Measuring the success of a business requires comprehensive data collection and analysis. With countless examples of business metrics, it can be difficult to know which ones are worth tracking. While the ideal combination of key performance indicators (KPIs) will largely depend on the individual needs of your company, there are certain metrics that all companies should track. Members of the Forbes Business Council share 15 KPIs that all companies should track. The cost of acquiring customers, monthly recurring revenues, and total revenues are important metrics of business success that need to be monitored.
To measure the success of your marketing efforts, you can track the return on investment (ROI), the lifetime value of the customer, and the conversion rate from MQL to SQL. Examples of financial metrics include revenues, profits, and market share. Non-financial metrics can include customer satisfaction, number of customers, and employee satisfaction. The ability of managers to act in a reliable and connected way when employees are struggling is an important metric. Retention and attraction are largely dependent on the ability to connect at an authentic level.
It's also essential to measure how long it takes to finish a project, as this allows you to have honest conversations with customers about how long a project will last. It also allows you to understand and improve your own processes. Measuring and tracking employee well-being is key for any organization. This metric will show you a picture of how your company has grown over the years or has experienced a downward trend. Revenue is another key metric that every company uses to correctly calculate its performance. If employees don't have the energy to be creative and resilient when it comes to dealing with specific business challenges that may arise, your company will be at risk and your key strategies won't be implemented.
Tracking customer lifetime value (CLV) is also important, as it allows companies to understand what makes their company a great place, and areas for improvement come from an open and honest conversation. Measuring progress towards business objectives is also essential. This metric will allow you to know if your company is going in the right direction and make changes when things get out of control. Liquidity ratio is another important metric that indicates the liquidity of your company and incorporates assets that can be easily converted into cash. Employee engagement is also essential for any successful business. The product or service may be great, but unless the company is a one-person operation or has no competition, employee engagement will correlate with company performance.
Gross profit margin (GPM) is a measure of profitability that shows how much the cost of goods sold (COGS) is lower than total revenues. Time spent on product is another key metric that every company must track. It is a measure of the total time that users spend on your product (website, mobile application, web application or desktop application) and divide this time by the total number of users. Tracking website bounce rate is also important as it's the extent to which website visitors leave or leave after arriving at the landing page of your website. Finally, tracking traffic sources is essential for any successful business. This will help you identify which traffic sources work well for your business, so that you can capitalize on that resource and see the sources of problems that aren't beneficial to you.
By detailing these measures and comparing them with the objectives, companies can gain valuable information about the effectiveness of their sales teams.
