Key Metrics Every Business Owner Needs to Track

If you own your own business, you have a lot to keep track of. Unfortunately, three of the most important things you should be tracking often are put to the side because you just can’t seem to find the time, or the right method, for collecting this information.

Another issue business owners encounter is that they try to collect so much data that they find themselves doing a poor job of tracking any of it. So what’s a business owner to do? Experts tell us that there are three key metrics that every business owner should collect. What follows is a list of those metrics and the best way to collect it.

Conversion Rate: Your conversion rate tells you how many customers are doing what you want them to do. Of course, every business is different. Some may want customers to make a purchase, others want them to provide their email address and still others may want them to subscribe to a newsletter. To calculate your conversion rate, take the number of people who did what you wanted them to do and divide by the number of people you asked to do it. Once you have your conversion rate calculated you will be better able to tell if your marketing strategy is working. If it isn’t working, you may have to change your technique.

Customer Acquisition Cost: Your customer acquisition cost (CAC) is the amount of money you need to spend to convert a customer. To calculate your CAC, divide how money you spent on marketing in a specific time period by the number of customers you acquired during that time period. Tracking your CAC will give you an idea of how you can make your marketing dollars work more efficiently.

Rate of Referral: This metric allows you to understand if your customers are satisfied. That’s because unsatisfied customers will not refer you to friends and family. Referrals allow you to spend less money on CAC because your customers are basically doing your marketing and lead generation for you, free of charge. To track your referral rates, simply ask new customers how they heard about your business.

Tracking the right information, in the right manner, is the key to successfully monitor your business. And remember, while you can’t track every aspect of your business, there are some aspects that you can’t afford not to track.