By Lindsey Anderson, CPA
Manager, Tax Services
[email protected]
Financial statements are great to understand your financial position and profitability, but are they telling you what you really want to know? There are probably aspects of your sales and marketing efforts that you would like to understand in more detail. How do you measure customer engagement? We would like to offer a few quick metrics by which you can measure your company’s revenue growth, customer engagement and future potential! Consider taking a look at a few Key Performance Indicators (KPIs) related to your revenue cycle on a periodic basis (daily, weekly, monthly, quarterly).
KPIs are data points evaluated at a point in time over several periods, either compared with your respective industry benchmarks or against your company at that same point in time of periodic intervals.
So, what are some revenue cycle KPIs you should keep a close eye on in the coming months? Here’s a handy list:
- Number of qualified leads
- Number of new contracts signed per period
- Dollar value for new contracts signed per period
- Average revenue per customer
- Number of customers retained
- Net profit margin by customer
- Customer turnover rate
- Customer satisfaction rating
- Percentage of market share
- Monthly website traffic
These are just a few of the many KPIs for you to consider. We recommend looking at these over a 10-year period of time to understand fluctuations created by economic cycles.
Among other things, monitoring these metrics will help you gauge customer engagement, determine whether you need to explore new revenue streams, and identify aspects of your company’s culture that can be tweaked to boost employee morale and retain talent. Maybe you need to shake things up and get customers excited by expanding your line of products and services. Or you could grab their attention by redesigning your website. Perhaps you could boost sales capacity by bringing on new staff members as well. And if current employees are getting burnt out, try developing some new incentive programs and ask about what would revitalize them.
Ideas like this stem from looking at KPIs and enhancing your understanding of your business and learning “why” the results are what they are. So, as you continue to ease into 2019, focus on these metrics and take advantage of the many ways they can help you figure out how to improve your business in the months or years to come. Happy employees lead to happy customers, which leads to enhanced profitability!
If we can assist you further with achieving success in your business or personal affairs, please call Lindsey Anderson at (317) 608-6699 or email [email protected].