The right KPIs and business metrics are the most important tool that helps organization understand how well they are doing in delivering on their strategic goals. These Key Metrics must be tracked on a routine to avoid driving in dark mode.They provide meaningful business information for an informed decision-making.
The challenge today is not to find more business metrics but to narrow down the most relevant and meaningful ones for your business.
I have narrowed down to best 5 business metrics you must track for “ Increasing your customer base” :
1. Net Promoter Score (NPS)
The Net Promoter Score is a measure of customer satisfaction and customer loyalty. It is based on a single question: How likely is it that you would recommend [Company X or product Y or service Z] to a friend or colleague.
This question is then scored against a 10 point scale (0=Not at all likely, 10 Extremely likely). Responses between 0-7 are classified as detractors and responses between 8 and 10 as promoters.
2. Customer Lifetime Value
Customer Lifetime Value is an indicator of the financial value a customer provides over the lifespan of the entire customer relationship.
SERVQUAL is a measure of the service quality a company provides to its customers. Based on a multi-item survey that takes into account both service expectations and service perceptions it provides an insight into the gap between the service level customers expect and their actual view of the service.
4. Conversion Rate
Conversion Rate is a measure of the success rate of turning customer leads or potential customers into actual customers.
Conversion Rate = (Number of Goal Achievements / Visitors) x 100
5. DIFOT rate
Delivery In Full, On Time (DIFOT) Rate is a measure of delivery reliability. It measures the percentage of deliveries that have been completed in full and on time.
Delivery in-full and on-time (DIFOT) = units or orders delivered in full on time / total units or orders shipped
Key Performance Indicators (KPIs) form an essential part of business objectives and should be well communicated across an organization, so that team knows their responsibility and improve drawbacks.
KPIs also ensure that performance is measured not blindly but in relation to the larger business objectives. This means that every part of work is done with intentionality and in right direction.