In business, there are many essential metrics that leaders must continue to track in order to keep their company on target to meet its quarterly and annual goals. For example, lagging customer retention rates may evolve based on consumer behavior patterns during any given season, but by implementing an adjustment, you’ll be able to stay on track and meet the needs of your customers exactly where they are.
Below, Fast Company Executive Board members have compiled a list of high-level metric points that are important to evaluate, on a rolling basis, if you want your business to develop and thrive.
1. OBJECTIVES AND KEY RESULTS
The pivotal process is usually accompanied by a very high level of chaos. Having just one single important metric is a questionable benefit. Better to implement an objectives and key results (OKR) process at all levels of your company, before starting a pivot, and use the OKRs to track your success. It will help you to lower the chaos level and provide you with a success measure during and after the pivoting. – Andrei Kasyanau, Glorium Technologies
2. CUSTOMER RETENTION
Customer retention is a high-level metric that you should track constantly. You can determine if your business is successful or not only if you have some loyal customers in business with you over time. This metric will help you shape the lifetime of your offerings as well as help you scale with a solid use case. Nurture your customers and keep track of their relationship with you. – Candice Georgiadis, Digital Agency, Inc
3. GROSS PROFIT MARGIN
Gross profit (GP) is critical to making sure that operationally you are running your business effectively. If your GP is way off, then you need a major course correction. If your GP is in line, you can manage your overhead to ensure a maximum return for the time invested in the business. – Brad Burns, Wayne Contracting
4. LEADING AND LAGGING INDICATORS
It’s important to look at external metrics that give you the confidence so that you’re looking at the right internal metrics. For example, I look at leading indicators (unemployment rate, mortgage interest rate and construction spending) and lagging indicators (such as existing home sales) to appropriately track what’s happening in the market and then align to what is the most important internal metric. – Jennifer Hoff, Colibri Group
5. MARKETING PIPELINE
Marketing generated pipeline or bookings. A strong marketing pipeline validates your market supremacy (or lack of). If you can drive top-of-funnel solid growth, you’ve keyed in the proper channels at the right time (organic, paid, direct, and more). – Kyle Lacy, Seismic
6. SALES, SALES, SALES
Export all your sales by value per customer. Size, frequency, and quantity of orders. Look for market patterns in your top customers. Figure out where they came from and what made them buy. Now you know who to focus on, where to find more like them and what to say. And, if you use salespeople, find more like the ones who convert the most. Remove anything that doesn’t perform well. – Mike Koenigs, The Superpower Accelerator
7. THE ‘WHAT NEXT METRIC’
When scaling there are many key metrics we follow that assist us with running the business, i.e revenue, investments, sales pipeline, and more. It is important to focus on the “what next metric” that is going to differentiate your business from others, I call this The Bold Factor. It is defined as the future product or service plan that you are creating to meet the needs of your future clients. – Leigh Burgess, Bold Industries Group, Inc.