Know Your Company's KPIs
"Key performance indicators" let you know whether or not your business is on track for success. Operating a business without KPIs is like piloting a plane without instruments. KPIs shine a light on performance and reveal which areas in your business need attention.
There are scores of KPIs, and not all, or even most of them, will be relevant for your business. The key is to learn which ones will give you a snapshot of your company's health and to understand how best to use them. Following are some notable examples.
Key Financial Metrics
- Revenue growth rate tells you the rate at which you are increasing your company's income.
- Net profit is income minus expenses.
- Net profit margin is the percentage of your revenue that is net profit.
- Gross profit margin is the percentage of your revenue that is gross profit — profit generated for each sales dollar.
Understanding Your Customers
- Customer profitability score gives you a window into how much profit individual customers bring to your business after deducting the costs of attracting and keeping them happy through advertising and customer services.
- Conversion rate indicates how well you are able to translate inquiries, sales calls and Web page views into paying customers.
- Relative market share shows how big a slice of the pie you've got compared with competitors in the same market.
Understanding Your Employees
- Staff advocacy score indicates whether your staff considers your company a good one to work for.
- Employee engagement level looks at whether your employees' behavior contributes to the business's overall goals.
To get a better handle on your business, you need to ensure that you're going in the right direction. Give us a call today and we'll review which metrics are the most important for your business as well as how to best use them to create an even more profitable company.