What are the main KPIs to monitor and grow an online business?

Insights from Icarus Media Digital

Selecting the most appropriate KPIs

It’s never been easier to gather data points on your business. However, when it comes to KPIs, less is often more. Success comes from narrowing your focus to the KPIs that give you the most accurate picture of the health of your business and how well it’s progressing toward its goals.

Marketing and Sales Performance KPIs

Conversion Rate (CR)

Your conversion rate gives you the percentage of a particular group of people who take a specific action that you desire, for example, the number of people who purchase your product in response to a particular email or social media post.

Customer Acquisition Cost (CAC)

Your customer acquisition cost is the total cost of bringing a paying client into your business.

Return on Ad Spend (ROAS)

Your return on ad spend shows how effective your advertising is as a revenue driver. You can calculate ROAS for a digital marketing campaign with this simple formula:

Revenue KPIs

Average Revenue Per Customer/User (ARPC/ARPU) and ARPPU

As the name describes, average revenue per customer or user is simply the revenue an individual client brings into your business on average. It’s a powerful metric for tracking the impact of price changes.

Monthly Recurring Revenue (MRR)

Monthly recurring revenue is a great KPI to track for any business with a membership or subscription model attached to it. For example, many business tools have a monthly fee attached. Some coaching programmes charge a monthly fee for access to specific information or group coaching.

Client KPIs

Customer Retention Rate (CRR)

An ambitious online business will typically want to retain customers or users and acquire additional ones. Your customer retention rate shows how successful your business is at keeping your user base.

Customer Lifetime Value (CLTV)

Your customer lifetime value indicates the total revenue you can expect from each paying user or client you onboard during their relationship with the business. Upselling and reducing customer churn are strategies that enhance this measure over time.

Financial KPIs

Net Profit Margin (NPM)

It’s critical to keep an eye on the profitability of your online business as you grow. Increasing revenue can easily get lost in spiralling costs. Net profit margin is an effective KPI to ensure that increased revenue results in increased profits.

Quick Ratio (QR)

Many profitable businesses fail due to running out of money by not managing their cash flow. The quick ratio shows how easy it is for the business to cover the money it owes through assets that are easy to convert into cash. You can calculate the quick ratio as follows:

Conclusion: maximise success with KPIs

Establishing and tracking KPIs is an excellent step towards growing your online business. To maximise your success, we recommend assigning ownership for your KPIs. In this model, a designated person has accountability for the performance driving each KPI, even if the KPI ultimately represents the performance of a team of people. Some businesses link remuneration to their KPIs to ensure alignment between employees and business goals.

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Icarus Media Digital

At Icarus Media Digital, we create new ventures from the seed of a new idea, right through to its launch and scaling a new, successful business.