One of my favorite things about the clients we serve is how driven they are. They are full of brilliant ideas, believe in the work they do, and are constantly creating goals to serve their ideal clients the best way they can.
And for many of these goal-oriented entrepreneurs, setting targets and striving for success is part of the daily grind, as it should be. For example, launching a new program and identifying how many new members to have enrolled at the completion of their launch, or generate 7 figures in their business for the first time.
However, achieving those goals can sometimes seem elusive or challenging. One of the reasons for this disconnect lies in a lack of understanding and tracking of key performance indicators (KPIs).
In this blog post, we will explore the importance of knowing your numbers and how tracking critical KPIs can help increase your effectiveness in both goal setting and goal achievement.
The importance of KPIs for All Small Businesses
KPIs are quantifiable measurements that help you evaluate the success of your business in meeting its objectives. Knowing and tracking these numbers is crucial for understanding how well your business is performing and identifying areas that require improvement. By monitoring KPIs, you can make informed decisions, set realistic goals, and create actionable plans to achieve them.
KPI’s also help you set realistic goals on future initiatives. Knowing your KPI’s means knowing the quantifiable data to your business, so that when you set out to stretch these numbers, you have a clear starting point. For example, if you are launching that new program and you want to have 100 members in your program, but you’ve never launched a program in the past, it’s difficult to create a clear tactical plan for how you will achieve this. As a result, that goal is just that, a goal.
Common pitfalls of not tracking KPIs
Many business owners set goals without a clear understanding of their current performance or the key metrics that drive their success. This can lead to:
- Setting unrealistic or unachievable goals
- Struggling to identify the best strategies to reach your goals
- Wasting resources on ineffective tactics
- Frustration and disappointment when goals are not met
By not tracking KPIs, entrepreneurs may miss out on valuable insights that could help them make more informed decisions and achieve their goals more efficiently.
Think about it, how do you repeat your success if you have no idea what actually worked in the first place?
Essential KPIs for Entrepreneurs to track
While the specific KPIs you should track depend on your business and industry, some critical metrics are applicable to most entrepreneurs:
- Leads & Opportunities: This is the number of qualified contacts that are coming in each month.
- Value of Your Pipeline: This metric covers your open, closed and lost opportunities. When you’re tracking the value of your lead opportunities and how often one of those leads close, you have both financial projections and a Lead Conversion Rate.
- Lead Conversion Rate: The percentage of leads that turn into customers. This KPI helps you understand the effectiveness of your sales funnel. For example, if you have a goal to bring in 100 new members to your course and your KPI’s indicate you have a 50% conversion rate, you need to bring in 200 qualified leads to reach your membership goal.
- Customer acquisition cost (CAC): The average cost of acquiring a new customer, which includes marketing and sales expenses. Keeping track of CAC allows you to optimize your marketing strategies and ensure you’re spending your resources wisely and know where to spend.
- Customer lifetime value (CLV): An estimate of the total revenue a customer will generate for your business over their lifetime. Tracking CLV helps you determine the long-term value of your customers and informs your customer retention strategies.
- Net promoter score (NPS): A measure of customer satisfaction and loyalty calculated by asking customers how likely they are to recommend
Simple Next Steps
Now that we’ve covered some essential KPIs for entrepreneurs, let’s discuss how to track them effectively and use them to improve your goal setting and achievement:
- If you’re just getting started, the number one thing to keep in mind is that your systems are only as good as your ability to maintain them. Having a tool like Automation on a Mission is a great way to start creating KPI’s because much of the work can be done for you and gives you real time answers whenever you need them.
- Use a pipeline that allows you to track your sales process from the time someone enters the top of your funnel (Need more info on your funnel? Check out this blog post as the start of a 3 part series on your funnel). Tracking leads in, value of a lead, closes and won opportunities can be a game changer in creating quantifiable goals.
- Monitor progress and adjust strategies: Regularly review your KPI data to assess your progress towards your goals. If you’re not on track, analyze the data to identify areas that require improvement and adjust your strategies accordingly.
- Celebrate successes and learn from failures: When you achieve a goal, take the time to acknowledge and celebrate your success. Conversely, if you fall short, use your KPI data to understand what went wrong so you can create a new path for the next time.
How do your numbers look? Are you tracking your KPI’s for quality control and future goal setting? Let us know how your system looks in the comments section below. And if you’re not using anything to track your progress, then let’s hop on a call. We love helping entrepreneurs just like you build systems and processes that scale. That’s what Automation on a Mission is for. You can schedule a free consultation here.