Key Metrics for Startups
In the early stages of founding your empire there is no doubt you’ll have a lot of things on the go! While you’re busy putting together that to-do list, let’s think about which metrics you should be watching the closest.
Focusing on these key metrics will foster and drive quality decisions as you move forward.
You want to make revenue with your startup and prepare yourself for the future. So here’s some key metrics for startups we recommend tracking to effectively start growing your business:
One of the primary metrics to consider will be the idea of profitability. Let’s be honest though, in the early days of most start-ups it’s unlikely to turn much if any type of realistic profit.
As a new business, it’s undoubtedly difficult to get to a place where you can start making money. However; consistently tracking the amount of money that’s coming in, is one of the building blocks of sustainability. Sales revenues, ad revenues or any other revenue streams are vital for tracking & reporting and determining future growth. They will also provide critical business intel for any in-demand pivots to strategy.
Any type of revenue in the early stage of your business is something that you may really struggle with. If you have a great product and you see continuous conversions, the revenue generated will grow. Once that starts to happen, it becomes even more vital to keep track and compare your sales and expenses consistently.
When you start gaining customers or regular visitors to your website it is crucial that you also track their retention rates. A number of startup companies become extremely focused on the idea of consistently acquiring brand-new customers. It’s a flawed sense of direction as volume alone does not equal success. With so many experts obsessing with, and solely focusing on new acquisitions, they neglect some of their biggest customers. At times completely ignoring the potential value of their lifetime customers.
For any startup this will become a huge problem, as acquiring new customers instead of rewarding the loyalty of existing ones costs more. Acquiring new clients for your business can conservatively become anywhere from 5 to 25 times more expensive than connecting & engaging with current ones. Yes, you read that right, anywhere from 5-25 times more expensive!.
The Cost of Customer Acquisition
Understanding the cost of customer acquisition in the early stages of your business will help to calculate the secret recipe to keep your company up and running.
Calculating the number of customers you need to reach a profit, as well as your current cost to acquire new customers can be a great start in determining the future profitability of your company.
It’s a good idea to keep checking this metric to make sure that your customer acquisition process can be adjusted if required. The analytics and key metrics for startups don’t lie.
Determining the point at which a visitor becomes an active user on your website through a sign-up, sale or download can be discovered through metrics. This is especially helpful when garnering new appreciation for your startup.
This is somewhat of an advanced analytic, but it would be worthwhile to you if:
You could track when a person from a particular place visited your website?
Discover the average of the total number of times that person visited your website before they signed up or made a purchase?
When you complete several of these analytics reviews, you can draw an average for the total amount of time that it takes for a new customer to become loyal and active as a regular user or purchaser.
Imagine the leg up analytics and insights like these can give you when creating your marketing strategy?
Follow some of these top metrics if you are truly interested in improving your company’s future through analytic study.
TL;DR – Commit to habits now and reap the reward as you grow. 4 great metrics to track are Profitability, Customer Retention, Cost of Customer Acquisition and Activation Metrics. Not sure what any of those are? Then sorry-not-sorry TL:DR-ers, you’ll just have to scroll back up and read the full post. Just like business, there’s no shortcuts folks!
Thanks for reading!
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