05 Jul 5 Key Performance Indicators that WILL Grow your business
If you’re like most business owners.
You either have:
- zero key performance indicators (KPI’s) to monitor the growth of your business
- Too many KPI’s and get lost in the detail
So in this post, I’m giving you the 5 profit making performance measures you MUST measure in order to grow your business FAST.
If you’ve downloaded my FREE eBook 46 ways to get more customers and Sky rocket profit margins, you’ll know what I’m talking about.
I’m also showing you why increasing each of the 5 KPIs just a tiny bit will have a MASSIVE impact on your bottom line – yes PROFIT.
What are Key Performance Indicators?
I agree – it sounds very corporate and indeed it is.
They are simply areas where you can measure how well your business is doing and a great way of making sure your business grows.
Here’s the point:
If you don’t know how well your business is doing in these 5 areas, you can’t possibly know whether it is growing or not.
And if your business does grow, it will simply be down to LUCK and eventually your business will fail.
Key Performance Indicator #1 – No. of LEADS
A leads is where someone has got in touch with your business to discuss your products or service.
A lead is where someone has shown an interest in your product or service.
By increasing leads, you are improving the amount of times someone shows an interest.
There are lots of ways you can increase leads.
Measuring leads on the web is just as important as measuring leads offline.
Leads on the web would simply be the number of new visitors you get to your website.
They’re not as qualified as being that interested because they may have landed on your site by accident.
BUT you do have an opportunity to convert them into paying customers.
The many other ways to generate leads include:
- Cold calling
- Business Cards
- Cold emailing
Key Performance Indicator #2 – CONVERSIONS (%)
Once you have your leads, you need to convert them into paying customers.
You track this using conversion rate as a percentage of your leads.
For example if you generate 5 leads in a week and 1 of those customers buys, your conversion rate is 20%
Ways to increase conversion rate:
- Don’t stop until you close the sale
- Speed up your website
- Give the users exactly what they’re looking for
- Improve website navigation
- Offer free delivery
Key Performance Indicator #3 – No. of sales per customer
How many times do your customers return in a year?
Are there any opportunities for you to bring back customers more often?
I know a company that sold dog food.
They decided to make an offer to all their customers.
A FREE Dog. But not just any free dog. A BIG dog that ate even more dog food.
Immediately, they tripled the amount of times their customers returned each year.
Is there anything you can do to increase the number of times your customers buy your products?
Maybe your product is a one time buy. If so, are there any other products you can sell to accompany the one time buys?
Key Performance Indicator #4 – Average Sale (£)
This is a great way to immediately impact your bottom line.
By simply upselling to customers at the checkout page or increasing the threshold for delivery, you may be able to increase the average sale by 10%.
Why do McDonalds ALWAYS ask us if we want large?
Because if we buy a large every time we go to buy a medium, they upsell by an extra £2. In Mcdonalds terms, that equates to billions of pounds right across the world.
I agree – McDonalds are a huge business, but if you can find a strategy that increases your average sale, you could see a huge impact on your bottom line profits.
Key Performance Indicator #5 – PROFIT MARGIN (%)
How do you calculate profit margin
Simple: (sale price – cost ) / sale price
For example, I sell a model plane at £100. But it costs me £50 to make
100 – 50 = 50
50 / 100 = 50%
Profit margin is VITAL to ensuring you don’t make a loss each time you sell a product. If you don’t make money, what’s the point in selling more goods.
So there you have it, 5 great ways to monitor the growth of your business. Start today