Measures of Success

Various KPIs / Metrics that can be used to measure the success of

your business

What are measures of success?If you don’t know what success looks like, how will you know when you’ve got there? And more importantly, how can you celebrate?

• Knowing where you are going is one thing – a Business Vision is extremely important.• Having goals that you can measure at definite points in time, means that you can track

where you are at with your journey & adjust your strategies & tactics as necessary.

• This document has been put together to get you thinking about how you measure success in the various areas of your business:– Financial– Customer Service– Human Resources– Operational– Sales– Marketing

• Pick the areas in your business that are relevant for measurement and report on them regularly (diarise dates of measurement)

• Note trends and take action if necessary• Most importantly, celebrate success – both small & large…. It keeps you & the team

motivated on the journey towards that Vision!

Financial measures of successMeasure Description How is it measured? Notes

Turnover (Gross Income)

The amount of revenue taken in by a business in a particular period

Usually annually by looking at the business accounts – whether that be in the calendar, fiscal or tax year

Gross Profit – overalland by product

Overall – a business’ turnover minus its cost of goods or services soldBy product – the amount that a product is sold for minus the cost of that product

Usually annually by looking at the business accounts –Revenue minus costs of goods (COGs)

Net Profit (aka the “Bottom Line”)

A business’ total revenue minus its total expenses

Usually annually by looking at the business accounts –Revenue minus total business expenses (including COGs)

Expenses costs An outflow of moneyfor an item or service for the business

As a % of income

Financial measures of successMeasure Description How is it measured? Notes

Breakeven The amount of income required to cover all of your expenses

$ income - $ expenses & COGS = $0

Size of debt Money owed by the business to creditors

As an absolute figure or a % of assets

Cashflow – forward forecasting

The amount of cash generated and used by a business over a given period. Real cash the business has available to run operations, cover liabilities and expand

Actual cash received and spent againstwhat is recorded

Top selling product or service by revenue

The most revenue gained from the sale of a particular product or services in a business – as compared to other products/services sold

The price of products against the servicessold multiplied by the amount of products and/or services sold

Financial measures of successMeasure Description How is it measured? Notes

Top selling product or service by margin

If margin is the difference between a product’s (or service’s) selling price and the cost of production, then this will be the product/service with the greatest margin per sale.

Comparison of product sale priceagainst cost of production of product

Chargeable vs non-chargeable hours

Chargeable hours are spent directly with the client or working on client projectsNon-chargeable hours do not generate revenue yet are necessary to keep the business running smoothly

Chargeable hours are recorded and exchanged for a specified amount of moneyNon-chargeable hours are hours that the clients are not charged for. These must still be recorded to help you understand your true hourly rate

The goal is to establish a fee structure that factors in the non-chargeable hours ie. Clients pay for those non-chargeable hours but do not see those hours on their invoices

Financial measures of successMeasure Description How is it measured? Notes

Breakeven The amount of income required to cover all of your expenses

$ income - $ expenses & COGS = $0

Size of debt The amount of debt the company currently holds

As an absolute figure or a % of assets

Cashflow – forward forecasting

The timing and amount of cashflowing into and out of a company over a specific period.

Actual receiving of cash into the company account (not credits or invoicing) against loans and bills to be paid (including timing of payments)

Sales measures of successMeasure Description How is it measured? Notes

Number of customers Number of customers of business

Actual amount of customers buying products or services from the business

Income per customer The average amount of income brought into the business by a customer

Actual amount - total business income divided by number of customers

Market share The % of a market’s total sales earned by a particular business over a specified time period

Business’ sales divided by total market’s sales over the same period

Where do leads come from? Lead generation

Lead = person that has the authority and budget to purchase a product or service.Lead generation = the methods for generating consumer interest into products or services of a business

Recording the method by which a customer came to purchase a product or service from the companyUse Google analytics for online lead generation

Sales measures of successMeasure Description How is it measured? Notes

Conversion rates –from lead to opportunity

The act of converting a lead into a business opportunity

Recordingmarketing/sales process

Conversion rate – from opportunity to proposal

The act of converting an opportunity into a business proposal

Recordingmarketing/sales process

Conversion rate – from proposal to sale

The act of converting a business proposal into a sale. Online, the proportion of visitors to a website who take action to go beyond a casual content view, as a result of marketing or advertising

Online:Website visitorsAbandoned carts vscompleted salesPhysical:Number of physical sales or contracts signed against pipeline

Number of valuable meetings

BVOM = the business value of meetings. A successful meeting is a satisfaction of meeting or event objectives (often non-financial)

Set down clear meeting objectives and record if they are met. Actual amount.

