As a CEO, it's essential to measure success in business management. There are countless metrics to consider, but some are more important than others. Revenue growth is one of the most crucial metrics that all companies should track. This is because revenue is the total amount of sales you receive when you sell your products to customers, deducting from the final result the cost of items returned or not deliverable.
Other financial metrics that should be monitored include profits, sales revenue and market share. Non-financial metrics such as customer satisfaction, number of customers and employee satisfaction are also essential. The percentage of current business that consists of repeat customers is another revealing and important metric. This metric can help you reduce turnover and strengthen your customer retention strategy.
Key performance indicators (KPIs) are also vital for companies in general. Examples of KPIs include achievement of sales share or net profit margin, achievement of sales quotas and net profit margin. Measuring financial performance can help you maintain positive cash flow and avoid business failure. Analyzing business metrics can help identify emerging problems in time to correct them before they become major weaknesses. CEOs should closely monitor only a handful of summary metrics extracted from the dashboards of each of their direct reports.
Finally, measuring success requires comprehensive data collection and analysis. It's up to your team to determine what time period makes the most sense for your company and industry. Based on business objectives, plan and measure business progress and make changes when things get off track. You can find good examples of lifetime value (LTV) in companies that have established successful long-term customer relationships, such as subscription-based services and membership clubs. Reporting business metrics is a vital communication tool for customers, shareholders, employees or society in general. Ultimately, success metrics provide a picture of your company's performance, allowing you to improve overall results and future performance.
