11 Most Important and Top KPIs for Businesses
KPI or key performance indicators are one of the most important aspects of any business. It clearly implies whether your efforts to flourish the business is working or not! Simply put, it denotes whether the relevant steps you are taking for your business are helping you to achieve the business goals or not.
KPIs could be further regarded as higher or lower levels. While the former concerns the entire business, later ones are focused on the subsectors (ex: employee performance).
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11 Important KPIs for Businesses
In any business, there are top 11 KPIs that are quite important. Here’s the list:
#1 Sales Revenue
The KPI that tops our list is sales revenue! Sales revenue is an important aspect that gives a clear indication of where your business stands. It tells you about:
- Sales of the product
- Whether customers are considering your services or not
- The outcomes of the marketing efforts
- Where you stand amidst competitors and so on
Despite all KPIs, only a good revenue denotes a successful company. Note that the values for sales outcomes can be affected by numerous factors. So, it’s important to be aware of marketing changes, campaigns, etc. Higher the sales, better the revenue. Thus, one of the effective ways to enhance the sales revenue is by increasing sales numbers.
#2 New Paid Customers
Regardless of the business domain, new paid customers give a clear idea of the business’s success. Every company should consider them as a KPI to know their progress. Of course, if you are getting new paid customers, it means you are on the right path. Similarly, if you aren’t getting the same results, you need to work on the relevant business areas.
#3 Net Profit Margins
Two important KPIs for your business are both net profit margins and gross profit margins. Net profit margins mean how much profit did your company make as per revenue. Here, you can predict whether your earnings are more than what you cost that you invest in the business.
The best to calculate net profit margins is by evaluating the monthly revenue and deducting the sales expense. You can enhance the net profit margins by increasing the product price and eventually the revenue. Alternatively, you can also improve the net profit margins by decreasing the production/sales expenditure.
#4 Gross Profit Margins
Gross profit margins denote the profit as per the sales revenue. It’s an efficient way to know your business profits during its functioning. Simply put, these margins show how productive you are as a company. Regardless of your sales revenue, always check your gross profit margins.
That’s because if your gross profit margins are low, but revenues are good, you still need to give more effort and be efficient. You can calculate the gross profit margins by subtracting the total sales revenue and cost of sold goods. Next, divide the calculated value with total sales revenue.
#5 Repeat Purchase Rate
This KPI is often ignored in most businesses, but like other KPIs, the repeat purchase rate is significant too. Repeat purchase rate means the total percentage of customers who returned to make another purchase of your products.
If your RPR is 100%, it means all your customers return to make another purchase. Likewise, 50% means only half of your customers come back to make another purchase. Higher the RPR, better the brand loyalty and overall sales.
#6 Social Media Reach
Coming to marketing KPIs, today’s social-media prone era calls for a good business reach in social media platforms. Here, you will get to know about the number of customers gained by using social media platforms like Facebook, Twitter, Instagram, LinkedIn etc. If your social media reach decreases, it indicates that you need to work on your social media marketing tactics like copy/content quality.
#7 Website Traffic
Website traffic means the total number of users that are visiting your website. It’s often measured as visits/sessions. Likewise, it also implies whether your marketing efforts are adequate to attract convertible users.
Higher website traffic means more user visits and vice versa. As it shows the effectiveness of your marketing strategies, good website traffic can scale up your business. Likewise, low website traffic means that you need to work on your marketing efforts.
#8 Click-Through Rates
For any website, click-through rates mean the number of users who click on the ads (clicks) to the number of times those ads have been displayed (impressions). If your impressions are 100 and the clicks are 10, your CTR will be 10%.
CTR works as an effective marketing KPI as it shows whether your ads are catching user attention or encouraging them to take action. If your CTR is good, you are on the right track.
Lead marketing is a process where you use marketing strategies to encourage potential customers and then eventually transform them into buyers. It gives a clear idea of the total targeted traffic on your website.
If you generate higher leads, you are converting more visitors to buyers. This means your efforts are working. However, lower lead generation means you need to work on relevant areas like CTAs, copy, designs, etc.
#10 Customer Retention Rate
Customer retention rate is the total percentage of customers who stays with your brand after a given time period. It’s a significant KPI because a higher CRR means your customer values your brand and product.
They are happy with your services and want to be associated with you for a long. It also indicates a sustainable revenue source and good quality customer service for your business.
#11 CSAT or Customer Satisfaction
Happy customers mean successful business! CSAT or customer satisfaction shows how satisfied your customers are with the products and services. It’s a survey where customers are asked about their overall satisfaction with the goods/services.
Here, the users rate the services from 1 to 5, 1 being very unsatisfied and five being very satisfied. If you get five ratings, it means you are on the right path.
Make sure to keep track of these KPIs if you haven’t already. Keep them in check, and you will see your business thriving in the upcoming days.