Crafting the perfect Profitability metrics can feel overwhelming, particularly when you're juggling daily responsibilities. That's why we've put together a collection of examples to spark your inspiration.
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While we have some examples available, it's likely that you'll have specific scenarios that aren't covered here. You can use our free AI metrics generator below to generate your own strategies.
The percentage increase in revenue over a period of time, calculated by comparing current and previous period revenues.
What good looks like for this metric: 5-10% quarterly growth
Ideas to improve this metric
Expand existing product lines
Increase prices with added value
Enhance marketing efforts
Explore new markets and segments
Improve customer retention strategies
2. Customer Acquisition Cost (CAC)
The total cost of acquiring a new customer, calculated by dividing marketing expenses by the number of new customers acquired.
What good looks like for this metric: $200-$300 per customer
Ideas to improve this metric
Optimize digital marketing campaigns
Enhance sales funnel efficiency
Increase referral incentives
Leverage partnerships and collaborations
Utilise advanced audience targeting
3. Customer Lifetime Value (CLV)
The total revenue expected from a customer over their lifetime, calculated by average purchase value, frequency of purchase, and customer lifespan.
What good looks like for this metric: 3-5 times the CAC
Ideas to improve this metric
Enhance customer loyalty programs
Increase customer satisfaction
Encourage upselling and cross-selling
Provide exemplary after-sales support
Analyse and reduce churn rates
4. Profit Margin
The percentage of revenue that turns into profit, after deducting all expenses, calculated by net income divided by total revenue and multiplied by 100.
What good looks like for this metric: 10-20% for most industries
Ideas to improve this metric
Reduce operational costs
Negotiate better supplier deals
Implement cost-effective marketing strategies
Improve production efficiency
Focus on high-margin products
5. Repeat Purchase Rate
The proportion of customers who make more than one purchase, indicating customer loyalty and satisfaction, calculated by dividing the number of repeat customers by total customers.
What good looks like for this metric: 20-40% depending on industry
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