The key to building a thriving, solid business can be to track key metrics. As Aristotle said, “What gets attended to gets done. “ The goal is to identify the metrics you need to monitor for your business goals and use them to grow your activity with current and prospective customers, which will ultimately help grow your business. Once you understand which metrics are important to your business and set up a systematic way to track them each and every week, you’ll start to identify trends that you can use to help make success predictable in your business. Here are my favorite metrics that I feel every business should track:
Yearly Revenue Goal: The gross revenue goal for your business in order for you to pay yourself and team members and operate your business.
Monthly Revenue Goal: Take your annual goal and divide it by twelve. This is the number to track consistently to ensure that you achieve your target.
Daily Sales Goal: This is the number you must generate via sales daily to achieve your monthly revenue goal.
Daily Sales Average: Take your revenue to date and divide it by the day of the month. Is this number what it needs to be to hit your monthly revenue goal?
Closing Ratio: This is the number of new deals you close out of ten.
Monthly Burn Rate: This is the amount of cash you “burn through” during any given month in your business.
Profit Margin: This is how much profit you are making in your business or per transaction. To calculate: net revenue / gross revenue.
Here are an additional 32 Key Performance Indicators that you may or may not have found important to your business:
Sales Key Performance Indicators:
- Hourly, daily, weekly, monthly, quarterly, and annual sales
- Average order size (sometimes called average market basket)
- Average margin
- Conversion rate
- Number sales conversations per day, week, month, year
- Shopping cart abandonment rate
- New customer orders versus returning customer sales
- Cost of goods sold
- Total available market relative to a retailer’s share of market
- Product affinity (which products are purchased together)
- Product relationship (which products are viewed consecutively)
- Inventory levels
- Competitive pricing
Marketing Key Performance Indicators – Online:
- Site traffic
- Unique visitors versus returning visitors
- Time on site
- Page views per visit
- Traffic source
- Day part monitoring (when site visitors come)
- Newsletter subscribers
- Texting subscribers
- Chat sessions initiated
- Facebook, Twitter, or Pinterest followers or fans
- Pay-per-click traffic volume
- Blog traffic
- Number and quality of product reviews
- Brand or display advertising click-through rates
- Affiliate performance rates
Marketing Key Performance Indicators – Offline:
- Number networking events
- Number new contacts to pursue
- Number discovery sessions
- Number speaking engagements
- Number new prospects
Customer Service Key Performance Indicators:
- Customer service email count
- Customer service phone call count
- Customer service chat count
- Average resolution time
- Concern classification
Once you have set goals and selected Key Performance Indicators (KPIs), monitoring those indicators should become an everyday exercise. And most importantly: Performance should inform business decisions, and you should use KPIs to drive business actions.
- Develop your KPIs and a system for tracking and reviewing them daily.
- Create your weekly sales strategy. Including how to reach out to:
a) Current Clients
b) Previous Clients
c) People Who Haven’t Closed
d) Low Hanging Fruit
e) Free Offer Subscribers
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