4 Business Metrics You Need to Start Measuring in 2015

Every business has some flagship metrics that it obsesses over. It could be Gross Merchandise Value for ecommerce firms, it may be Revenue per Page for publishing firms, and so on. Marketers have even more narrow metrics that occupy their time and attention all year long. From social media engagement rate to email open rates to cost per acquisition via search, our lives are dictated by the rise and fall of very, very specific numbers.

Trouble is, in all this micro-data that we chase, we often miss out the big picture. How many of us know how happy our customers are? How many companies check what happens to customers who just drop off the map after one purchase? Isn’t it time that we opened our minds and discovered the stuff that actually drives the change in our businesses instead of coping with the changes after they happen?

Here is my list of top four metrics to track in 2015.

1. NPS
NPS or Net Promoter Score is not a new concept. Tons of companies already use it to understand where they stand from a customer’s perspective. What I would like to see this year is this metric going mainstream. Instead of just saying that you’re a customer-focused company, become a customer-focused company by asking your customers what they think about you.
In simple terms, Net Promoter Score shows how popular your company is and how satisfied your customers are. The NPS model consists of dividing customers into

a. Promoters: Customers who are very satisfied with your company and would recommend it to others.
b. Passives: Customers who are neutral towards you; they’re satisfied but would not go around recommending your company to others.
c. Detractors: Dissatisfied customers who actively dissuade others from using your products.


Simply finding out about how your users feel about your company does no good. For the NPS system to work, the feedback received from each user needs to be plugged back into the system and conveyed to the employee whose work directly impacts the experience the said user had.

If even gigantic organizations like the Walt Disney Company, Intuit and eBay can implement this system across the length and breadth of their organizations, smaller setups can definitely succeed with it.

2. Customer Retention Rate
When one thinks of marketing, the mind automatically pictures various ways and means of acquiring new customers. But how about the customers whom you have already acquired? What are you doing to keep them coming back? Or is that left completely to chance?

In an ideal world, every marketer would want to retain every single customer that they acquire forever. Customer Retention Rate measures the probability of a new customer returning to make repeat transactions with your company.

Customer Retention Rate = Total no. of Customers – No. of New Customers / Number of Customers at the Beginning of the Period x 100
A high retention rate signifies a high number of satisfied customers who come back again and again. This means your marketing and processes are on track. On the other hand, a low retention rate points to problems in your marketing cycle which need to be addressed immediately. Lower retention rates could mean:

a. An unsatisfactory user experience that dissuades new users from returning to you
b. Not enough new acquisitions
Knowing these issues with your marketing is the first step towards fixing them and getting the most out of the millions that you spend each year trying to acquire newer and newer customers.

3. Customer Life Time Value (CLTV)
Customer Life Time Value should be the most important metric that drives marketing efforts. CLTV basically measures the net revenue every single customer will generate over her lifetime association with your company after taking into account the cost of acquiring her. In other words,

Customer Lifetime Value = (Average Order Value per Customer) x (Number of Orders per Year) x (Customer Retention Period) – (Cost of Acquiring the Customer)
Most marketers simply concern themselves with the average order value and rest happy with their acquisition. Little thought is given to how long a customer will last with the company, how much money is spent in acquiring the customer or even how much it costs to service the customer.

So, why would you need to know CLTV? Firstly, CLTV is not one absolute figure. Your CLTV will differ based on customer segments. A high frequency, low order value customer will have a very different CLTV as compared to a low frequency but high order value one. Understanding the CLTV of each customer segment allows you to take informed decisions on how much money to allocate on servicing a particular customer segment, how much to spend on acquiring a certain segment and so on.

Drawing up a customer acquisition budget without knowing the CLTV of your customers is akin to shooting in the dark hoping hard that you hit something. Research shows that customers segmented based on their CLTV tend to be more profitable for an organization in the long run.

4. Mobile Conversions
2014 was decisively the year that smartphones overtook desktop Web browsing. Finally all those years of proclaiming “This will be the year of mobile!” actually bore fruit. Even Google announced how it was going to use mobile optimization of a site as a ranking factor on its search results pages. So, if you hadn’t optimized your website, email and all other customer facing functions for smartphones, you probably lost out on a big chunk of the action last year.

With mobile devices coming into their own only in 2014, the focus so far has been on mobile as a traffic source. Brands competed with one another to attract users via their mobile devices without much thought to what happens after that.

2015 is the year when you look beyond acquiring traffic from mobiles and work on how this mobile generated traffic can convert into paying customers. Instead of focusing only on your web-related statistics from, say Google Analytics, now is the time that you plug in all your various analytics – from social, email, client projects, finance and offline sales tools – into a consolidated “business dashboard” like Cyfe.


Consider the value of your users in proportion to the costs that you’ve incurred on them across various channels in one snapshot. This will tell you which customers to focus on and which are already doing well.

Wrapping Up
These were the top contenders from my perspective that will rock 2015. Did you use any other holistic metrics last year that worked wonders for you? We’d love to know what they are and why you think they matter. Please share your thoughts in the comments section below.


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