Measures of Success
Various KPIs / Metrics that can be used to measure the success of your business
What are measures of success?
If you don’t know what success looks like, how will you know when you’ve got there? And more importantly, how can you
celebrate?
• Knowing where you are going is one thing – a Business Vision is extremely important.• Having goals that you can measure at definite points in time, means that you can
track where you are at with your journey & adjust your strategies & tactics as necessary.
• This document has been put together to get you thinking about how you measure success in the various areas of your business:– Financial– Customer Service– Human Resources– Operational– Sales– Marketing
• Pick the areas in your business that are relevant for measurement and report on them regularly (diarise dates of measurement)
• Note trends and take action if necessary• Most importantly, celebrate success – both small & large…. It keeps you & the team
motivated on the journey towards that Vision!
Financial measures of success
Measure Description How is it measured?
Notes
Turnover (Gross Income)
The amount of revenue taken in by a business in a particular period
Usually annually by looking at the business accounts – whether that be in the calendar, fiscal or tax year
Gross Profit – overall and by product
Overall – a business’ turnover minus its cost of goods or services soldBy product – the amount that a product is sold for minus the cost of that product
Usually annually by looking at the business accounts – Revenue minus costs of goods (COGs)
Net Profit (aka the “Bottom Line”)
A business’ total revenue minus its total expenses
Usually annually by looking at the business accounts – Revenue minus total business expenses (including COGs)
Expenses costs An outflow of money for an item or service for the business
As a % of income
Financial measures of success
Measure Description How is it measured?
Notes
Breakeven The amount of income required to cover all of your expenses
$ income - $ expenses & COGS = $0
Size of debt Money owed by the business to creditors
As an absolute figure or a % of assets
Cashflow – forward forecasting
The amount of cash generated and used by a business over a given period. Real cash the business has available to run operations, cover liabilities and expand
Actual cash received and spent against what is recorded
Top selling product or service by revenue
The most revenue gained from the sale of a particular product or services in a business – as compared to other products/services sold
The price of products against the services sold multiplied by the amount of products and/or services sold
Financial measures of success
Measure Description How is it measured?
Notes
Top selling product or service by margin
If margin is the difference between a product’s (or service’s) selling price and the cost of production, then this will be the product/service with the greatest margin per sale.
Comparison of product sale price against cost of production of product
Chargeable vs non-chargeable hours
Chargeable hours are spent directly with the client or working on client projectsNon-chargeable hours do not generate revenue yet are necessary to keep the business running smoothly
Chargeable hours are recorded and exchanged for a specified amount of moneyNon-chargeable hours are hours that the clients are not charged for. These must still be recorded to help you understand your true hourly rate
The goal is to establish a fee structure that factors in the non-chargeable hours ie. Clients pay for those non-chargeable hours but do not see those hours on their invoices
Financial measures of success
Measure Description How is it measured?
Notes
Breakeven The amount of income required to cover all of your expenses
$ income - $ expenses & COGS = $0
Size of debt The amount of debt the company currently holds
As an absolute figure or a % of assets
Cashflow – forward forecasting
The timing and amount of cash flowing into and out of a company over a specific period.
Actual receiving of cash into the company account (not credits or invoicing) against loans and bills to be paid (including timing of payments)
Sales measures of success
Measure Description How is it measured?
Notes
Number of customers Number of customers of business
Actual amount of customers buying products or services from the business
Income per customer The average amount of income brought into the business by a customer
Actual amount - total business income divided by number of customers
Market share The % of a market’s total sales earned by a particular business over a specified time period
Business’ sales divided by total market’s sales over the same period
Where do leads come from? Lead generation
Lead = person that has the authority and budget to purchase a product or service.Lead generation = the methods for generating consumer interest into products or services of a business
Recording the method by which a customer came to purchase a product or service from the companyUse Google analytics for online lead generation
Sales measures of success
Measure Description How is it measured?
Notes
Conversion rates – from lead to opportunity
The act of converting a lead into a business opportunity
Recording marketing/sales process
Conversion rate – from opportunity to proposal
The act of converting an opportunity into a business proposal
Recording marketing/sales process
Conversion rate – from proposal to sale
The act of converting a business proposal into a sale. Online, the proportion of visitors to a website who take action to go beyond a casual content view, as a result of marketing or advertising
Online:Website visitorsAbandoned carts vs completed salesPhysical:Number of physical sales or contracts signed against pipeline
Number of valuable meetings
BVOM = the business value of meetings. A successful meeting is a satisfaction of meeting or event objectives (often non-financial)
Set down clear meeting objectives and record if they are met. Actual amount.
