If you want your business to generate sales consistently, you better know which marketing sales and activities genuinely drive your business’s success and how to measure your numbers correctly.
The fastest way to understand your numbers is where KPIs come into play. KPI stands for Key Performance Indicator.
Every company and industry has its own. If you expect to compete effectively, learning why each KPI is important and what levers you can pull to better your business can often be the difference between success and failure.
For example, you may want to consider tracking “lead response time” or how quickly your company responds to a potential customer’s request for additional information. You could measure the “rate of contact” if your business does outbound prospecting. Alternatively, you may want to keep track of the “open rates” and “click-through rates” of your email marketing campaigns.
There are a couple of things to keep in mind, though. You do not want to measure something just for the sake of having something to measure. You need to understand how what you are measuring affects your success or failure.
This doesn’t mean whether or not you can explain it to someone. You need to be able to prove it with numbers. Even then, you can run the risk of the correlation of your KPI and success being coincidental.
This is why identifying your accurate KPIs, in the beginning, may be an experiment of trial and error. The next thing to remember is just because you can measure something doesn’t mean you should. Try to limit the number of KPIs you are monitoring to essential ones.
If you begin tracking too many, they will create noise and take away from your ability to analyze the health of your business.
Some examples of key performance indicators for your finance team are Revenue per Customer, Gross Profit Margin, Monthly Recurring Revenue, and Revenue per Customer.
Some examples of key performance indicators for your marketing team are
- Traffic to Lead Ratio
- Cost per Lead
- Click-thru rates of various campaigns
- Lead to customer conversions
- Lifetime value of customer
- Frequency of purchase per customer
- Average transaction value per customer
Some examples of key performance indicators for your sales team are
- Opportunity to Win Ratio
- Total Sales Volume
- Discounts Applied / Margin Retained
- Sales Cycle Length
A famous quote from Peter Drucker states, “What gets measured, get improved.”
If you develop the habit of measuring what you expect from your business and always understanding your numbers, you can strategically find multiple ways to generate sales quickly.
If you would like help to generate sales quickly, we invite you to book a FREE Quick Wins Growth Session!