8 Key Business Metrics to Track Before Christmas

Analyzing metrics and KPIs is essential to achieve stable business growth. Metrics showcase your company’s health, reveal how your business performed all year long, and provide insights for decision-making in the next year. Below, you will find essential metrics that you should analyze annually. 

Why conduct a year-end business assessment? 

December is the perfect time to look back at the past months and evaluate business progress throughout the year. Here’s how it can benefit your company: 

1. Performance analysis – year-end metrics showcase how your organization performed in terms of profitability, client acquisition and retention, marketing, and employee performance. You can compare these insights against industry benchmarks or last year’s performance to see the big picture. 
2. Identifying opportunities – with year-end data analysis, you will see where your company underperforms and notice opportunities for growth and process improvement. 
3. Resource allocation – metrics can shed light on how your human and financial resources are used. With these insights, you can prioritize funding and support new promising initiatives. 
4. Strategic goal setting – by understanding what has worked and what hasn’t this year, you can update your business strategy and set realistic goals for the next year. Say, if acquiring new clients was the biggest problem, you might want to spend more resources on marketing. 

8 Essential metrics for a year-end business analysis 

Here are the key metrics for annual business analysis. With them, you can comprehensively evaluate customer success, marketing efforts, operational efficiency, and finances. 

Gross and net profit margin 

Gross profit margin shows the overall performance and financial health of your business. A high gross margin indicates effective cost management and shows that more capital for each dollar of sales is retained. 

It is best to analyze it once a year. Monthly analysis can mislead you, for example, if your business is seasonal or you’ve recently hired employees or invested in software or equipment. Ideally, your gross profit margin should grow year over year. 

Net profit margin indicates the profit the company generates. It shows how much the company makes and can be used to predict steady growth. Business owners can calculate it in percentages. According to the NYU report, 10% is considered a healthy margin and 20% is a high margin. 

Customer lifetime value 

Customer lifetime value (CLV) shows how much you can expect to earn from one customer on average during their lifetime. It is one of the key metrics for decision-making in hiring, budgeting, and more. It also helps you identify the most valuable customer segment where you should concentrate your effort. 

CLV has insights on how much to spend on acquiring new customers and how to improve an overall customer experience. 

Sales revenue 

Sales revenue is one of the key metrics for evaluating business success. It shows whether the company can generate sales and uncovers the effectiveness of your marketing strategy. Plus, it is easy to calculate: you need to multiply the number of units sold by the average price per unit. Service-based companies should multiply the number of customers by the average cost of services. 

Ideally, the sales revenue should grow year over year. If this year’s revenue is higher compared to the previous year, it signifies that the business is growing steadily. 

Employee satisfaction 

Employee satisfaction is often the cornerstone of your business success. Happy, engaged employees are more productive and motivated, deliver better customer service, and tend to stay longer in a company. Satisfied employees can generate 23% more profits for your business. 

Tracking employee satisfaction will help you determine the current well-being of people in your team and prevent turnover and burnout. 

To measure satisfaction, use anonymous surveys in Google Forms or SurveyMonkey. Gather information about overall satisfaction, work environment, management style, and other details. Another popular metric is employee turnover. It shows the percentage of employees who left the company within a given period. A low employee turnover signifies high job satisfaction. 

Team building activities and corporate events help foster a positive culture. Moreover, they improve employee retention and satisfaction. Data shows that employees who enjoyed a Christmas party at work are 96% less likely to resign next year. 

To strengthen employee ties and increase satisfaction, try festive group activities, such as the White Elephant Secret Santa gift exchange. These exchanges promote the joy of giving and let your coworkers have fun as they guess who gave them a present. 

The MySanta app can streamline your Secret Santa at work, even if you have 100+ participants. In the app, people can share their gift preferences and add items to their wishlists. Plus, everything is recorded, and the game host can track who has bought a gift and who hasn’t, ensuring that everyone receives a present. 

Try our MySanta app

You can create wishlists, add exclusions, and communicate with your giftee secretly. Moreover, there is an option to track gifts and ensure that everyone buys a present on time.

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Customer acquisition cost 

Customer acquisition cost (CAC) is an important marketing metric. It shows how much it costs the company to acquire a new client. Ideally, this metric should equal 1/3 or 1/4 of your LTV. If your CAC is too high, it means that your sales funnel or marketing strategy is inefficient. To improve this metric, you should reconsider your promotion strategies and focus on customers who are more loyal or spend more. 

Customer retention rate

Loyal customers are the core driver of any business. Increasing retention by 5% can boost your profits from 25% to 95%. Moreover, repetitive customers often serve as brand advocates, spreading the word about your products or services. 

There are many ways to improve retention. First, ensure that you offer high-quality products and services. It is also important to deliver excellent customer service and create a positive shopping experience. 

Budget-to-actual analysis 

In addition to calculating metrics, it helps to compare the budget you’ve set for the year vs. actual numbers. Calculating the variance between the plan and factual numbers will help analyze how you manage finances and identify areas for improvement. 

If you operate a business efficiently, there shouldn’t be much difference between expectations and reality. If in some areas spending is significantly higher than planned, it may signify misallocation of resources, staffing problems, or marketing issues. It will help you make better predictions for the next year and optimize expenses. 

Also Read:

Top Holiday Team-Building Activities for Remote and Hybrid Teams

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Website traffic and social media reach 

To effectively promote your products and services online, you need to calculate digital marketing metrics. Here are the two basic ones. 

Website traffic shows how many users have visited your website. You can track this statistic in Google Analytics or a similar tool. It also helps to track where the traffic is coming from (organic search, paid ads, referrals, or else). If your traffic is lower than the industry average or your competitors, consider allocating more money to marketing, improving organic SEO, or strengthening your social media presence. 

Social media reach measures the number of unique users that see your content across multiple platforms. You can calculate it by dividing the reach of a post by follower count and multiplying it by 100. Thus, you will see what platform works best for your business and where to concentrate your marketing efforts. 

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