How well is your business really doing? These key performance indicators can give you insight into how you are doing and highlight some areas where improvement is needed
It’s easy to get overwhelmed by the sheer amount of information that can be tracked; limiting yourself to a few key performance indicators can help you hit the highlights without getting bogged down in the data. You could spend all day evaluating your data, but tracking these key indicators over time can help you build your business.
Return on your Investment
Even if you are using inbound techniques, you are spending time and money marketing to your customer. What is your ROI – and are you getting enough return on your marketing investment for each of your chosen methods. The amount of money you spend to acquire a lead (via paid advertising, direct advertising and other methods) should also be considered as you take a look at your overall ROI. The money you spend to acquire a customer can vary wildly, so knowing which methods are performing best helps you correctly position your marketing efforts to get the best possible results for the least amount of money.
Cost per Lead
It’s important to understand your Cost per Lead, or CPL, for every method you use to attract prospects. The channel that costs the most may not be the one that is performing the best with your particular target. Your CPL figure can reveal how effective your marketing efforts are and help you determine if you are spending your advertising dollars in the right place. You have a limited amount to spend on promoting your business, and your CPL figure can help you weed out the channels and methods that resonate most with your target prospects.
Employee productivity is about more than the number of widgets an employee can create in an hour or the number of tasks that a team can complete. Tasks need to be completed efficiently and well to matter – the worker who creates your product faster than anyone else isn’t helping your business if his items consistently fail your quality control inspections or trigger complaints.
Production line employees may be the easiest to track and evaluate, but paying attention to the productivity of your sales team and even your IT staff can help you spot signs of waste and areas that could be addressed. Sales team members with low numbers could be poor closers – or you could have too many reps assigned to one area; tracking productivity over time can help ensure you are employing the correct number of people and that you have the best possible workers on your team.
Depending on your industry, it could cost you up to 20% of an employee’s annual salary to replace them, so high employee turnover is more than an inconvenience, it could significantly damage your bottom line as well. Tracking retention and understanding the points in your employment process that are causing problems can help you improve your overall culture and boost your retention rates. You could discover problems with your hiring process, onboarding or even your corporate culture itself, so paying attention to employee retention could help you create a better working environment for everyone.
Where are people coming from – and how long are they staying? According to Forbes, a look at the analytics for your website can reveal some valuable information about the buying process. Tracking your number of visitors (and where they come from), your bounce rate and your conversion rate can help you determine how effective your website is at converting leads and getting results. This information will also help you track your ROI on your marketing efforts, as outlined above. At the very least, tracking your site’s effectiveness gives you an idea of how well your online efforts are performing and lets you know if you need to invest more time and energy into your site.
Paying attention to your analytics and what you pay to acquire leads and customers – and to the way your business works internally can help you identify areas that could be improved. In some cases, reviewing and tracking these key performance metrics can identify what you are doing right and help you make more choices that further support your goals.
Posted by Sarah Prokopchak, Jr Account Executive at initiate-it, a digital first, full-service agency in Richmond, Virginia. Sarah has been working with initiate-it for over three years on a variety of client accounts including Sandler and VCU Health.