Human resources measures of successMeasure Description How is it measured? Notes

Average length of tenure

The average lengththat an employee of the business remains employed by the company

Recording employment figures and getting average length of tenure as time goes on

Retention of staff / staff turnover

How often staff leavethe business over a particular period of time

Recording employment figures

Staff satisfaction / engagement

How happy the employees are

Formal engagement surveyBest Places to Work Survey

Spend on PGs How much the business spends on personal grievances for unjustified dismissal for example

Actual amount from accounts

Place to work How many people applying for jobs or sending in CV

Record amounts in HRBest Places to Work Survey

Operational measures of successMeasure Description How is it measured? Notes

Customer delivery times / SLAperformance

The degree to which the business is able to serve its customerswithin the promised delivery time

Ask:1. Is the customer

getting what it wants when it wants it or when advised?

2. Do the supplier and customer agree on how on-time delivery is measured? Any variations on delivery must be agreed to. Date of delivery

3. The number of line items on order

Ensure there is a a clear up-front agreement with the customer allowing for variations to amounts delivered and time frames for delivery, you need to be speaking the same language

Time spent on job vstime quoted

Does the business quote accurately forthe jobs it is doing for the customer

Quotes vs actual hours taken to perform job

Operational measures of successMeasure Description How is it measured? Notes

Defect rate Number of orders supplied to customers that have defects in a certain period of time

Number of defective orders Total number of orders-during a given time period

Customer service measures of successMeasure Description How is it measured? Notes

Number of customer referrals

Satisfied customers that refer other customers to the business

Recording of where the customer originated from

Ensure that you are recording referrals

Number of customer complaints

Number of customers unhappy with the business or product

Process for customer complaints recorded

Customer engagement

The engagement ofcustomer with the business or its brand

Recording of sales/marketing process and actions taken by customers

Time taken to respond to customer enquiries

X = the differencebetween the date that the customer enquires with the business and the date the business responds to the customer

Customer retention How many customers come back to the business for repeat purchase of services or products

Actual amountRecording by sales/marketing staff.Online: Client account reviews

Marketing measures of successMeasure Description How is it measured? Notes

Progress against strategyLTV Lifetime value of a

customer (present value of the future cash flows attributed to the customer during their entire relationship with the customer)

Average order total x average number of purchases in a year x average retention time in years

ROI Return on Investment – evaluates the efficience of an investment

(Gain from Investment – Cost of Investment) divided by Cost of Investment

CPR Cost per response (or click throughs)

Actual number of people clicking through on call to action – cost of an ad divided by the no. of people who click on it)

Marketing measures of successMeasure Description How is it measured? Notes

CPA Cost per acquisition (cost per sale)

Total campaign cost divided by amount of conversions/sales

CPE Cost per enquiry Total campaign cost divided by the total enquiries

Unprompted brand awareness

Where a large number of people around 1-2k are asked to name brands/businesses that they have heard of with no hints from the interviewer

Actual number through survey

Prompted brand awareness

Where a person is asked whether they know of a certain brand/business

Actual number through survey

Customer engagement

Engagement of customers with a brand or business

Marketing measures of successMeasure Description How is it measured? Notes

Competitivemarketplace

Where large numbersof producers compete with each other to satisfy the needs of of consumers

Market share (sales) against total industry sales

Brand preference or Net Promoter Score

Which brands are preferred under assumptions of equality in price and availabilityNet Promoter Score divides a business’ customers into: 1. Promoters 2. Passives, and 3. Detractors

- Survey

- NPS – take the percentage of customers that arePromoters and subtract the percentage who are Detractors (also survey)

Digital measures of success - websiteMeasure Description How is it measured? Notes

Conversion rate to goals

Actions that website visitors can perform can be tracked by setting goals through Google analytics

Google Analytics goal setting and results

Key wordpositions in Google

Where do you sit in Google for the key phrases & search terms that your customers use?

Using the private browsing or incognito mode of your browser or specialised software – Semalt, Hubspotetc.