Human resources measures of success
Measure Description How is it measured?
Notes
Average length of tenure
The average length that an employee of the business remains employed by the company
Recording employment figures and getting average length of tenure as time goes on
Retention of staff / staff turnover
How often staff leave the business over a particular period of time
Recording employment figures
Staff satisfaction / engagement
How happy the employees are
Formal engagement surveyBest Places to Work Survey
Spend on PGs How much the business spends on personal grievances for unjustified dismissal for example
Actual amount from accounts
Place to work How many people applying for jobs or sending in CV
Record amounts in HRBest Places to Work Survey
Operational measures of success
Measure Description How is it measured?
Notes
Customer delivery times / SLA performance
The degree to which the business is able to serve its customers within the promised delivery time
Ask:1. Is the customer
getting what it wants when it wants it or when advised?
2. Do the supplier and customer agree on how on-time delivery is measured? Any variations on delivery must be agreed to. Date of delivery
3. The number of line items on order
Ensure there is a a clear up-front agreement with the customer allowing for variations to amounts delivered and time frames for delivery, you need to be speaking the same language
Time spent on job vs time quoted
Does the business quote accurately for the jobs it is doing for the customer
Quotes vs actual hours taken to perform job
Operational measures of success
Measure Description How is it measured?
Notes
Defect rate Number of orders supplied to customers that have defects in a certain period of time
Number of defective orders Total number of orders-during a given time period
Customer service measures of success
Measure Description How is it measured?
Notes
Number of customer referrals
Satisfied customers that refer other customers to the business
Recording of where the customer originated from
Ensure that you are recording referrals
Number of customer complaints
Number of customers unhappy with the business or product
Process for customer complaints recorded
Customer engagement
The engagement of customer with the business or its brand
Recording of sales/marketing process and actions taken by customers
Time taken to respond to customer enquiries
X = the difference between the date that the customer enquires with the business and the date the business responds to the customer
Customer retention How many customers come back to the business for repeat purchase of services or products
Actual amount Recording by sales/marketing staff.Online: Client account reviews
Marketing measures of success
Measure Description How is it measured?
Notes
Progress against strategy
LTV Lifetime value of a customer (present value of the future cash flows attributed to the customer during their entire relationship with the customer)
Average order total x average number of purchases in a year x average retention time in years
ROI Return on Investment – evaluates the efficience of an investment
(Gain from Investment – Cost of Investment) divided by Cost of Investment
CPR Cost per response (or click throughs)
Actual number of people clicking through on call to action – cost of an ad divided by the no. of people who click on it)
Marketing measures of success
Measure Description How is it measured?
Notes
CPA Cost per acquisition (cost per sale)
Total campaign cost divided by amount of conversions/sales
CPE Cost per enquiry Total campaign cost divided by the total enquiries
Unprompted brand awareness
Where a large number of people around 1-2k are asked to name brands/businesses that they have heard of with no hints from the interviewer
Actual number through survey
Prompted brand awareness
Where a person is asked whether they know of a certain brand/business
Actual number through survey
Customer engagement
Engagement of customers with a brand or business
Marketing measures of success
Measure Description How is it measured?
Notes
Competitive marketplace
Where large numbers of producers compete with each other to satisfy the needs of of consumers
Market share (sales) against total industry sales
Brand preference or Net Promoter Score
Which brands are preferred under assumptions of equality in price and availabilityNet Promoter Score divides a business’ customers into: 1. Promoters 2. Passives, and 3. Detractors
- Survey
- NPS – take the percentage of customers that are Promoters and subtract the percentage who are Detractors (also survey)
Digital measures of success - website
Measure Description How is it measured?
Notes
Conversion rate to goals
Actions that website visitors can perform can be tracked by setting goals through Google analytics
Google Analytics goal setting and results
Key word positions in Google
Where do you sit in Google for the key phrases & search terms that your customers use?
Using the private browsing or incognito mode of your browser or specialised software – Semalt, Hubspot etc.
Needs to be unbiased. Google remembers your preferences and where you have been and serves up results accordingly
Branded to no-branded keywords
Non-branded keyword does not contain the website’s brand name (website obtains visitors who are not familiar with the brand). Branded keyword indicates that a searcher knows what website they are looking for
Google analytics (Traffic source keywords report – filter your brand keyword by excluding your brand name). Then focus on increasing the rankings of keywords that convert visitors best to your site
If all you’re getting is branded search traffic, you’ll want to conduct a technical and content SEO audit of your site as something is probably not in order. A well optimized site (unless it’s a brand with strong marketing prowess or has broad terms in their name) should see a majority of traffic from non-branded terms
Digital measures of success - website
Measure Description How is it measured?
