In the beginning, most small business owners spend their time obsessing over sales and revenue. And that makes sense—your business’s sustainability is tied to your financial growth. But as your company expands, there are many other factors that can help you measure success and stay on track.
As you focus on building a brand and attracting new customers, it’s important to set KPIs, or key performance metrics, that help you stay on track and spot potential issues before they occur. Some are more obvious—product demand, profit margin, overall sales—while others can be a little more difficult to track, but they’re all important to ensure overall sustainability. If you are hunting for new ways to track growth, here are five KPIs you may not be tracking, but should.
In the age of the Internet, it’s never been easier to get a clear picture of how your customers are feeling. Platforms like Yelp and Foursquare have opened the floodgate for customers to give an honest, unfiltered opinion about their experience at your establishment. And sure, reading negative reviews can be difficult, but if you’re willing to dig through the mud, you may be able to find ways to improve.
As you track customer satisfaction, note how your reviews are doing overall. Keep an eye on your overall total reviews as well as your ratings and feedback. In the age of the internet, many consumers are review-cetric. The more (and better) reviews you have, the more quality customers you’ll attract. Go the extra mile and interact with your customers by responding to reviews (good or bad) and show that you truly care about the quality of your service.
Of course, tracking customer satisfaction is not limited to online reviews. You may consider sending out surveys or offering feedback cards for direct feedback from your clients. One popular way to track customer satisfaction is through a Net Promoter Score®. This score is measured by asking customers one question: “On a scale of one to ten, how likely are you to suggest us to a friend, and why?” Answers are then converted to scores, which allow you to rank—and easily track—your customer’s overall happiness in your business.
A survey conducted by Net Impact reported that 88% of employees feel that a positive workplace environment is important or even essential. If you’re a solopreneur, this isn’t a metric you can track, but if you have a staff—even a small one—it’s important to make sure they’re happy and engaged.
In a small business, every employee is crucial to success and happier employees will work more efficiently. Employee happiness has become a bit of a science in recent years, but there are easy ways to ensure you’re keeping your team satisfied.
There are many programs designed specifically to survey and track your team’s happiness. The Celpax device allows you to measure overall morale and is easy enough to encourage all employees to participate. TinyPulse is another feedback tool that helps a company improve overall culture and employee happiness.
Another key metric is employee retention. Keep a database of all of your employees, when they started, and the position that they were hired to fill. The average amount of time that an employee stays in a position greatly varies between industries, but as your company works to improve culture, you should see that number go up.
Social Media Presence
When it comes to social media, it’s not just the amount of followers you compile that matters— the level to which your followers are interacting with you is just as important. Work towards improving overall engagement metrics with applications such as Hootsuite that allow you to schedule posts for times when users are most active online to ensure you’re reaching your followers the best way possible.
Almost every social media platform offers an easy way for businesses to track their activity online. Some key metrics to pay attention to and track are follower count, unfollower rate, clicks per post, audience growth rate, and conversion. The higher your conversion rate, the better.
It may seem like landing customers is the hard part, but getting them to stick around can be just as difficult and just as important. Loyalty is defined by customers who have a preference for your business—and keep coming back. In order to track loyalty, and work towards improving it, consider implementing a loyalty program such as Belly. Not only will this encourage your customers to return and rack up reward points, it also allows you to track just how often they’re coming back.
Plus, the more loyal a customer is, the more likely he or she is to refer your business to friends and family. A referral program is another great way to encourage customers to recommend your business while allowing you to track how many actually do.
Finally, if you own an e-commerce business, a metric such as repeat purchase rate is a great way to track whether your customers buy—and buy again. A lot goes into improving this metric, but it’s key to keeping your business growing.
Customer value and acquisition cost
It addition to your customers’ happiness and loyalty, consider how valuable each customer is and how much it costs to acquire each customer. The LTV, or lifetime value of your customer is important because not all customers are created equally—and some customers may not be worth your money pursuing. This calculation helps you estimate the total revenue you can expect over the course of your business relationship with a specific client. This metric in tandem with CAC, or the cost of customer acquisition, can measure how much time and money you spend landing each client and whether or not that client is worth the output.
As your business grows, these two numbers can be key to your success. The lower your CAC and the higher your LTV, the better your business is set up for long term growth.
As you scale your business, it’s important not to lose sight of the financials—metrics such as revenue, profit, sales and cash flow are all key to tracking your overall success. But as you grow, it’s a good idea to look beyond just your bank account and pay attention to the other factors that can predict your sustainability.
Meredith Wood is the Editor-in-Chief at Fundera, an online marketplace for small business loans that matches business owners with the best funding providers for their business. Prior to Fundera, Meredith was the CCO at Funding Gates. Meredith is a resident Finance Advisor on American Express OPEN Forum and an avid business writer. Her advice consistently appears on such sites as Yahoo!, Fox Business, Amex OPEN, AllBusiness, and many more. Meredith is also the Senior Financial and B2B Correspondent for AlleyWire.