Of course, when you start a business, it's normal to want it to be highly successful; I mean, who wouldn't want the fruit, their blood, sweat, and tears to be good and juicy? But, unfortunately, many small business owners go through a phase of different trials and errors with several sales and marketing models. Still, the mistake many make is not measuring them to see whether they are working.
Want to know a secret to help figure out how well your efforts are working, where to spend the most money, and where to fix it; all you need are Sales metrics to monitor your output and business as a whole. Once you start tracking sales metrics regularly, you can improve your excesses and understand how to measure sales to improve your small business.
These are 5 sales metrics to track and look out for in your pursuit to grow your business performance and boost sales:
- Sales Growth Over Time
- Sales By Product Or Service
- Sales Generated by Lead Source
- Average Purchase Value
- New Vs Returning Customers
Sales Growth Over Time
As you know, progress doesn't happen overnight; it takes time to see any actual positive difference, which is a sign that the hard work you are investing into your business is yielding returns known as ROI.
Sales growth over time means how much your business has grown over some time. It would help if you started with tracking sales for a period, which could be a month, three months, or more. Then, you can set targets with the previous reports of your outputs and performances by doing these.
The moment you have sales report information, you can compare it with previous reports; it allows you to have the liberty of setting sales targets for your business and preparing action plans to achieve them.
Monitoring sales sheds more light on factors you may not have been paying attention to, such as what products sell better and how pricing affects certain sales.
If your sales are growing, it is necessary to identify the cause to repeat it. If it doesn't succeed, you need to find the source and fix it. That brings us to the next metric.
Kippa has a reports function that provides you with a detailed financial analysis of your sales and expenses. In addition, it allows you to monitor changes in sales.
Sales By Product Or Service
When you run a small business providing various products or services, you know that all your products and services don't sell the same way; there's always a best seller—that one product everyone wants, the one thing that rakes in the most money in sales. So yes, now that we are on the same page and you know what products I mean, back to business. You need to promote your best sellers more than any other products in your inventory, spend less time promoting what's not selling. You already know existing customer favorites, so leverage on it.
Please include it in your business plan to track and figure out the market factors as to why the products are doing.
A step to help you manage this metric is to leverage the Kippa Inventory function. With it, you can be at the top of your game in monitoring sales of each product in your inventory.
Sales Generated by Lead Source (By the number of customers I interested in your business)
Another simple way to track business metrics is to measure which marketing efforts or strategy you leverage on brings the most leads or prospective customers to your small business; basically, you are tracking sales by lead source, and you can easily tell which lead generation source is the most effective in gathering qualified leads (Customers that have expressed interest in your products or services).
The bottom line is that you need to understand which marketing efforts have the highest customer conversion rates, which must be affordable and easy to execute.
With the Kippa Bookkeeping app, you have all customer information in one place, making it easy to track new and returning purchases. With that data, you can build trust and create a lasting impression on customers.
Average Purchase Value
Usually, when you have been running a business for a while, you tend to predict or forecast how much, on average, your business makes from purchases every month. It may not necessarily be accurate sometimes. The market activities have a way of playing with your emotions, which is fine.
Knowing your average purchase value, what every kind of lead brings to the table in terms of how much money you make from them helps you optimize your marketing efforts accordingly.
Essentially, this key metric helps to forecast sales, maintain inventory, and budget marketing expenses, and, combined with other financial metrics related to types of customers and the type of product or service, can provide you with a clear knowledge of customer behaviors.
New Vs. Returning Customers
A growing and healthy business must have a steady inflow of new and returning customers. Tracking this metric tells you what percentage of your sales comes from. Of course, it's normal for customers to drop off from using your products. Still, there's no need to feel bad when your small business has at least one new customer onboarding now and then; this indicates that your marketing tactics are working. To properly track this metric, you need to up your game on promoting customer loyalty with your existing customers.
Use the Kippa app to track your sales and profits, and this is the first step to tracking these sales metrics. Focusing on futons like the inventory feature helps determine what sells better and what doesn't. In addition, it's a more straightforward way to track your marketing tactics to get new customers to build your business.
I like to think of sales metrics as a way to truly connect with your business and its sales operations, a way to figure out how any decision you make would shape your business's performance. The moment your business's sales monitors are tracked regularly, it becomes easier to prepare a better marketing plan to revive parts of your sales operations that are lagging in your small business.