Notes
Conversion Funnel
E-commerce: the journey a consumer takes through an internet advertising or search system, to the website and completing a sale (the numbers of visitors will decrease at each step of the process)Physical sale: Enquiry through to purchase complete or contract signed
Google analytics
Visitor demographics
Who uses your website eg. gender, age, income, where they live and what device they are using
Google analytics
Devices & operating systems used
What devices site visitors are using to access your website
Google Analytics
Digital measures of success - website
Measure Description How is it measured?
Notes
Referrals Visits from sources outside Google’s search engine eg. A link from a hyperlink on one site goes directly to another site (social media posts linking back to your site), or, another search engine for eg.
Google Analytics
Top visited pages Pages that have the most visits
Google Analytics
Calls to unique online 0800 number
Can be tracked as a specific goal through Google Analytics
Most popular phrases
Unique pages on site How many pages of content does your site have?
Site map Important for Google SEO – content that is relevant & useful & that is added to regularly
Digital measures of success - website
Measure Description How is it measured?
Notes
Bounce rates % of visitors who visit site and leave rather than continuing to view other pages within the site
Google Analytics
• Does tracking the pages where more website visitors exit the site tell you the pages don’t work?
• Or that they were perfect and the customer found what they were looking for?
Returning vs new visitors
Returning = people who have visited website come back again
Google Analytics
• If lots of people keep returning, is it because they repeatedly can’t find what they’re looking for?
• Or, that the content was spot on?
Page views The number of pages viewed or clicked on the site during the given time
Google Analytics
• Is the number of views high because the navigation is frustrating?
• If you have great navigation, and low page views, people may have found the info they were looking for quickly, then nipped off to a cheaper competitor
• By tracking page views, what type of behaviour are you rewarding?
Digital measures of success - website
Measure Description How is it measured?
Notes
Number of unique visits to website
Number of times distinct people visit the website
Google Analytics
• By tracking visits what are you really tracking?
• Requests for data from the server?• Number of pages viewed?
Visit duration Length of time a visitor spends viewing the website
Google Analytics
• Similar to page views – was it a short visit because the found what they needed and left, or because they couldn’t find what they wanted quickly enough, so they left?
• Conversely, were they there for a long time because they were really engaged, or because they couldn’t find what they were looking for?
Digital measures of success – Goals in Google Analytics
Measure Description How is it measured?
Notes
Filling in a contact us form
Where a visitor fills in a form as a call to action
Google goals
Downloading a file Visitor downloads from the website
Google Goals
Watching a video Number of visitors who viewed a video you have uploaded to your website
Google Goals
Purchasing a product
Number of people purchasing from your website
Google Goals
Purchasing a number of products
Measured by value or by quantity
Internal business records
Average size of basket
The average amount spent by a customer in a single transaction
Google Analytics. Total amount of sales against number of sales
Spending a certain amount of time on a particular page
The average amount of time a visitor will spend browsing or reading a certain page
Google Analytics
Digital measures of success - email
Measure Description How is it measured? Notes
Click through rates
Number of people who click through from the email to your website or landing page
Click throughs against the number of emails delivered
Open rate The number of people who opened your email
Google Analytics Be aware that an Outlook ‘preview’ is considered an ‘open’, it doesn’t however mean the customer has read it
Unsubscribes
The number of people who clicked on unsubscribe option at the bottom of the email
Email marketing tool
Shares Unit of capital in a company
Company register
Number of subscribers
No of people owning shares in a company
Company register
Digital measures of success – social media
Measure Description How is it measured? Notes
Potential Reach
How many people you have the potential to reach
Likes, followers, fans, subscribers etc.
Actual Reach How many people the business actually reaches through its marketing
Metrics on Social media, analytics
Engagement & Interaction
How may repsonses, likes etc.. You get to your marketing
Metrics on Social media, analytics
Social listening
How many times your brand is talked about on social media
Metrics on Social media, analytics
Time to respond
How long it takes to to reply to comments on Social Media
Metrics on Social media, analytics
Digital measures of success – paid online advertising
Measure Description How is it measured? Notes
Reach Impressions Number of impressions or serve ups
Click through rates from advertising
From a banner or Google Adword
Click throughs against the number of banner or ad impressions
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Icehouse Community,Level 4, 125 St Georges Bay Road, Parnell PO Box 9884, Newmarket
www.ventell.co.nz
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