as well. Since you spend so much, you must get something in return. Conversion rates can give you a true picture of your effectiveness. Conversion rate is the ratio of visitors who generate an action on your website to the total number of visitors. This action can be anything like registering for a newsletter or buying your product. The higher the conversion rate, the better it is for your business.
8. Bounce Rate
Bounce rate is the percentage of people who visit your website and then leave it without going through any other pages. This metric is associated with all of your ads and keywords, each of which generates a different value. If you keep a tab on this metric, you will be able to improve your SEO optimization.
9. Average Page Views
Average page views for every visit reflect the engagement levels of your visitors. Should you measure this, you can determine if you are an influence or not. You may not get any instant conversion but the fact that this metric rises is a good sign. So when will this be? When your content offers value and compels people to know more about you. Just make sure that all of this is optimized with relevant keywords.
10. Average Cost for a Page View
If you are a publishing authority, this metric is of vital importance. You can use this to reach out to your audience and generate a profit for them. You can determine the average costs per page if you know what the revenue of each page is. As long as the costs are below the revenue, then it is fine. You can generate revenues by making use of paid channels.
11. Average Time
The time an individual spends on your website is a very important metric. Obviously, if you have more page views, it means people are staying on your site longer. But there are other ways as well for increasing the average time a visitor spends on you site. For instance, if people find you credible and you have aroused their interest, they will want to know more about you, and so they will stay on your website longer.
12. Percentage of Return Visitors
The percentage of your return visitors lets you measure their engagement levels. This metric will vary for each of your keywords, and you should focus on keywords that are associated with greater percentages. Do this, and it will help you in increasing your conversion rates.