When running your business, there are some basic metrics you want to track to allow you to make the best decisions possible for you and your employees. Gut feelings are valuable, but reliable data can validate that gut feeling – or show you something that wasn’t on your radar yet. At their most basic, there are a few different metrics and reports you are going to want to have at your fingertips.
Sales Revenue
I bring this metric up first because you can pull a lot of information out of it on a month-to-month or even on a bigger scale from year-to-year. This will tell you right away if your customer is interested in the product or service you are providing or if a new marketing campaign is making an impact. This really measures how your company’s efforts are paying off. Setting a mark to meet or a certain goal is important but always remember that sales is always a variable and is affected by both internal and external pressures. Best practice for improving this metric is by expanding marketing, keeping your pricing competitive, and employing the right salespeople. Always look at this metric as something you want to grow with a long-term strategy.
Gross Margin
The better this percentage looks, the more money your company is earning for each sales dollar. Keeping an eye on gross margin helps you spot situations where your costs are growing faster than your revenue – which is an early warning sign that you want to pay attention to. Additionally, this metric will show if your company can make improvements to production and processes. If your company has someone that is familiar with process improvement or a relationship with a consultant that works in this field, this is the time to employ that skill-set.
Customer Retention
This may not come to mind right away when your company is thinking about metrics and reports because it is not dealing with dollars. But this is a metric that helps your business in so many more ways than just repeat business. Your company should do everything it can to keep customers happy and keep them coming back. The very best marketing is good word-of-mouth and there is no secret on how to improve this metric other than just providing excellence in all aspects of your business. Calculating this metric isn’t difficult, but you may not always have easy access to the numbers you need – things like customers with repeat business or customers that have not done business with you over a set period of time. For some businesses, this is measured over weeks; for others, you may only be able to identify loss annually.
Monthly Website Traffic
Whether your company is relying on just a web-site or your business is well integrated into social media there are a plethora of metrics to follow and improve. One of the best indicators on how your company is doing is by the amount of traffic you may be seeing online. The more your business is talked about the more traffic you will see and it all falls like dominos after that. There are some free marketing tools out there to give you a sample of the metrics it will provide but getting a marketing team to truly explore all options and pull all data available will take some investment but will pay for itself in time. Monthly your company can pull these numbers and see if the new product is doing well and what customers may have to say as well start to paint a picture on what your main audience happens to be and then tailor a marketing strategy to either specialize it even more or change something to broaden the clientele.
