Remember this post? As you recall, we talked about how metrics can matter for your business strategies. There are any number of ways you can measure the life and health of your business. We all know what our pulse rate should be and therefore, knowing your metrics is like knowing your pulse rate. If your business pulse is too high or too low, it’s time to dig deeper to find out why. Revenue, Expenses, Product Margins and Net Profit are metrics with which we are all familiar. Here are some others that may be useful for you to know:
- Customer Acquisition Cost (CAC). You know you are getting buyers of your product and service. But, do you know how much it costs you to acquire these customers? If they seem kind of high, you may want to see if your sales channels are as efficient as they could be. Or, it might be that your marketing needs a refresh. It could even be that your product or service needs some sprucing. Knowing how CAC trends over time is a good first indicator that things may need a second or third look.
- Customer Turnover (aka Attrition or Churn) Rate. Inasmuch as we’d like to keep everyone as a customer, sometimes they leave. Keeping track of who leaves and how many leave over time is valuable for you to know. Upward spikes can be tied to certain events. Was there: a new competitor that hit your market, a product update you launched, price change you implemented, or new marketing or customer servicing changes? If so, you know what to examine further that may have caused customers to leave. Also, turnover metrics can provide a good hint as to the type of customers that are not fits for your product or service. Knowing turnover helps you refine to whom you market in the first place (which can improve your CAC number).
- Productivity. You know that you and your team are working hard every day, however, it’s not always easy to know how to be more efficient unless you track productivity. One way to track it, for example, is service productivity. In other words, you can measure how long it takes to service a customer and if the customer was satisfied with the outcome. Another way is to track sales productivity which measures how many “touches” it takes before someone stops being a prospect and starts being a customer. Both of these examples provide hints as to where to improve and maybe more importantly, learn which customer is not a fit for what you offer.
There are any number of other metrics you can employ to track business pulse. Let’s have a conversation about yours over a free 30 minute phone consultation. Email firstname.lastname@example.org or call 312.208.7329.