Needs to be unbiased. Googleremembers your preferences and where you have been and serves up results accordingly

Branded to no-branded keywords

Non-branded keyword does not contain the website’s brand name (website obtains visitors who are not familiar with the brand). Branded keyword indicates that a searcher knows what website they are looking for

Google analytics (Traffic source keywords report –filter your brand keyword by excluding your brand name). Then focus on increasing the rankings of keywords that convert visitors best to your site

If all you’re getting is branded search traffic, you’ll want to conduct a technical and content SEO audit of your site as something is probably not in order. A well optimized site (unless it’s a brand with strong marketing prowess or has broad terms in their name) should see a majority of traffic from non-branded terms

Digital measures of success - websiteMeasure Description How is it measured? Notes

Conversion Funnel E-commerce: the journey a consumer takes through an internet advertising or search system, to the website and completing a sale (the numbers of visitors will decrease at each step of the process)Physical sale: Enquiry through to purchase complete or contract signed

Google analytics

Visitor demographics

Who uses your website eg. gender, age, income, where they live and what device they are using

Google analytics

Devices & operating systemsused

What devices site visitors are using to access your website

Google Analytics

Digital measures of success - websiteMeasure Description How is it

measured?Notes

Referrals Visits from sources outside Google’s search engine eg. A link from a hyperlink on one site goes directly to another site (social media posts linking back to your site), or, another search engine for eg.

Google Analytics

Top visited pages Pages that have the most visits

Google Analytics

Calls to unique online 0800 number

Can be tracked as a specific goal through Google Analytics

Most popular phrases

Unique pages on site How many pages of content does your site have?

Site map Important for GoogleSEO – content that is relevant & useful & that is added to regularly

Digital measures of success - websiteMeasure Description How is it

measured?Notes

Bounce rates % of visitors who visit site and leave rather than continuing to view other pages within the site

Google Analytics

• Does tracking the pages where more website visitors exit the site tell you the pages don’t work?

• Or that they were perfect and the customer found what they were looking for?

Returning vs new visitors

Returning = people who have visited website come back again

Google Analytics

• If lots of people keep returning, is it because they repeatedly can’t find what they’re looking for?

• Or, that the content was spot on?

Page views The number of pages viewed or clicked on the site during the given time

Google Analytics

• Is the number of views high because the navigation is frustrating?

• If you have great navigation, and low page views, people may have found the info they were looking for quickly, then nipped off to a cheaper competitor

• By tracking page views, what type of behaviour are you rewarding?

Digital measures of success - websiteMeasure Description How is it

measured?Notes

Number of unique visits to website

Number of times distinct people visit the website

Google Analytics

• By tracking visits what are you really tracking?

• Requests for data from the server?• Number of pages viewed?

Visit duration Length of time a visitor spends viewing the website

Google Analytics

• Similar to page views – was it a short visit because the found what they needed and left, or because they couldn’t find what they wanted quickly enough, so they left?

• Conversely, were they there for a long time because they were really engaged, or because they couldn’t find what they were looking for?

Digital measures of success – Goals in Google Analytics

Measure Description How is it measured? Notes

Filling in a contact us form

Where a visitor fills in a form as a call to action

Google goals

Downloading a file Visitor downloadsfrom the website

Google Goals

Watching a video Number of visitorswho viewed a video you have uploaded to your website

Google Goals

Purchasing a product Number of people purchasing from your website

Google Goals

Purchasing a number of products

Measured by value or by quantity

Internal business records

Average size of basket

The average amount spent by a customer in a single transaction

Google Analytics.Total amount of sales against number of sales

Spending a certainamount of time on a particular page

The average amount of time a visitor will spend browsing or reading a certain page

Google Analytics

Digital measures of success - emailMeasure Description How is it measured? Notes

Click through rates

Number of people who click through from the email to your website or landing page

Click throughs against the number of emails delivered

Open rate The number of people who opened your email

Google Analytics Be aware that an Outlook ‘preview’ is considered an ‘open’, it doesn’t however mean the customer has read it

Unsubscribes The number of people who clicked onunsubscribe option at the bottom of the email

Email marketing tool

Shares Unit of capital in a company

Company register

Number of subscribers

No of people owning shares in a company

Company register

Digital measures of success – social media

Measure Description How is it measured? Notes

Potential Reach

How many people you have the potential to reach

Likes, followers, fans,subscribers etc.

Actual Reach

How many people the business actually reaches through its marketing

Metrics on Social media, analytics

Engagement & Interaction

How may repsonses, likes etc.. You get to your marketing

Metrics on Social media, analytics

Social listening

How many times your brand is talked abouton social media

Metrics on Social media, analytics

Time torespond

How long it takes to to reply to comments on Social Media

Metrics on Social media, analytics

Digital measures of success – paid online advertising

Measure Description How is it measured? Notes

Reach Impressions Number of impressions orserve ups

Click through rates from advertising

From a banner or Google Adword

Click throughs against the number of banner or ad impressions

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www.ventell.co.nz