Every business owner wants to know how well their business is doing. For many, the answer can be found in tracking your company’s most important metrics. When you’re running a small company with few employees, it can be difficult to keep track of all the different aspects of making your business successful like an eCommerce growth agency could. Luckily for you, we’ve compiled six must-track metrics that will help you grow and succeed!
Having a growing revenue is the primary goal of any business. It doesn’t matter if you’re selling products or services – as long as your company continues to generate more and more income, it’s safe to say that your business growth is on track.
Revenue comes in different shapes: subscription-based payments (businesses like Spotify), recurring billing models (like phone carriers), and product sales are all considered sources of revenue for businesses across the globe.
One way to know whether you’re succeeding with generating revenue would be by looking at one metric called Revenue Per User, or RPU. This number reflects how much money has been generated per user over time – which means every additional customer will contribute towards this amount!
Expenses are the costs that your business has to pay. For many companies, expenses can be broken down into fixed and variable. Fixed Expenses remain at a constant level over time (or with minimal fluctuations). Examples include rent payments or insurance plans for the company’s employees. On the other hand, Variable Expenses tend to fluctuate constantly depending on how much work is being done by your team and how much revenue has been generated in total. One of these expenses can also include recruitment efforts – if you’re looking to hire more people, this will come as an expense!
Customer Acquisition Cost
Another important metric for measuring business growth would be Net Income or NI. This number reflects the amount of money left over after all expenses have been paid. After calculating NI, you can divide it by your number of users to find out Customer Acquisition Cost (CAC). This metric shows how much money is spent on acquiring each new customer!
Customer acquisition cost is important, especially for businesses that rely a lot on advertising or marketing to bring more customers towards their company. It helps measure whether those investments made pay off and contribute to further business growth as well!
Lifetime Value of a Customer (LTV)
As mentioned before – not every source of revenue comes directly from sales/revenue generation itself – sometimes, there are additional costs involved with bringing new clients on board. This is where the Lifetime Value of a Customer (LTV) comes in!
LTV calculates how much revenue a customer will generate for your company throughout their relationship with you. It’s important to remember that this metric isn’t just limited to direct sales either – it can include subscription renewals, upsells, and even referrals from happy customers!
When it comes to business growth, you’ll want to keep an eye on Gross Margin as well. GM shows how much profit your company makes after subtracting the cost of goods sold from total revenue. This number is expressed as a percentage and gives you a good indication of whether your products/services are profitable overall.
A high GM usually means that you’re doing well in terms of pricing and that your products are in demand. It can also help you understand whether or not you need to increase prices (or make changes to the product itself) to maintain a healthy margin.
Net Promoter Score (NPS)
Last but not least, we have Net Promoter Score – or NPS for short! This metric is used to measure customer loyalty and is calculated by asking customers how likely they would be to recommend your company/product/service to others. Scores range from 0-100, with anything above 50 considered “good” or “excellent.”
NPS is important because it gives businesses an indication of how happy their customers are and whether or not they would recommend the company’s products to others. It also tells you how good your customer service is (or how well you treat your clients in general) – since a happy client will always be willing to go out of their way to help other people find happiness with your product too!
Conversion rates are an important metric for any company, but they can be hard to get right. The six secrets we’ve shared in this article should help you increase your conversion rate by giving your website visitors more than one way to contact you and providing social media links so people can connect with you on other platforms.