What Does Your Dashboard Say?

Has the first quarter of 2020 flown by for you as it has for me? I was looking forward to 2020 and maybe you were, too. There are so many opportunities to explore when a new year begins. We set personal and business goals and then start out the gate running! But sometimes, we have to slow down and do a review. We have to take stock of how we are performing, even when we are hit with a crisis like the COVID19 pandemic.  

Now more than ever, you have to keep your eyes on the dashboard, just like you would while driving through a rocky road.

Key performance indicators (KPI’s) are the component of our business dashboard and they quantify the results of our goals.

There are many different KPI’s and you can choose which ones are applicable to your business or industry in relation to your goals and objectives. 

Some of the KPI I use to manage performance are:

Revenue & Net Income Growth Rate - Measures growth in comparison to a previous period. Are these numbers in line with your goals?

Gross Profit Margin - The percentage of revenue left after direct expenses (COGS) have been paid. Strive to keep more money in your business than you pay out in direct expenses.

Customer Acquisition Cost (CAC) - The cost of acquiring a new customer (total sales & marketing cost/total new customers).The ideal ratio is 3:1 for customer LTV:CAC but every industry is different.

Conversion Rate: The percentage of leads or prospects converted to sales (Sales/Leads x 100). This number is an important one to know, regardless of the type of business you have. 

I want to encourage you during this period that as you evaluate your goals and objectives for your business, also review the KPIs you are using to monitor performance and make sure that all are in alignment. It is the only way to proactively manage performance.