Do you want to know what the best decisions are? Data driven ones! Thanks to technology, we are becoming more aware of the decisions we make and how they affect our day-to-day lives.
Let’s look at Joe. Joe wakes up and has a busy day ahead of him. He checks the weather (which is gathered through data) so he knows what to wear. He checks the traffic (which is also gathered by data) so he know which route to take. Unfortunately, Joe doesn’t check his calendar and is late for his meeting. Assumptions get Joe into trouble. Data does not.
Statistical data is used throughout our lives. Whether you have a small business or a startup that needs a boost in sales, here are the statistical numbers to pay attention to.
Monthly Revenue
Your monthly revenue is what your business generated from sales and other sources. You want to keep an eye on your monthly revenue for a couple of reasons. First, gross revenue is closely tied to your profit. Are you producing enough gross income to sustain your business? Second, by meeting your monthly goals, you can meet your annual revenue numbers. If you see that you’re not meeting your monthly objectives, you’ll need to reduce your expenses.
Margin Goals
One of the hardest parts about being in business is knowing how to price your products and services. The price you charge should be high enough to cover costs and bring some revenue to your business. At the same time, it can’t be too high or your customers will choose a competitor instead. To determine the right pricing, assess industry data to determine a good benchmark. When pricing, also consider your gross margin, customer demand and competition.
Closing Ratio
Your closing ratio refers to the number of sales closed compared to the number of potential customers. If you delivered 10 presentations and 2 customers closed, your closing ratio is 20%. On its own, this number doesn’t tell you a lot about your business’ performance. But, it’s a good indicator of how well your sales reps are closing deals. Keep in mind that industry trends and increased competition can affect these numbers.
Retention Rates
How many customers return to your business to make another purchase? If retention numbers are high, you need to figure out why customers aren’t returning. This is a great reference to use when calculating retention rates for your industry. Even though retention rate goals can vary, the higher, the better. When customers return, it’s a strong sign that your business is healthy.
Don’t let numbers scare you away. By gathering the appropriate data and analyzing the numbers, you can make smart, data-driven decisions that increase sales – not drive them down.
