A lot of guides tend to talk about startup growth without first defining what this growth actually is. You see, while it is possible to tell that your business is doing good just based on your intuition, those who rely on this method often find themselves in a problem that they can’t fix. Why? Well, because when things start going south, they have no idea where the problem is and, therefore, how to fix it. That being said, here are five vital metrics you have to track when growing a startup.
The first and the most important metric for any business is the so-called sales revenue. The way in which you calculate this is fairly simple. First, you take the total amount of money that you make from your sales and then deduct from it the value of all the returned and undeliverable products. If there’s a problem in this field, there are two ways for you to improve it. First, you can increase the number of sales and second, you can improve the average value per sale. Needless to say, the simplest and the most effective way to do this is by focusing on your return customers.
Cost of customer acquisition
The next thing worth keeping in mind is the fact that the ROI of your marketing gets determined by the amount of money you spend on each and every single one of your customers. This means that the more customers you get, the more effective your campaign is and vice versa. In the era where marketing is one of the biggest expenses for each aspiring business, knowing the effectiveness of your strategy is probably the most important metric of them all.
The efficiency of your team
One of the hardest metrics to measure is the efficiency of your team. Just because you have the same equipment and the same number of employees as your competitors, it doesn’t mean that your team is capable to do the same amount of work in the same time period. Fortunately, there are more than a couple of ways to boost the efficiency of your team and the most reliable one is to invest in your leadership. Most business hubs have a plethora of options when it comes to courses and leadership mentor programs. For instance, if your business is located in NSW, you could easily find a reputable business coach in Sydney and enlist some of your managers (or yourself) there.
Qualified leads per month
According to the principle known as customer lifecycle, an average person needs to undergo several stages in order to become a paying customer. At first, they’re merely interested in your brand/products, then, they do some research until they’re finally ready and willing to make the first purchase. Nonetheless, it’s also important that you understand that not every person is going to become a customer. Those who have the best odds of doing so are called qualified leads. Knowing the exact (or at least approximate) number of qualified leads per month will help you avoid believing that your entire traffic is your potential customer base.
Lead to client conversion rate
In the end, it’s important that you understand that not every single one of qualified leads is going to become a customer either. In order to further clarify this, you need to know what your lead to client conversion rate is. The simplest, yet also the crudest way to measure this is to divide the number of new monthly leads with the number of new customers.
By relying on these metrics, you’ll find a simple, unbiased and reliable way of telling just how good your business is doing at any given moment. This is an invaluable asset that every aspiring entrepreneur needs to have on their disposal.