5 Key Performance Metrics Every Business Should Track
Discover the essential KPIs that drive business success and learn how to implement effective performance tracking systems.
Struan Consultant
Performance Optimization • Strategic Planning
In today's competitive business landscape, tracking the right performance metrics is crucial for sustainable growth. This comprehensive guide explores the five most important KPIs that every business leader should monitor.
1. Revenue Growth Rate
Your revenue growth rate is the most fundamental indicator of business health. Calculate it by comparing revenue between periods and expressing the change as a percentage. Aim for consistent, sustainable growth rather than sporadic spikes.
2. Customer Acquisition Cost (CAC)
Understanding how much it costs to acquire each customer helps you optimize marketing spend and improve profitability. Include all sales and marketing expenses in your calculation for accuracy.
3. Employee Productivity
Measure output per employee to identify efficiency opportunities. This metric varies by industry but should show improvement over time as you optimize processes and implement better tools.
4. Customer Lifetime Value (CLV)
CLV represents the total revenue you can expect from a customer relationship. A healthy CLV to CAC ratio should be at least 3:1, indicating sustainable unit economics.
5. Net Promoter Score (NPS)
Customer satisfaction drives long-term success. NPS measures customer loyalty and predicts business growth. Regular surveys help you track satisfaction trends and identify improvement areas.