{"id":768,"date":"2021-08-02T15:42:00","date_gmt":"2023-10-18T15:42:48","guid":{"rendered":"https:\/\/www.salesforce.com\/?p=768"},"modified":"2023-10-18T17:35:28","modified_gmt":"2023-10-18T17:35:28","slug":"6-metrics-that-can-indicate-growth","status":"publish","type":"post","link":"https:\/\/www.salesforce.com\/ca\/blog\/6-metrics-that-can-indicate-growth\/","title":{"rendered":"6 Metrics That Can Indicate Growth"},"content":{"rendered":"\n

This may be the one area where parents have it easy: If they want to measure the growth of their kids they can buy an oversized wall hanging that looks like a ruler. Or simply use a marker on a door frame that charts everyone\u2019s height over a period of years. <\/p>\n

For small and medium-sized businesses (SMBs), determining whether their fortunes are on the way up \u2014 or at risk of going south \u2014 can seem a lot more complicated. <\/p>\n

As the company initially gets off the ground, for example, a lot of the data that could measure growth may be coming verbally, from a small team that provides updates about new sales and potential opportunities. <\/p>\n

Even once you\u2019ve been in business for years, taking a detailed and proactive approach to measuring growth<\/a> can get shunted to the side amid other priorities. There are products and services to be developed, marketing campaigns to be planned and customer service inquiries to address. <\/p>\n

The busier you get, it\u2019s not uncommon to simply hope it all adds up to growth somehow. Even then, though, you might not be certain of how much you\u2019re growing. That makes it harder to know where you\u2019ll need to invest further or what kind of changes you should make in your overall strategy. <\/p>\n

If you\u2019ve seen job titles like \u201cchief growth officer\u201d emerging, now you know why. <\/p>\n

A CGO will work with many different parts of a business in order to accelerate the path to growth<\/a>. Yet the only way to ensure they\u2019ll be successful is to first get a solid read on the company\u2019s existing growth rate.<\/p>\n

If you\u2019re acting as your firm\u2019s de facto CGO, here are some of the most common metrics that could help you gain the visibility you need: <\/p>\n

1. ARR and MRR<\/b><\/h4>\n

Revenue in and of itself may not tell you as much as you think. As you launch a product, offer a promotion or use other tactics to move the needle on sales, it\u2019s better to analyze revenue within a particular time frame.<\/p>\n

For most companies, that could include annual recurring revenue (ARR), monthly recurring revenue (MRR) or both. These metrics are helpful because they let you estimate what you have coming in versus what you\u2019re spending every year or 30 days. <\/p>\n

The other important element here is the \u201crecurring\u201d part. If you sell any kind of subscription-based product or service, you\u2019ll experience more exponential growth than if you have to find new customers to buy from you every single time. <\/p>\n

2. Customer Churn Rate<\/b><\/h4>\n

One of the truest measures of growth is how many customers you\u2019ve added minus how many you\u2019ve lost within the same period. For instance, gaining 10 new customers won\u2019t make a big change in your business if you also lost 10 customers around the same time.<\/p>\n

\u201cChurn rate<\/a>\u201d is used to describe the fact that there is always some degree of turnover among your buyers. By better understanding their needs, any complaints they have and being mindful about when it\u2019s getting close to the end of their contract, you might be able keep more customers longer. <\/p>\n

3. Lifetime Value Of A Customer (LTV)<\/b><\/h4>\n

Building upon this idea of churn, reducing the number of customers who leave also means you might be able to spend less on marketing and selling to attract new customers. That\u2019s because the lifetime value (LTV) of those customers is longer. <\/p>\n

A loyal customer may also be one that is open to buying more of your products and services. Imagine if you have 20 customers who paid $10 a month for one product or service. Then you cross-sell or upsell them to spend $5 more on a complementary product. Suddenly the LTV of that customer has gone up dramatically. <\/p>\n

4. Pipeline Velocity<\/b><\/h4>\n

Next, think about how long it takes for your customers to transform from a lead into an actual buyer. <\/p>\n

Maybe you\u2019re selling products or services that require a lot of explanation, or purchase approval from multiple parties. If the buying process is prolonged, your growth will be limited unless you can hire a small army of sales reps to get more deals in play.<\/p>\n

By using data to anticipate objections and provide information to streamline decision-making, though, it\u2019s possible you should shrink the cycle down a bit. That means you\u2019ll be able to potentially get more deals closed, which in turn means a much faster-growing company. <\/p>\n

5. E-commerce Sales<\/b><\/h4>\n

Many businesses have to start with reps spending time on the phone, over e-mail or in person with customers to win them over. For bigger-ticket items or more complex sales, you may always need feet on the street (even if reps are working from home).<\/p>\n

For some products and services, though, you may be able to offer the option to order online. That could speed up the sales process, allow you to target international customers and save costs elsewhere in your organization. <\/p>\n

The more digital options you offer customers, the more it might correspond to your growth as a company. <\/p>\n

6. Case Studies, Testimonials And Reviews<\/b><\/h4>\n

This last one may seem like a curious metric, and it\u2019s not something a lot of companies necessarily quantify. They should. <\/p>\n

A big part of overcoming uncertainty about making a purchase is seeing social proof. In other words, how many other people are willing to talk positively about giving you their business?<\/p>\n

Being top-rated in your industry will bolster your credibility and ease much of the marketing and selling areas of a company. It says everything about the customer experience you\u2019re providing, and can only be achieved by knowing exactly what goes into making people\u2019s lives better. <\/p>\n

These half-a-dozen metrics may be more than enough to get you started with tracking growth, but continue learning about others. Depending on your business, some will be more appropriate than others. <\/p>\n

And as you study them, you\u2019ll likely discover growth isn\u2019t as elusive as you thought. You can begin to chart a more confident course towards long-term success.<\/p>\n

<\/span> <\/p>\n","protected":false},"excerpt":{"rendered":"

If you\u2019re acting as your firm\u2019s de facto Chief Growth Officer, here are some of the most common metrics that could help you gain the visibility you need.<\/p>\n","protected":false},"author":1,"featured_media":770,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"sf_justforyou_enable_alt":true,"optimizely_content_id":"","post_meta_title":"","ai_synopsis":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"sf_topic":[4],"sf_content_type":[],"coauthors":[2],"class_list":["post-768","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","sf_topic-sales"],"yoast_head":"\n6 Metrics That Can Indicate Growth - Salesforce<\/title>\n<meta name=\"description\" content=\"If you\u2019re acting as your firm\u2019s de facto Chief Growth Officer, here are some of the most common metrics that could help you gain the visibility you need.\" \/>\n<meta name=\"robots\" content=\"index, follow, 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