Nataliya Andreychuk is the CEO of Viseven. She is a leading digital transformation evangelist for the pharma and life sciences industries.
Sales have traditionally served as the major metric for measuring success. Although certainly important, trying to hit a specific revenue figure while disregarding other indicators may not bring you long-term financial health. With the sales-driven mindset, businesses often miss opportunities for innovation or fail to ensure scalable growth. You also run the risk of getting tunnel vision, where serious threats, like customer dissatisfaction, go unnoticed, especially when the initial revenue figures look optimistic.
Here is an overview of some other key metrics you can use to measure the success of your business.
Customer Engagement
Even if your leads easily turn into customers, it is still essential to implement a robust strategy to keep them engaged. Having this plan in place helps you build emotional connections with your customers, leading to a loyal customer base that keeps choosing your products even amid price fluctuations.
Engagement metrics—like comments, likes and shares—show how well you connect with customers on different platforms. In addition, keep an eye on how long users stay on your website and the bounce rate (the percentage of visitors who leave after only viewing one page).
Your churn rate is another important consideration. This metric shows the rate at which customers cease using your product. A high churn rate is a big red flag signaling that there might be some problems with your user experience, customer support, competitive edge, you name it.
Net Revenue
Gross sales revenue is meaningful, but it doesn’t take into account the expenses involved with bringing your product to the market. By contrast, net revenue sheds light on the total sales profit of your business.
Track this metric on a product-by-product basis to discern which products are successful and which are not. It is worth noting that setting net revenue goals for all your products is an effective strategy for evaluating progress along the way.
Client Retention
Finding new customers is often a much more challenging endeavor than keeping existing clients satisfied. The logic is quite simple: Your current customers know your product and all its benefits.
The issue with getting new customers is that it takes a bit of time and elbow grease to find them in the first place. Afterward, you will have to search for different ways to convince them to purchase your products. Once they have tested your offering, they are likely to compare performance, support, price and so on. If they notice the lack of competitive advantage, chances are they will either go back to their previous supplier or keep searching for something new.
The statistics corroborate this point. According to research, the likelihood of selling a product to current customers is 60% to 70%, while the chances of a new customer making a purchase are only 5% to 20%.
That said, it is important to track the number of customers who repeatedly buy your products or pay for subscriptions. This is useful when allocating resources for product development and working on new offerings.
Understanding your customer lifetime value (CLV), which represents the net profit a client contributes over their lifetime, is a good way to assess your long-term revenue potential. This metric goes beyond mere revenue, considering the costs of customer acquisition and service. CLV helps you identify your most lucrative customers and tailor your marketing strategies both before and after sales to ensure their ongoing satisfaction.
Customer And Employee Satisfaction
While feedback is hard to quantify and thus can hardly be perceived as a metric, it is increasingly important for measuring the success of a project. Rates and ratios do not always provide a comprehensive picture of how your processes are implemented, what might be lacking in your product or the reasons behind a decline in sales during the last quarter.
Both your employees and your customers can be the sources of valuable feedback. Survey your company’s departments to identify aspects that are no longer serving your business, or to understand your team’s feelings about organizational changes. Also, seek your customers’ opinions on things like price, product features and customer service. These tactics will not only highlight areas for improvement but also demonstrate to your employees and clients that you value and care for them.
If you prefer speaking the language of numbers, you can calculate your net promoter score (NPS) to understand customer satisfaction levels. You can dig for specific reasons behind this score by conducting various surveys.
Gauging business success is not solely about sales metrics. To get a helicopter view of the state of your business, embrace a more holistic approach that considers employee and customer satisfaction, net revenue, customer engagement and retention rates. Creating a comprehensive scorecard that involves a variety of qualitative and quantitative indicators can help you make more informed decisions that drive long-term sustainable success.
Forbes Agency Council is an invitation-only community for executives in successful public relations, media strategy, creative and advertising agencies. Do I qualify?
