They’re called “key performance indicators,” and they let you know whether or not you’re on target for success. Without KPIs, you’re like a pilot without instruments. Why? They shine a light on performance, letting you know what areas in your business need attention.
There are scores of KPIs, and not all, or even most of them, will be relevant for your business. The trick is to learn which ones will help you get a snapshot of your company’s health, and how best to use them. Below are some examples.
Key Financial Metrics
- Revenue growth rate tells you the rate at which you are increasing your company’s income.
- Net profit is income minus expenses.
- Net profit margin is the percentage of your revenue that is net profit.
- Gross profit margin is the percentage of your revenue that is gross profit — profit generated for each sales dollar.
Understanding Your Customers
- Customer profitability score gives you a window into how much profit individual customers bring to your business after deducting the costs of attracting and keeping them happy through advertising and customer services.
- Conversion rate indicates how well you are able to translate inquiries, sales calls and Web page views into paying customers.
- Relative market share shows how big a slice of the pie you’ve got compared with competitors in the same market.
Understanding Your Employees
- Staff advocacy score, which notes whether your staff considers your company a good one to work for.
- Employee engagement level, which looks at whether your employees’ behavior contributes to the business’s overall goals.
Would you like to get a better handle on your business, to make sure you’re going in the right direction? Give us a call today and we’ll go over which metrics are the most important for your business, and how you can use them to create a better run, more profitable company.
Do you know how your business is doing? Merely having a lot of customers or clients doesn’t necessarily mean success. Click through to learn how to really measure how well you’re doing.