It isn’t easy to overstate the importance of following the critical metrics of your business. Without these numbers, you can quickly find yourself blindsided by external forces. Tracking metrics will help you excel in all areas of your business.
Business Development Metrics To Track
Sales revenue is one of the most critical numbers in any business. The more you have, the more you can spend on marketing and the more you can invest in developing your product. But, unfortunately, the only way to increase sales revenue is to target a new segment or purchase a new customer acquisition channel.
Net Profit Margin
Must be positive. This metric measures how much money is left after all expenses have been paid. If your net profit margin is negative, it means that your business is losing money, and you need to look at how it’s being spent.
Indicates the amount of money put back into the business each month. If the gross margin is higher than zero, there’s a cash runway for growth and expansion.
Indicates the rate at which sales are growing relative to the time. A positive number is good. Of course, it’s better than zero, but you need more than just the numbers to determine how successful a business is doing.
Cost of Customer Acquisition
Indicates how much money a business spends on acquiring a customer relative to how much it makes from that sale. If your customer acquisition cost either increases or decreases, you have one of the following options:
- increase your marketing investment or
- decrease customer acquisition costs by reducing prices or reducing promotion costs by lowering the quality of the product being sold
Customer Net Promoter Score
Indicates customer loyalty to your business by using a single-question survey. The NPS question is, “How likely are you to recommend us to a friend or colleague?” The responses are scored on a scale of 0-10, with 0 being not likely at all and ten being extremely likely. You can increase your customer net promoter score anytime you get them excited about your product or service.
Customers who initiate the commitment stage of the buying process (inquiry, lead, qualified lead). The conversion rate of both MQL and SQL to clients is one driving metric for sales. In addition, it helps you choose the best channels for acquiring customers and maximizing your marketing investment.
Lead To Client Conversion Rate
This is a good metric to track, but it’s not as important as revenue. In addition, you need several leads before you can start comparing conversion rates. The only way to increase this number is to change your customer acquisition strategy or improve your sales process.
Monthly Website Traffic
It can help you gain a competitive advantage if it’s high relative to competitors in your industry segment or vertical market niche. You can increase monthly website traffic in several ways:
- increase your brand awareness
- make it easier for people to take action
- improve your search engine rankings (SEO)
Met and Overdue Milestones
Something that you should be doing in your business plan or strategic plan. Examples include
- customer acquisition
- product development,
- time-related (daily, weekly, etc.) such as several calls made, emails sent, and meetings scheduled
Not just a number to track but also an essential factor in your business success. Employee happiness is an indication of how productive they are at their jobs. You can increase employee happiness in several ways:
- treat your employees well
- increase their autonomy
- provide them with growth opportunities
- be a good role model
Logically, if customers are loyal to you, then they’ll continue to do business with you. This metric indicates how likely they are to make referrals to your business. This metric can be measured using four different methods:
- customer net promoter score
- customer renewal rate
- lead conversion rate
- retention rate
You can also predict employee loyalty by having a written job description that reflects the qualities of the most successful employees in your company.
Logically, if you keep your best customers, they’ll work with you for an extended time; therefore, the retention rate of customers is a crucial metric for your business success because it describes how likely your customers are to make referrals to your business. You can track this metric by implementing an electronic database or using a software package that automatically sends weekly customer reports.
In marketing, attrition is the management of customers who no longer wish to do business with you. One way to measure your loss of customers is utilizing a unique method that measures the attrition rate of each customer twice, then compares these numbers from one period to the next period. Salespeople can use this metric to figure out why customers are leaving. For example, if attrition is high, they should investigate the reasons for the customer’s decision to leave or look for opportunities in their products or services that will cause customers to stay.
Customer Acquisition Cost
The cost in dollars it takes to acquire a new customer. For example, if your monthly marketing budget is $10,000 and you could buy 1,000 customers at $100 each (based on the average lifetime value of a customer), your customer acquisition cost would be $100,000 per month. Another way to calculate the customer acquisition cost is by dividing the monthly marketing budget by the monthly number of customers acquired.
Customer Lifetime Value
The customer lifetime value (LTV) is the total amount of money you expect to receive from sales to a particular customer throughout their lifetime with the business.