Metrics – Hello, fellow entrepreneurs! Are you looking for a way to develop your business so that it continues to grow and develop? If yes, then you must understand important metrics that can help you monitor your business performance. Metrics, or performance indicators, are quantitative data used to measure the progress of a business. By monitoring the right metrics, you can identify areas that need improvement and make the right decisions to drive growth. Of course, relevant metrics can vary depending on the type of business you run. However, there are some general metrics that every entrepreneur needs to pay attention to. So, let’s discuss them one by one!


Earnings and Revenue Growth

The first most important metric is revenue. This is the amount of revenue you earn from selling a product or service. The higher the income, the better, right?

However, don’t just focus on income figures. You also need to monitor income growth over time. Does your income continue to increase every month or every year? If not, then you need to find out the cause.

Slow or stagnant revenue growth could be a sign that you need to change your marketing strategy, improve product quality, or even launch a new product.

Operating costs

Apart from income, you also need to monitor your business operational costs. Operational costs include all expenses needed to run a daily business, such as employee salaries, office rent, raw materials, etc.

Ideally, operational costs should be lower than revenue. If operational costs continue to increase without being balanced by an increase in income, then you could experience losses.

To control operational costs, you can look for ways to save expenses without reducing the quality of products or services. For example, by looking for cheaper suppliers of raw materials or optimizing existing resources.

Money flow

Cash flow is a metric that shows the flow of money in and out of your business. Positive cash flow means you have more money coming in than you have going out, while negative cash flow means you spend more money than you take in.

Healthy cash flow is essential to ensure your business has enough liquidity to pay bills, employee salaries, and other operational costs. If your cash flow is often negative, then you may need to look for ways to increase income or reduce expenses.

To monitor cash flow, you can make a monthly or annual cash flow report. That way, you can see cash flow patterns and take precautions if necessary.

New vs. Return Customer Ratio Old Customers

The next metric that matters is the ratio of new customers compared to existing customers. New customers show your business’s ability to attract new consumers, while old customers reflect customer loyalty and satisfaction.

Ideally, you want to see an increase in the number of new customers every month or every year. This shows that your marketing and sales strategy is successful in reaching potential new customers.

However, don’t ignore old customers. Maintaining existing customers is more economical than looking for new customers. Therefore, it is important to continue to increase the satisfaction of old customers and build their loyalty to your business.

Conversion Rate

Conversion rate is a metric that shows how many potential customers actually buy your product or service. For example, If your website receives 100 visitors and 10 of them make a purchase, then your conversion rate is 10%.

The higher the conversion rate, the better, because it means your marketing and sales strategy is successfully convincing potential customers to buy. However, if your conversion rate is low, then you need to reevaluate your marketing and sales strategy.

To increase conversion rates, you can try various tactics, such as improving product descriptions, providing more customer reviews, or offering attractive promotions and discounts.

Customer Acquisition Costs

Customer acquisition cost (CAC) is the amount of money you spend to get one new customer. This metric is important to ensure that your business doesn’t spend too much money recruiting new customers.

In calculating CAC, you need to divide the total marketing and sales costs by the number of new customers acquired during a certain period. The lower the CAC, the more efficient you are at acquiring new customers. However, if your CAC is too high, you need to look for ways to optimize your marketing and sales strategies to be more cost-effective.

Customer Lifetime Value

Customer lifetime value (CLV) is a metric that shows the amount of revenue you expect from a customer as long as they remain loyal to your business.

A high CLV means your customers buy your products or services regularly and are loyal. Conversely, a low CLV could be a sign that you need to work harder to retain customers and increase their loyalty. To increase CLV, you can try various strategies, such as offering a loyalty program, improving the quality of customer service, or launching new products that suit customer needs.

Net Promoter Score (NPS)

Net Promoter Score (NPS) is a metric that measures how likely your customers are to recommend your business to others. NPS is calculated by subtracting the percentage of “detractors” (dissatisfied customers) from the percentage of “promoters” (very satisfied customers).

NPS ranges from -100 to 100, with higher scores indicating greater customer satisfaction and loyalty. A high NPS score means your customers are satisfied with your product or service and are willing to recommend it to others. If your NPS score is low, it could be a sign that you need to improve the quality of your product or service, or look for ways to build better relationships with customers.

To increase NPS, you can try various strategies, such as improving the complaint handling process, improving the quality of customer service, or even asking for feedback directly from customers and following up quickly.

Time Between Purchases

Time between purchases (purchase frequency or buy cycle) is a metric that measures how often your customers buy your products or services within a certain time period. The shorter the time between purchases, the better, because it means your customers buy more frequently.

If the time between purchases is too long, it could be a sign that your product or service is less appealing to customers or that you need to try harder to encourage repeat purchases. To shorten the time between purchases, you can try various strategies, such as offering discounts for repeat purchases, launching new products regularly, or increasing marketing and promotional efforts.

Cross-Selling and Upgrading Ratio

Cross-selling ratio is a metric that measures how often your customers buy additional products or services other than the main product they buy. Meanwhile, the upselling ratio measures how often your customers buy more expensive or more premium versions of the products they buy.

These two ratios are important because they show your ability to increase revenue from existing customers. The higher the ratio of cross-sells and upsells, the better, because it means you are successfully selling more products or services to the same customers.

To increase your cross-sell and upsell ratio, you can try various strategies, such as recommending related products when customers make a purchase, offering profitable bundle packages, or even offering an upgrade to a premium version with additional features.

Employee Productivity

Lastly, don’t forget to monitor your employees’ productivity. Productive and motivated employees will have a big impact on the growth of your business.

Employee efficiency can be assessed by a variety of indicators, including productivity per hour worked, task completion rates, and even punctuality and attendance rates. If your employee productivity is low, it could be a sign that you need to improve training, provide better incentives, or even restructure the organization.

On the other hand, productive and motivated employees will help your business grow faster, increase operational efficiency, and provide better service to customers.


Metrics are an invaluable tool for any entrepreneur who wants to see their business grow and thrive. By monitoring metrics such as revenue, operating costs, cash flow, customer ratio, conversion rate, customer acquisition cost, customer lifetime value, NPS, time between purchases, cross-sell and upsell ratio, and employee productivity, you will have an understanding better about your business performance.

However, metrics are just a tool. To achieve sustainable growth, you need to take action based on the insights provided by these metrics. Set realistic targets, create detailed action plans, monitor progress regularly, involve the entire team, and keep innovating.

By following these steps, you will have a strong foundation to achieve better and sustainable growth in your business. Good luck and good luck always!