Are You Tracking These 3 Key Metrics?
Every business knows that guesswork doesn’t work and metrics matter when making important decisions. With insight into the right metrics, you can track the success of your products and campaigns, make faster and more-informed decisions, and show competence to stakeholders.
And yet, even though we all know the value of metrics, many financial teams lack the right tools to provide real-time visibility into essential metrics. Here are three examples of key metrics on which your business should keep a sharp eye.
What’s your customer churn rate?
How many customers has your business lost over the past month or quarter? That’s your customer churn rate, a vital metric for most businesses.
Beyond a simple count of customers lost, you’ll want to dig into their personas and any data you can gather on why they were lost, which could also relate to inflationary pressures or other market challenges.
How engaged are your customers?
The customer engagement score helps you identify when customers are drifting away from your business.
Every company will measure customer engagement differently, assigning different weights to a variety of inputs, such as how often customers attend webinars and events, whether they open targeted emails, how active they are in the company’s online community, or how often they log in to your online portal.
If your customers are becoming less engaged over time, that could easily lead to customer churn, so you’ll want to identify the trend early and explore reasons for it. That could lead to valuable discussions with sales, marketing, and other departments to evaluate your current customer engagement efforts.
Do you know your cash burn rate?
Take your starting balance, subtract your ending balance, and divide the total by months measured. The result is your cash burn rate, or CBR, which does exactly what it says—it tells you how fast you’re burning through your cash.
The CBR is especially important for startups and small businesses that aren’t yet profitable, so they can keep a close eye on their cash on hand and manage expenses accordingly. Even if your business is profitable, the CBR remains vital for many reasons, including identifying sales and revenue concerns, proving a need for added funding, and crisis planning.
Get the insights you need
Insero & Co. is one of the premier public accounting firms in Western, Central, Upstate, and the Southern Tier of New York. We can help you evaluate all the different accounting and financial management platforms available to help you choose one that provides the key metrics your business needs.