Each successful business, despite its many forms, is essentially a value engine with three stages:
If you consistently attract or retain more customers than you lose, you have an engine of growth. (Costs/Profits are also important but here I am focusing on a marketplace perspective.) Looking at these three numbers helps you quickly diagnose where you should be focusing your energy. And if you are developing a new business, you ultimately discover whether you have a viable business model or not.
Here are some examples of these three important indicators by industry:
|Ecommerce||Search effectiveness||Conversion rate to sales, Shopping cart abandonment||Repeat purchases|
|Saas/Mobile App||Sign-ups for free version||Freemium to paid version||Paid churn (% of customers you lose each month)|
|Marketplace/Distributor||New sellers, New buyers||Shopping cart size (no. items and $ amount)||Top sellers, Top buyers|
|Professional services||Prospects in funnel||Contracts or Engagement letters||Additional contracts|
|Retail store (bricks and mortar)||Store traffic||Sales per week||Repeat customers|
|Consumer product||Distributor agreements||Sales per distributor||Repeat purchases|
|Online Publication||Number of readers, number of advertisers||Clicks per ad||Repeat reader visits, Advertiser churn|
These three numbers provide a quick actionable snapshot of your business.
What key numbers do you look at regularly? Share in the Comments section below.