How to Measure Your Company's Success

If you can't measure it, you can't manage it and therefore not grow it. 

You probably have some ambitious growth goals you want to hit this year, and that is great.

Problem is trying to influence that significant bottom line number at the end of the year especially if it is still so far away. Today I want to show you how you can influence your end of year results by just focusing on some key metrics throughout the year. 

These metrics are sales and marketing focused and provide a dashboard for you and your team. 

So what numbers have a direct influence over your end of year revenue goal? 

I have broken down the metrics to represent your customer lifecycle from acquisition to activation, revenue and retention. 

 Life Time Value (LTV) - Average Revenue per User (ARPU) - Trial to sales conversion - Customer Acquisition Cost (CAC) 

I'm going to start with revenue, without it your business doesn't exist. The two key metrics that are fundamental to your dashboard are the lifetime value (LTV) of your customers and the average revenue per user (ARPU). 

Lifetime value of a customer will help you to establish the average value your user will bring over her life span as a customer with you. Most customers not only purchase from you once but on repeat. Whether that is through return business or a recurring fee, the number will help you to figure out how much you can afford to spend on acquiring these customers. 

ARPU is a great metric to track a company's revenue generation capability and growth at the per-customer level. It gives you a quick understanding of the impact you can have by acquiring new customers or increasing your prices. If you have 10000 users @ an ARPU of $500 = $5,000,000 in revenue. To increase your revenue by $1 million, you could now onboard additional 2,000 users or increase your average revenue per user by $100. While there is no right or wrong answer, a combination of the two tactics might seem easier than increasing the customer base by 20%. 

If we step up the funnel, the next part would be to look at the number of free trials/ demos you get on a weekly/ monthly basis. If you currently get 1000 demos per month and close 30% of these, that leads to 300 sales per month. 

Once you have this ratio, you can improve it by increasing the number of demos/free trials or your team needs to become better at closing sales. 

The awareness metrics. What you look to measure here is finding the channels (PR, SEO, SEM, SOCIAL, BLOGS, etc.) that bring you the highest number of conversions for the lowest cost. Map out your biggest channels and calculate the cost of acquisition per user/ customer (CAC). Your CAC will help you identify where you should focus your advertising and marketing spend. 

These are just some key metrics that you should measure regularly and will help you to stay on top of your sales and marketing efforts. There are many more metrics and depending on your product, industry and maturity of business should also be considered.