Business metrics are the kind of nit-picky little numbers that can seem like little more than busy work on their own but collect enough metrics and you can paint a remarkable picture of a company’s health or the performance of a specific initiative. A single number holds interesting information that may change a decision or spark an idea. A bunch of KPI could help you create a plan for long-term growth or stop a failing campaign before it drains your resources. In short, key business metrics are the tools every business uses (or should use, at least) to gauge the health of their company and measure progress toward important goals.
Strategic KPIs vs. Operational Metrics
Many business metrics help track progress. These metrics, also called strategic KPIs, are crucial because they act as quantifiable measurements of your organizational growth.
Operational metrics are like having your finger on the pulse of your business. These KPIs deliver information in real-time. You can quickly see if a campaign is about to take off or if one of your newly implemented systems is stumbling. By keep close tabs on operational metrics, you have the ability to pivot and problem solve before small problems turn into serious ones.
Examples of Financial Metrics
- Gross profit margin: The total amount of money made from sales once the cost of goods has been subtracted
- Net profit margin: The amount of profit that remains after costs of goods sold, operating expenses and other expenses such as taxes and processing fees have been deducted
- Current ratio: A representation of a company’s ability to cover its financial obligations over the course of a year (this serves as a solid look at the organization’s overall financial health)
Examples of Customer Service Metrics
- Number of new complaints/support tickets: How many new issues are coming in in a given time period
- Average resolution time: How long it takes to satisfactorily address a customer complaint
- Customer satisfaction score: How customers are rating the company’s service (usually the result of a survey or other feedback-generating tool)
Examples of Marketing Metrics
- Traffic-to-lead ratio: How much incoming traffic eventually converts into leads
- Cost per lead: How much each lead costs to generate
- Brand recall: The number or percentage of people who can remember your brand after being exposed to it as part of a marketing campaign
- Time on site: How long consumers spend on your website before clicking away
Examples of Sales Metrics
- Lead flow: The number of leads currently being worked on by the sales team
- Total sales volume: How much is being sold (usually represented in a dollar amount)
- Sales cycle length: How long it takes to go from lead to opportunity to close
- Average retention rate: How often customers make it through from lead to close (in other words, whether you’re losing too many leads during the sales process)
With those key business metrics examples in mind, check out this in-depth guide to business KPIs to learn more about how you can use metrics to reach your professional goals.