For all digital businesses, one of the fundamental things that contribute to their growth is to use sales metrics to monitor their results. So the question that arises here is that what sales metrics do you use in your company?
When you’re not certain which sales metrics you are using, or whether you assume that the amount of transactions you make on your own is a sufficient parameter, think twice. There are a lot of data you need to review in order to determine the performance of your company.
For instance, developing strategies that would help your online shop expand – if you do have one – is crucial. However, these acts need to be carefully planned out so that you understand the ROI of action.
If you’ve never heard about any such revenue metrics, or if you find they’re really difficult to measure, don’t panic. Here you’ll find the important ones, and we’ll teach you how to measure them exactly. Stay tuned. Take a look, man!
Importance of the assessing sales metrics
Through evaluating the sales metrics for the digital products, you would be able to determine what is effective and which are not, and even recommend short-, medium-and long-term targets.
This report should be customized to suit specific company needs. There are several stats to be examined, so it is important to know those are necessary for taking efforts to ensure your market progress. So, you’re not going to get stuck in the midst of a set of equations that won’t show something particularly important.
There are several tools and services that can make it easy to reach these statistics, and it will go a long way towards making the job more effective.
Analyzing your company sales metrics will help you measure your brand output and improve the predictability of your acts.
7 main sales metrics for digital companies
Sales metrics can support and inform a variety of business processes. This will encourage you to get to know your target customers better and to find out what their preferences are for your brand.
Take a glance at some of the main criteria for measuring processes:
Cost Per Acquisition (CPA)
Cost Per Acquisition (CPA) is a metric that adds up all the amounts spent to attract customers on the platform, separated by the number of customers you have obtained.
For instance, if you spent USD 500.00 in advertising to market your digital product, resulting in 1,000 new buyers, your CPA is USD 0.50.
A low CPA figure is a good tactic. But the most important thing is to cross-check this measure with the medium ticket result – which we will display below – to know the contribution of the marketing activities to the company.
Return on Investment (ROI)
The Return on Investment (ROI) is an essential indicator for any company. This is how to measure it: deduct the gross spent from the amount gained. The result is divided by the overall expenditure and multiplied by 100.
For instance, imagine you have invested a total of USD 1500.00 in your company, and this investment has produced a revenue of USD 10,000.00:
ROI = (10,000 – 1500)/1500 x 100
ROI = 567 per cent;
So you got around USD 5.70 in exchange for every USD 1 you spent. Your company is now producing profit and, if possible, you can increase your production and revenue.
Conversion Rate Charge on transfer
The conversion rate calculates the number of visits to the website who either make a transaction or converted to the intended action. The higher the conversion rate, the greater the results.
When you have a major traffic volume, but very low conversions, some problems can occur. The website might be not responsive, the buying and payment procedure may be complicated, or ads may be poorly segmented, thereby drawing the wrong customers to the website.
The estimate shall be based on the number of visitors converted, measured by the overall amount of visits to the website, and the sum shall be multiplied by 100.
If you had 1000 visits to your website last month that produced 300 conversions, for instance, the calculation will be as follows:
(300/1,000) x 100 = 30%.
Average ticket is a significant sales metric that indicates the total amount paid by the consumers. Many people are mesmerized by a large number of purchases, however this does not indicate substantial value if, for instance, each transaction does not cover the costs of acquisition (CACs).
If your company’s average ticket is small, thinking of tactics to promote cross-selling and up-selling is possibly realistic. The estimate comes from the monthly sales divided by the amount of clients in the same timeframe. If the sales was USD 10,000 and the number of transactions was USD 300, the average ticket for each client is USD 34.
Cart abandonment rate
This sales metric is essential for evaluating problems that may emerge at the end of the buying process. When the customer enters this point, they show their interest in the product, however there is an issue — for instance, the delivery cost or the payment options available are small.
For instance, 500 users have begun the check-out phase and only 300 have finished the transaction. Then the cart abandonment figure is 40%.
Monthly Growth Develop Weekly
The monthly growth measure must be calculated, allowing for an annual review and a plan for long-term targets. The sum may be calculated by subtracting the revenue of the prior month from the income of the current month. The sum must be measured by the sales of the previous month and multiplied by 100.
Then: this month, the brand’s overall income was USD 10,000 and the prior month’s income was USD 7,000. Your growth was 42 percent.
(10,000-7,000)/7,000 x 100 = 42
Whether or not this sales metric is sufficient relies on an overview of the industry’s growth data or a few months of testing to determine the metrics required to establish a good norm.
Net Promoter Score (NPS)
The level of customer satisfaction (NPS) makes it easier to distinguish customers who really liked the product. In comparison to the qualitative satisfaction study, NPS evaluates customer satisfaction in percentages.
It is also possible to distinguish clients with critical views ranked below 6, favorable clients rated between 6 and 8 and promoter buyers rated at grades 9 and 10.
This form of surveys must be designed with queries like, “From 0 to 10, how will you rate our service / product?” Or “from 0 to 10, how likely are you to suggest this brand to someone else?”
This form of survey can be sent after payment via e-mail or by a web plug-in, for instance.
Transform sales metrics to actions
It takes a lot of time to evaluate and collect sales metrics. It is then important to record them and to build successful structures that really aid to turn statistics into realistic ideas.
Initially, the whole procedure will seem somewhat complicated, but as time progresses, it would be easier to retrieve the correct insights from the data.