“How can I increase my sales revenue?” is the number one question asked by small business owners. The answer lies in sales metrics – but unfortunately, many small business owners are unable to come up with relevant measurable sales metrics, which chart current trends and give them an incredible opportunity to make positive changes.
Key sales metrics will give you the data you need to upgrade your approach. By the way, it’s hard to fix something if you don’t know it’s broken! This is whcy we work on this as part of Phase 1 of our Digital Transformation Program.
In the meantime here are some key sales metrics to consider in any business:
1. Revenue per customer. This metric looks at revenue from an individual customer in the current year and compares it with past history (one or more years). This helps you upgrade your customer retention practices and increase repeat business.
2. Number of purchases per customer. This metric measures the buying frequency in the last year. It helps you target advertising campaigns to an individual customer’s purchasing habits, and to improve your customer retention strategies.
3. Customer Lifetime Value. This metric is the total projected revenue from each client. It’s a projection, of course, but helps you create a marketing budget and strategy to keep return business high.
4. Purchase frequency. Most customers (up to 75%) order only once from an online retailer. This metric helps you get them back to make additional purchases.
5. Frequency of re-orders. This metric shows how fast people comeback to YOU to purchase more. If this metric is associated with a particular product, it will help you create a marketing campaign based on customer’s buying habits.
6. Recency of purchases. This metric measures the number of days/weeks/months/years since the customer’s last purchase. From this, you can easily spot buying trends and target your marketing accordingly. You can also identify inactive customers and create a marketing campaign to reach out to them and reactivate them.
7. Sales and transaction trends. This metric tracks trends daily, monthly, quarterly and yearly. This way, you can measure current performance against past performance, and make adjustments to your strategies to ensure future growth.
8. New customers. This sales metric doesn’t chart existing customers, as the seven above; it measures your customer acquisition rate, and therefore gives you a clear picture of how the customer acquisition marketing strategy is performing.
9. Total sales by time period. Moving beyond the individual customer to the big picture, this metric tracks your sales during a calendar period.
10. Sales by product or service. This metric helps you track which products or services are bringing in revenue and which are gathering dust on the shelves. This helps you streamline, and devote more effort to promoting what is selling and less effort on what is not. It can also mean that your offerings may require upgrades, new versions, etc. – and if a product or service is doing exceptionally well, this metric will help you keep up with demand.
11. Sales by lead source. This metric tracks where your sales come from so you can use your advertising dollars wisely, and helps you spot advertising trends.
12. New vs. Returning customer sales. This metric tracks the percentage of sales that come from new customers versus existing customers. Optimally, you want both – a steady stream of new customers, and happy repeat customers.
13. Cost Per Acquisition. This metric tracks the performance of your marketing and helps you to establish how much is costs you to acquire a new customer. This is an incredibly important sales/marketing metric. Why? Because if you know your Cost Per new customer Acquisition your marketing budget can just about be infinite.
These metrics point to the root of your sales failures and successes. Sales is a numbers game, so to increase your ROI, you need sales metrics to identify what’s working and what isn’t. It’s a powerful tool that will significantly increase your sales and bottom line! Set yourself up with a sales metric dashboard, keep it visual, it’ll help you, your sales & marketing team stay accountable to your businesses revenue success.
Now it’s your turn, are there any other metrics you use we should mention? Or have you got any other questions about sales strategies or metrics? Let us know by leaving a comment and remember if you liked this article and found it helpful, sharing is caring!