Monitor Your Money: 3 Sales Metrics Every Business Should Be Tracking
Did you realize that only around 50 percent of small businesses will survive past the five-year mark? If you are looking for a way to avoid the five-year curse, then keeping track of your company’s finances is a good start.
Failing to keep track of certain sales metrics will put your company at a disadvantage as you move forward. By taking a hands-on approach to the financial side of your business you can discover problems before they cause any real damage.
The following are some of the most important sales metrics you need to keep a close eye on.
1. Important Sales Metrics: Inventory Turnover
Does your business specialize in selling products to the general public? If so, you need to keep a close eye on your inventory turnover rate. In essence, inventory turnover is the number of times your company has sold and restocked a particular item.
This metric allows you to see what products are popular and which products are sitting on the shelf collecting dust. Once you have this information, you can easily optimize your inventory for success. Learning how to calculate inventory turnover can help you save money with ease.
2. Accurately Calculating Lead Response Time
One of the main things you should be concerned with as a business owner is generating quality sales leads. Having a functional and appealing website is one of the best ways to drum up interest about the products and services you offer. Once you have created sales leads, you will need to track how long it takes you to respond to consumers.
If a potential customer reaches out for information, you need to provide them with what they want in a timely manner. The longer you wait to follow up on these leads, the higher the chance will become of losing them altogether.
A reputation for failing to follow up with consumers can make it very difficult for you to acquire more customers.
3. The Cost of Acquiring New Customers
Understanding just how much money you are spending to get new customers is also an important sales metric to track. This metric can be extremely helpful for startup business owners who are attempting to scale in a hurry or show value to potential investors.
Having this knowledge can also help you see just how effective your existing marketing and advertising campaigns are. If you are not seeing a good return on your investment, shaking things up a bit is important. Consistently pumping money into marketing campaigns that are not fruitful is both foolish and completely avoidable when tracking the right sales metrics.
Information is Power
When first starting a business, you will need to run on a shoestring budget. Adequately monitoring sales metrics is a great way to see how successful your new venture is.
Are you looking for more information about running a successful business? If so, check out our article on how to increase employee engagement.