5 Metrics Your Small Business Should be Tracking for Success
Analytics make the world go ’round. When businesses know what their success actually looks like in the terms of hard figures and statistics, it’s easier to keep the magic happening. How can you replicate success if you don’t actually know what you’re succeeding at?
Metrics are something any business owner should pay attention to, and we’ve listed five very important metric values that you may be neglecting.
1. Payment Failure
This may seem like a somewhat asinine metric to keep track of, but small businesses can learn a lot from how many clients fail to pay them in a given period. For instance, a company that has a failed payment rate of 2% can see that they’re connecting with their clients. No one is really backing out of the sale and things are running smoothly.
Higher payment failure rates, however, can indicate something is going wrong within the sales funnel or that marketing tactics are off somehow. Failed payments mean there’s a blatant disconnect between the client and the business.
2. Cost Per Acquisition
Your CPA, or “cost per acquisition,” is an important number to keep track of. What exactly does it measure? As it says on the tin, your CPA is approximately how much you’re spending to attract one new customer to your business. Say you spend $500 on marketing for the month and retain 100 new clients in that same month. That makes your cost per acquisition $5. The math is simple: divide the total cost of marketing and sales by the number of new prospects within a specific period of time applied to both sides of the equation.
3. Conversion Rate
Your business’ conversion rate speaks to how many new clients are signing on to your service or business in some way. This metric matters to new businesses especially, as they need to create a steady flow of new clientele in order to stay afloat. Businesses need a healthy mix of loyal customers and new clients in order to balance out their sales chances.
4. Loyal Customers
Similarly, business owners must also look to how many loyal customers they’re currently courting at any given time. Measuring loyal customers versus new blood within a sales funnel can tell a business owner a lot about how their marketing strategies are going. More loyal customers than new ones? Current marketing strategies may need tweaking. More new than old? You aren’t offering enough value to stay.
5. Churn Rate
Finally, let’s end on a pretty heavy subject: customer loss. You likely won’t be able to keep every client that ever uses your services, and that’s okay. Your churn rate measures how many clients drop a service or product within a given period based on a percentage.
The newer the business, the more important their churn rate is. It’s vital that a new business understand just how many clients they’re receiving while also knowing how many are dropping off at the same time. A high churn rate means failure may be on the horizon.
Exceedion is an Indianapolis web design company that’s dedicated to helping our clients with their business needs. We hope you found this article helpful and would love to be a part of your success.