5 Performance Metrics Every Small Business Owner Should Know
Every business owner’s goal is to increase sales. And while success largely depends on how you market your product, having key performance metrics in your back pocket can help you make informed decisions.
In this article, we’ll discuss 5 performance metrics every small business owner should keep in mind when making business decisions. Knowing them will allow you to understand where to allocate your marketing resources to grow your bottom line.
1. Average Ticket Size
Your average ticket size is an important metric. And, in fact, it could be considered the most revealing sales metric, especially if looked at over time.
Of course, total revenue is traditionally the golden egg of performance analytics, but what makes average ticket size even more useful?
Whereas total revenue demonstrates how much your business is bringing in as a whole, average ticket size shows the value of your customers at the individual level. In knowing how much each customer spends on average, you can then incentivize customers to spend more during a visit.
How To Increase Average Ticket Size
Service industries can offer bundles or packages. Similarly, retail/restaurant can diversify their product offering or host an event to keep customers in the door for a longer time.
2. Best-Selling Product(s)
Knowing what your best-selling products are is valuable. At the very least, you’ll be able to understand which products are being received by your customers the best & get to better understand their needs.
On the flip side, you can take a look at your under-performing products & figure out why they aren’t selling. Is it due to a lack of product quality? Lack of marketing? Or is it just not the right product for your customers?
These are all questions that are important to answer when comparing the performance of your products.
What To Do With The Data
Display your best-selling products on your website, menu or even on a chalkboard at your store. You can also educate your employees on best-sellers so they can assist new customers who may not know what to get. By doing so, you’ll prove yourself as an expert on your product & make your customers feel more comfortable with your business.
3. Slowest Day Of The Week
Every business has a slow day. For this reason, successful business owners optimize their days & hours of operations around the times that suit their customers’ needs. Granted, there is the notion of normal business hours that are largely dependent on your industry.
Nevertheless, having such a granular piece of sales data can help you understand on which day(s) you need to incentivize your customers to return to your business so you can level off revenue. In addition, you’ll be able to understand how to best allocate resources throughout the week.
How To Level Off Revenue Throughout The Week
Incentivize current customers with a special offer to visit your business on your slowest day. And the reason I say current customers is that communications generally become more effective the longer the relationship exists. Therefore, the return on offering incentives to your current customers is often greater than offering promotions to new customers.
4. Slowest Month Of The Year
Similar to the slowest day of the week metric, knowing which months and seasons are slow for your business can help you prepare your marketing for the high competition experienced during industry slow periods.
We recommend that you start preparing your marketing for a slow period three months in advance. Such a time frame will allow you to figure out how to add value during a slow period & the best marketing channel to keep yourself top of mind.
How To Level Off Revenue Across Seasons
The key to increasing sales during a slow season is to figure out why your industry is in low demand & offer a solution to an alternative problem that they have. This often requires that you diversify your product offering in a way that still highlights your core competencies.
5. Customer Visit Frequency
Customer retention is key because the upfront cost of attracting new customers with local SEO technology or paid advertising campaigns is greater than the cost of getting a current customer to return with email or text message marketing.
Due to the difference in cost, focusing on increasing customer visit frequency will help you maximize the efficiency of your marketing budget. But unless you know how often your customers are visiting, you won’t be able to judge the performance of your retention campaigns.
How To Increase Customer Visit Frequency
Text message marketing is powerful, especially when running retention campaigns to get your current customers back in the door. The primary reason is that it’s a simple & non-invasive form of communication that will actually be read by your customers. Learn about our text message marketing solutions here.
As explained throughout this article, tracking granular performance metrics can greatly inform your marketing decisions & help you grow your company.
Our payment technology can help you track the metrics outlined so you’re in the know about how your business is actually doing. In addition, our integrated marketing suite gives you all the tools you need to attract & retain customers year after year.
The worst action is inaction! Our team is ready to find your next big move. Over 20 years of experience means we have the tools to get it done in your local market.