How do you know if your business is growing the way you want it to be? These 5 key metrics will point to your answer!
Today’s technology makes it easy to learn more about your audience than ever before by using Google Analytics. Consider using a paid system that offers automation for tracking metrics, then consult them regularly to adjust tactics. By monitoring metrics, you’ll gain important insights sooner. As a result, you’ll improve the engagement level of your content and site.
Return on Revenue (ROR)
The revenue return rate is how much money your company makes compared to the money that is used to run the business. The calculations must take into account both direct and indirect expenses, so as well as intangible inputs that are not as visible (such as rent) and cash factors such as inflation, currency devaluation, and incorporated asset.
Whether you’re looking at revenue, cost per sale, or any other related key performance indicator (KPI), the run rate is a simple and straightforward calculation to predict future performance. If you have at least two years of historical data, calculate the monthly average. Then, if you’re looking to the next year ahead, multiply this by 12. Use a larger sample size of past data if possible.
Average Customer Spend
Your average customer spend tells you something about how much each customer buys from your company. This lets you know how well your business is doing overall and will help you understand how much you can improve moving forward.
Customer Acquisition Cost
This metric is the cost of winning over a potential customer and tells you how much it costs to attract a new customer. To predict your future financial health, use this as a benchmark figure as you grow.
Customer Retention Rate
The most important metric (in my opinion) is the customer retention rate: it tells you what percentage of your customers stay with you and purchase again in the future. This is far more important than getting new customers, which costs more than retaining existing ones. Therefore, low customer retention means that you need to step up your efforts to offer more value and engage your existing customers.
Return on Advertising Spending
Your advertising spend is an investment and like any other investment, you need to measure its effectiveness. This metric helps you understand if your advertising campaigns are earning you revenue, and if not, can help identify more effective or less expensive methods.
Metrics help you assess your progress, but if you want to really see success, you should set specific goals and desired time-frames for driving targeted action. You can then make adjustments if any if you don’t see the results you need for improvement.