Key Metrics That Drive Success In Modern Business Analytics Practices
Table of Contents
1. Introduction
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- The Role of Data in Modern Business
- Why Are The Right Metrics Crucial
2. Why Are Metrics Essential?
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- The Rise of Data Generation
- The Problem with Tracking the Wrong Data
- The Biggest Perks Of Employing the Right Metrics
3. Get Started With Mobile Analytics Platforms
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- Growth of the Mobile App Market
- Importance of Understanding User Behavior
- What Mobile App Analytics Includes
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- Traffic Sources
- Web Analytics
- Heatmaps
- Retention Rates
- Funnel Analysis
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4. Customer Acquisition Cost (CAC)
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- What Do You Know About CAC
- Why CAC Matters
- How to Calculate It
- Common Costs Included in CAC
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- Promotional Offers
- Marketing Strategies
- CRM Software
- Sales Salaries & Commissions
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5. Customer Retention and Engagement Metrics
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- Why Is Customer Retention Essential
- Customer Lifetime Value (CLV)
- Repeat Purchase Rate
- Churn Rate
6. Average Order Value (AOV)
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- What AOV Measures
- Why AOV Is Important
- How to Calculate AOV
- Difference Between AOV and CLV
7. Financial Health Metrics
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- Revenue Growth Rate
- Operational Costs
- Importance Of Financial Tracking
8. Conclusion
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- How Key Metrics Offer Clarity
- Using Metrics to Guide Business Decisions
It’s safe to say that the entire business world revolves around data. Every single interaction, purchase, and other thing is recorded in a particular place. Although all of this sounds pretty intriguing and interesting, keep in mind that oftentimes, it can be quite confusing, as well.
The entire point of business analytics isn’t about dealing with the dashboards and spreadsheets 24/7, but choosing the right metrics that are going to help businesses of all sizes thrive.
It doesn’t matter whether you’re new to the business landscape or not; you should always aspire to learn about the most crucial metrics in modern business analytics. If you’re genuinely interested in that, then stay tuned because this guide is about to further dive into this topic.
Why Are Metrics Essential?
The situation has drastically changed as far as this is concerned. Nowadays, the vast majority of companies produce more information in just one month than they used to in one year. How come?
Well, that’s because they have various sources, such as cloud storage, CRMs, different marketing platforms, and other places that provide them with information. But does it mean that they’ll receive all the right pieces of information because of this?
Not necessarily. If you do not know why you are tracking a particular data in the first place, then you’ll be only wasting your time. These are the moments when you’re supposed to embrace the right metrics. With them, you will:
- Know exactly what’s going on
- Reduce risk
- Detect any issues on time
- Boost your performance
- Forecast future outcomes
Besides all of that, when you’re employing the proper metrics, you’ll be able to make decisions that will benefit you and your firm.
Get Started With The Mobile Analytics Platforms
In recent years, the mobile app market has experienced a major growth and has become extremely competitive; hence, it’s of huge importance for all the mobile app developers to comprehend how users interact with their apps.
That’s something that’s going to give you a competitive edge. If you’d like to better understand the overall user behavior and how they utilize your product, then you should make use of a reliable Mobile App Analytics Platform that’s designed to give you insight into this important data. This tool is intended to help you figure out what’s generally working, what causes problems among users, and which experiences give you both positive and negative outcomes.
Furthermore, mobile analytics encompasses any piece of information that your app collects about the mobile users’ performance. The best examples of it include the following:
- Traffic sources
- Web analytics
- Heatmaps
- Retention rates
- Funnel analysis
Are You Familiar With The Customer Acquisition Cost?
This one can be defined as a metric that’s going to help you calculate the overall cost of obtaining a new customer. It involves every single cost that’s linked with marketing, sales, and many other activities that are here to help you attract and retain a prospective customer.
The whole point of this metric is to help you figure out if your marketing and sales efforts are effective enough. If, by any chance, you conclude that your customer acquisition cost is relatively low, then it means that you are managing to acquire new customers without breaking the bank, which is definitely a positive thing for your organization’s growth.
Calculating CAC isn’t as challenging as you may think. All you need to do is to split the total expenses of acquiring new customers by the number of customers you acquired within a particular timeframe.
The costs you’ll be having can encompass various expenses that are related to:
- Promotional offers and discounts
- Your marketing strategies
- CRM software
- Sales personnel salaries and commissions
Moving On To Customer Retention And Engagement Metrics
Attracting and acquiring a customer doesn’t necessarily need to be all that difficult, but keeping it is a whole different story, and that’s something that you should always prioritize. Retention is typically less costly in comparison to acquisition.
A lot of businesses today rely on the Customer Lifetime Value because it tells them how much money they will earn from the average customer. The higher it is, the better your financial situation is going to be.
If you’d like to know whether a particular consumer is loyal to your brand or not, then you should consider using the repeat purchase rate metric, because it’s going to tell you if someone is truly devoted to your company, or they perceive it as nothing but a temporary choice.
Another metric that you could try out is the churn rate, which indicates the number of people who no longer want to utilize your services and/or products. If it’s high, then it certainly isn’t a good sign!
Why The Average Order Value Matters?
Even though it’s great when you have great sales and lots of customers, that’s something that isn’t always mandatory. What you actually need is more revenue. If you’d like to accomplish that, then you should focus on boosting your average order value.
So, what does it represent? Namely, its goal is to track the average dollar amount spent every single time someone orders from your mobile app or your site. Unlike CLV (customer lifetime value), which in the beginning employs individual customers, AOV starts with revenue.
If you would like to calculate the average order value of your company, then just split the total revenue by the number of orders.
The Importance Of The Financial Health Metrics
You can offer top-notch services and have the best product in the world; however, if your existing financial situation doesn’t show any signs of improvement, then it definitely isn’t a good thing, and you cannot look forward to anything positive in the future when it comes to this.
In these types of situations, you can make use of the revenue growth rate to get an insight into your financial health or operational costs to effectively monitor your expenses.
The whole point of “working” with the key metrics is to have a crystal clear picture in your mind when it comes to your business and whether you should alter something or not. That’s precisely why you should always “consult” them whenever you’re in doubt.
