5 Critical Metrics to Watch in Your Business
A key to business success is keeping a close eye on certain performance metrics that help you monitor thehealth of your business. Here are five metrics you can use to help keep your business on the right track.
1. Conversion Rate
Conversion rate is the number of people, figured as a percentage, who go on to take the action you want them to take. For example, it could be the percentage of website visitors who press the buy button, fill out a survey form, or show up to an invitation-only sales event. This metric helps you determine if your marketing efforts are paying off. In addition, it can provide insight into what is and isn’t working with your product, service, or messaging. To figure out your conversion rate, divide the number of completed actions (those who bought) by the number of possible completions (those who visited your site but did not buy). You can also use this free online conversion calculator.
2. Profits and Sales
A company can close a lot of sales but still not turn a profit. It could be that prices are set too low, or that as a business grows, its expenses grow, too, reducing profits. For example, if your company’s sales grow from $7,000 to $10,000 a month, you may automatically equate this jump in sales with $3,000 in profits. But until you run the numbers, including any increased expenses related to growth, you won’t know how much profit you earned from the increased sales. Remember, the equation to figure your profit is:
Profit = Sales – Expenses
3. Customer Referrals
When your existing customers refer you to other people, it’s a sure sign you’re doing something right. It’s important to track those referrals to measure customer satisfaction. In addition, the more referral business you get, the less you have to spend on acquiring new customers. Some businesses give referring customers a reward or incentive for every new customer they refer, while others simply thank them. You can keep track of who sends referrals your way by asking new customers how they heard about you, or by using a customer referral app like ReferralCandy.
Learn about the last two metrics keep your business on the right track here: http://ow.ly/KJAo7