Key Performance Indicators (KPIs) are important metrics that every company should use in order to measure its performance and increase its growth.
Even though KPIs are vital, it’s also important to choose the right ones to measure, instead of just copying what everyone else is doing. Every business is unique, so choosing the KPIs starts with the strategic plan. The KPIs we’re going to present in this article are to be taken into consideration, but keep in mind to only choose the ones that fit your goals.
The first step is understanding them.
Key Performance Indicators that give you insights about your customers’ behavior
- Conversion rate – This is a metric that tells you what percent of your website’s visitors become actual customers. If you have a lot of visitors and a low conversion rate, then you need to find out what the problem is.
- Customer retention rate – It tells you if you have loyal customers or not. These are the people who are sure to come back for more because they were pleased with the experience they had with your company.
- Net promoter score – This also reflects whether or not customers had a great experience with your company. Moreover, it tells you if said customers are willing to recommend you to their friends.
- Customer profitability score – It’s good to acknowledge this metric because it shows you how much profit each customer brings you after you cut out all the costs you’ve put into attracting, converting and keeping them.
- Average revenue per customer – The average revenue shows you how much money your customers generated during a given period of time.
- Customer lifetime value – It is the net profit you make out of a customer for the entire time they’ve been buying your products/using your services.
Measuring the financial performance of your company
- Return on investment (ROI) – This shows you how much revenue you generate based on the investments you make in the company.
- Net profit – It’s the profit your company makes after all the expenses have been deducted.
- Revenue growth rate – It measures how quickly your company is growing in terms of income.
- Current ratio – This metric will tell you whether or not your business is capable of paying its bills. By constantly monitoring it, you will be able to spot any cash flow problems.
Measuring your marketing efforts
- Search Engine Rankings (using keywords) and click-through rate – It’s important to have your company’s website optimized with keywords (preferably long tail), so that people will find it on Google search results and also click on it.
- Page Views and Bounce Rate – It’s great to have a lot of visitors, but at the same time it’s not so good if you have a high bounce rate. It means that your visitors don’t spend too much time on your website and that you need to find out why.
- Market share – It defines the percentage of the market (in terms of revenue) that is attributed to a certain company. If your percentage is not that high, then you need to work on increasing your revenue through marketing efforts.
Track, measure, adjust, repeat
Key performance indicators are a gold mine for your business. These metrics will tell you what’s not working for your business and what aspects you need to improve.
Depending on your company’s objectives, you need to track those that are the most important for your business, since not every objective will require your attention.
As you’ve seen in the printscreen above, with Unity Reports you’re able to track the behavior of your customers, as well as their history with your company. If you want to see how it works and start measuring your business today, you can test out our fully featured demo.
Start measuring your business’s most important key performance indicators right now!