Track your Metrics for Massive Gains... #63

Adrian Dionisio - business737 owner
Apr 5, 2022
5 min read

Updated: Mar 26, 2024

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Anything that gets measured and watched will improve. This is not about being good at maths. It's simply about tracking the things that will make your business thrive.

What are most important metrics for your business? What really matters?

Track all of these things. These things are what matter most for making money.

Remember that measurement in and of itself produces results because it puts pressure on both you and your staff to perform and keeps the most important things top of mind.

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What does you business depend on?

Have some quiet time and think. What are the key factors that contribute to your business success? Yes of course paying customers, but what are the crucial processes that lead to the customer giving you their money?

These are the important things to track. It is straightforward. The better you get at these things, the more money you will make. So keep a track on these things. Examples could be;

Units produced
Leads Generated
Clients enrolled
Cost of goods sold

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Why track your metrics?

There are hundreds of different metrics because there are many types of businesses, with many different processes. It's about tracking what matters most to your business.

Tracking metrics makes running your business easier

A quick look key metrics makes it much easier to run your business. You can instantly tell how each area of your business is doing. You know where to invest your resources. You know the critical issues. You know where to focus on.

Tracking metrics immediately shows you the problems in your business

It allows you to recognise and fix problems earlier. When you keep an eye on your metrics you become familiar with the numbers. It is like when you track an investment. You get to know the numbers. When you are familiar with the numbers you soon notice any fluctuations and anything abnormal. This is very important. You will soon recognise any problems.

Tracking metrics improves the performance of employees

Metrics give employees a transparent scorecard. They tell them if they’re doing well or not. With access to metrics, you are able to set goals, and also hold people accountable for those goals.

You can effectively evaluate how your staff is doing. When they succeed at achieving performance targets, it improves the overall health of the business

Tracking Metrics Helps You Focus

By selecting and tracking certain metrics, you can ensure you focus on the right things.

Tracking metrics allows you to methodically improve

If you aren’t tracking a metric, how do you know if you’re improving? Tracking your metrics makes it much easier for you to grow a more successful business.

track your business performance
highlight specific areas that need improvement
identify what is working well
set specific and realistic goals
identify the need to target a particular area of your business
facilitate comparative analysis
help work towards shared goals
improve communications
ensure compliance
help identify problems

Important metrics for every business

Here are some of the most important metrics to track. They are typical across most businesses. It should give you an idea where to start

Profitability

Understanding the revenues, costs, assets etc implications that impact your business's profitability. Keep a constant eye on these because they reflect your business's ability to generate earnings. They represent the general health of your business.

The formula to calculate profit is: Total Revenue - Total Expenses = Profit

Return On Investment

Measure profits in relation to investment. This gives a perspective of what is happening and where you are going.

Tracking ROI will also provide you with crucial intel into which investment opportunities have the most value.

ROI = (gain from investment – cost of investment) / cost of investment *100%

Cash Flow

Tracking cash flow allows you to adapt quickly to unexpected changes out of your control. It can prepare you for supply chain delays along with a multitude of other issues that can come from not having your cash flow intact such as not being able to pay wages, inventory, debts, suppliers etc

Customer Acquisition Cost

This is the cost of convincing a potential customer to buy a product or service. To calculate CAC, you add up the costs associated with acquiring new customers and then divide that amount by the number of customers you acquired.

Advertising costs
Cost of your marketing team
Cost of your sales team
Creative costs
Technical costs
Publishing costs
Production costs
Inventory upkeep

Businesses use this metric to determine their profitability because it compares the amount of money they spend on attracting customers against the number of customers they actually gained. It helps measure the return on investment of efforts to grow their clientele.

CAC is a key business metric. Many companies fail because they do not fully understanding their customer acquisition cost. You want your CAC to clearly show that marketing and advertising are paying for themselves. If they aren’t then things need to change. Analyse the ROI from your different engagement channels (social media, SMS, email, etc.) to identify what’s working and what isn’t.

On-Time Project Delivery

You need to know and track how long it takes to get work done.

Understand and improve your own processes.

Order Fulfilment

Do you deliver reliable results on a consistent basis? If not you won't retain customers, get referral business nor positive feedback.

Deliver better than your competitors and always keep your clients involved along the way

Website Traffic

This is especially important for e-commerce brands. It will help you understand your sales trends, marketing efforts, lead generation activities and so on.

Customer Lifetime Value

CLV will help you find balance in terms of short-term and long-term marketing goals and demonstrate a better understanding of financial return on your investments. CLV encourages better decision making by teaching marketers to spend less time acquiring customers with lower value.

Percentage Of Repeat Customers

A great indicator that they find value in your product and services.

Employee Performance

Employee performance metrics are key to tracking how well employees are carrying out their job. What methods do you have to measure the productivity and efficiency of employees? Tracking employee performance metrics benefit both the business and the employee. Examples include