Sales Metrics look at how well (or badly) the business is identifying potential customers, engaging them or capturing their attention, communicating to them about its products or services and marketing offers, and then convincing them to buy its products or services. This process of finding and converting new customers is referred to as the Sales Funnel, although the exact process will vary dependent on the business or industry, the product or service being sold, and the type of customer being sold to. [Read more…] about Sales Metrics 2
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MIS: Elements of a Management Information System
PROFIT & LOSS ACCOUNT
Unit sales
Value sales (before discounting, net of discounts)
Variable costs – raw materials
Variable costs – inbound delivery, labour, packaging, fulfilment
Total variable costs
Fixed costs – salaries, overheads, premises costs (rent/mortgage, utilities)
Profit before non-cash costs [Read more…] about MIS: Elements of a Management Information System
Dynamic Business Metrics
Most businesses rely heavily (if not, exclusively) on traditional business metrics such as those which arise from the accounting records and financial statements: profit and loss (income, costs and profits), balance sheet movements (assets, liabilities and shareholders’ funds), and cash flow. These financials provide a robust view of the company’s performance in a given period, and changes over time show important trends which need to be heeded. But, they suffer from being historical and after-the-fact and, as a result, can lead to slow and ponderous decision-making which is less effective in our highly disrupted, competitive, tech-driven economy.
The alternative is make greater use of dynamic metrics, numbers which are rapidly available (if not available in real-time) and which allow for faster decision-making and taking advantage of more immediate threats and opportunities. [Read more…] about Dynamic Business Metrics
Business Metrics: Risk
Risk Metrics will be viewed by risk managers (where the company has a separate risk function) or by its Board or senior management team (functional directors) in a smaller business. They will also be of importance to external stakeholders such as investors and lenders/creditors. The company should track areas of risk and uncertainty which hold the greatest potential danger for the business if external shocks or changes were to cause sales to decrease or other deterioration of the company’s results. Cash flow is considered the primary risk metric as it gives a clear indication of both the health and sustainability of the business.
Typical risk metrics may include:
1. Net cash flow in a given period and over the last few periods or years. This is particularly important if negative (cash outflow). [Read more…] about Business Metrics: Risk
Business Metrics: Profitability or Efficiency
Profitability or Efficiency Metrics will be viewed by Production, Operations and Fulfilment/Logistics departments and show the efficiency with which the company is creating and delivering its products or services to its customers.
Typical profitability metrics may include:
1. How much it costs to make the product being sold, e.g. unit costs by product or by product category, total costs of goods sold (in aggregate, or split out by specific item of production). [Read more…] about Business Metrics: Profitability or Efficiency
Business Metrics: Sales or Revenue
Sales or Revenue Metrics will be viewed by the Sales or Marketing departments and show how well (or badly) the company is performing at selling its products or services in the marketplace. All sales-related numbers are included, including those which look at sales from the top-most, big-picture level (e.g. how much did we sell in USA last month), right down to the most granular (how many people responding to one particular pay-per-click campaign went on to buy the product being advertised).
Typical sales metrics may include: [Read more…] about Business Metrics: Sales or Revenue
Functional Analytics: Marketing
Marketing Analytics uses data (marketing/sales/order data) to describe, explain and predict customer behaviour. It allows management to make better business decisions, to optimise marketing tactics and strategies, improve the company’s results and achieve its goals.
There are three kinds of analytics: descriptive, predictive and prescriptive. [Read more…] about Functional Analytics: Marketing