The Metrics to Monitor When You Scale Your Business

Are you in the process of scaling your business?

You might be focussing your efforts on revenue. It is one of the most important metrics. However, it's not the only one you should monitor.

There are other figures that should be on your radar to give you an idea of what is working, what isn't, and where you might need to make some adjustments. Keeping a close eye on them will give you the best chance of achieving your business objectives.

You don't want paralysis by analysis. Instead of browsing through dozens of metrics, make these a priority.

Cost Per Acquisition

This metric goes by many names, but the sentiment is the same. Cost per acquisition doesn't just incorporate your marketing spend. It also includes the people involved in turning a prospect into a customer.

That includes your salespeople and the costs of any offers used to convert customers. Your goal is to reduce this number as low as possible. It might increase when you're introducing new products or during peak periods. But you want to work on bringing the number back down as quickly as possible so you can continue to scale your business.

Lifetime Value

You'll need to understand several metrics to calculate your lifetime value. Start by learning how long your average customer has been active with your business. You'll also want to know how much they spend with you during this time period.

In addition to these figures, you'll also want to include any expenses related to the products you sell. It might be installation or maintenance. However, you can skip this step if it's a one-off purchase. You want this number to be as high as possible and more than your cost per acquisition.

Growth Rate

While you want to see the number of transactions or purchases increase, it's vital to monitor the number of new customers you're acquiring against the number of existing clients engaging with your business.

This metric will give you the best indication of how fast your business is growing. You want to find a number that is sustainable. If this figure rises too quickly, you might struggle to keep up with demand. But if it's not increasing fast enough, you might need to alter your strategy to acquire more customers.

Revenue Run Rate

Your revenue run rate will give you a better understanding of how your business is performing financially. You can easily calculate this by working out your revenue during a specific time period, such as a week or month, and then converting it to an annual amount.

You should be aware that this number can change quickly. It's rare that there is no disruption or change within an industry. Unless you can factor in seasonality or upcoming events in the environment, you should only use it as a performance indicator and not a reason to start spending money you don't have.

Customer Retention

With the number of new customers shopping online decreasing, many businesses are turning their focus to retention. It also makes sense financially as it can cost up to seven times more to acquire a new client than to retain one.

You can measure this category in multiple ways. You can look at the number of concurrent people doing business with you and how satisfied they are with their experience. Alternatively, you can review the number of customers who have slowed down on their spending or stopped altogether. Another method is churn. This relates to the time it takes for someone to become inactive.

What You Should Focus on to Scale Your Business

In order to scale your business, you need to give it your full attention. That means you should automate as many tasks as possible to allow you to dedicate time and effort to grow. It might be scheduling social media posts or responding to customer service enquiries. Something you should absolutely be automating is fulfilment.

With Interparcel's multicarrier shipping solution, you have visibility over all your vital fulfilment metrics. You can see all your shipping transactions, including how many are booked, in transit, out for delivery, and have arrived at their destination. There are also statistics for the number of parcels sent, your total spending, and the amount of PrePay credit available. You can review these figures across multiple time frames and create your own custom range. Find out more about how Interparcel provides the data you need to scale your business here!