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KPI. Business Development Metrics 

"Business is at a standstill. Standstill. There are no losses. There is no development. Which indicators are important for business? How can we track them better? How can we react to changes, successes and failures?

Turnover is an important indicator of the development of any business. Important, but not enough. A data-driven approach allows you to track key business development metrics and helps you to optimise your sales processes. In any business, even a small one, you can only control what you can measure.
Potential ROI
The potential ROI for an online shop helps to evaluate the effectiveness of a particular advertising strategy. It provides an understanding of which type of advertising, which source (website, social networks, targeted advertising, etc.) or which advertising campaign has produced the greatest result.

Potential ROI = (profit - cost) / cost x 100%,

where profit is the income generated by the investment (e.g. sales) and costs are the expenses for marketing campaigns, advertising and promotion.

For an online store, potential ROI can be calculated for a specific marketing campaign or strategy, as well as for the overall investment in marketing and business development.

Conversion rate (conversion metric)
This is the percentage of completed actions or steps in the buying process. In the fast-paced world of sales and business, every action and decision needs to make sense. It is easier to track metrics such as
  • Number of users who have completed the onboarding process (e.g. created an account)
  • Percentage of orders paid and confirmed
Number of new CRM records
By tracking the number of new CRM records or contacts added to an online store's database, you can estimate which promotions or marketing activities have brought in the most new customers or returned old customers. This can be data from: accounts, newly created loyalty cards, e-newsletter subscribers.
  • A key indicator of business performance - growth in the number of customers and prospects
  • Allows you to evaluate how successful your marketing and advertising campaigns have been in attracting new customers and generating leads.

The TONOP software solution uses CRM data (profiles, profit data, technologies used) and forms a system of indicators to evaluate KPIs.
Cost of Customer Acquisition (CAC)
The CAC (Cost of Customer Acquisition) for an online shop is the amount it costs to acquire new customers and return old ones.

These are the costs associated with marketing campaigns, advertising, promotion of: 1) website, 2) search engines, 3) contextual advertising, 4) email newsletters, 5) content marketing, 6) SMM, 7) targeted advertising, 8) influence marketing. To understand which channel is most effective, the CAC is calculated separately for each channel. By knowing the CAC, a shop can decide which marketing channels to focus on to maximise customer acquisition at the lowest cost.

CAC = total marketing and sales spend / number of new customers

Tracking CAC:
  • Allows you to determine how much time and resources it takes to recoup your investment in marketing and new customer acquisition.
  • CAC is an indicator of "customer quality" and the effectiveness of the advertising channel: a high CAC may indicate lower quality traffic.

Customer conversion rate
It is important to track how many of your leads have made purchases and converted into customers. The customer conversion rate is a metric that reflects the percentage between the number of online store visitors who made a purchase and the total number of visitors over a given period of time at different stages of the sales funnel.

Conversion rate = (number of purchases / total number of visitors) x 100%.

A high conversion rate indicates that the shop is running efficiently and that you are attracting the right audience. A low lead conversion rate may indicate problems in your marketing and sales cycle. By knowing your conversion rate, an online store can predict future sales and revenue.

If the cost of acquiring your customers is high compared to their lifetime value, it may be time to rethink your strategy. TON OP doo ltd's platform will help you streamline processes, increase productivity and take your business to the next level.
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