The 11 Most Critical Metrics for CFOs

FOR CHIEF FINANCIAL OFFICERS

THE! ! MOST!

LET’S START WITH...

WHY YOU NEED METRICS

BUSINESS

TRACKING YOUR METRICS

YOUR

DRAMATICALLY

RESULTS

IMPROVE

WILL!

have to say about EXPERTS

What do the

metrics &

dashboards?

Good marketers MEASURE.!

Metrics are critical to ensuring that your marketing is aligned

with your business objectives.

SETH GODIN

“

”

PETER DRUCKER

IF YOU CAN’T!MEASURE IT, !YOU CAN’T !IMPROVE IT.!

“

”!

COMPANIES TRACKING THEIR METRICS IN DASHBOARDS REALIZE:

YEAR-OVER-YEAR

THAN THOSE WHO DON’T.

YEAR-OVER-YEAR

&

MEASURE

EVERYTHING OF SIGNIFICANCE.

ANYTHING THAT IS

IMPROVES.

MEASURED AND WATCHED,

Bob Parsons

“

”!

THE BOTTOM LINE

you

REFUSE ACCESS

SUCCESS

TRACK YOUR METRICS, WHEN YOU CHOOSE NOT TO

TO THE INFORMATION THAT BREEDS YOUR

SO WHICH METRICS SHOULD YOU TRACK?

FOR CHIEF FINANCIAL OFFICERS

THE! ! MOST!

1. NET INCOME

NEED A PROFIT & LOSS UPDATE IMMEDIATELY?

TRACK YOUR NET INCOME

SECONDARILY, ASSESS SALES BY:

• AFFILIATE • REGION • PRODUCT, ETC.

2. TOTAL SALES

SALES MINUS VARIABLE COSTS

CONTRIBUTION MARGIN =

*VARIABLE COSTS INCLUDE COGS, ADVERTISING, REFUNDS, COMMISSIONS, ETC.

*

3. CONTRIBUTION MARGIN

CONTRIBUTION MARGIN IS A GREAT INDICATOR OF THE

OVERALL HEALTH OF YOUR BUSINESS

3. CONTRIBUTION MARGIN

CURRENT RATIO = CURRENT LIABILITIES

CURRENT ASSETS

4. CURRENT RATIO

CURRENT RATIO INDICATES YOUR LIQUIDITY, ASSESSES YOUR ABILITY TO MEET OBLIGATIONS,

AND MEASURES YOUR FINANCIAL STRENGTH

4. CURRENT RATIO

SELF-EXPLANATORY. MONITOR YOUR CASH 24/7

IF YOU RUN OUT, YOU’RE DEAD

5. CASH BALANCE

THE RELATIONSHIP BETWEEN MEASURE THIS

IS WHAT’S CRITICAL SPOT TRENDS AND FIX PROBLEMS AD COSTS AND SALES DAILY, WEEKLY & MONTHLY TO

6. ADVERTISING COST VS. REVENUE PER SALE

ASSESS EACH INDIVIDUAL SALES REP

TO IDENTIFY WHERE HIS OR HER PERFORMANCE CAN BE IMPROVED

7. SALES TEAM CONVERSION FUNNEL

KEEPING CLIENTS LONGER DRAMATICALLY IMPROVES PROFITABILITY

8. CLIENT RETENTION

THEN SEND THEM AGAIN AND CRAFT MORE LIKE THEM

ALWAYS HAVE A RUNNING LIST OF YOUR TOP PRODUCING EMAILS. THEN, ANALYZE YOUR WINNING EMAILS TO UNDERSTAND WHY THEY WORKED.

9. TOP REVENUE GENERATING EMAILS

LEADS AND CUSTOMERS ARE

THE LIFEBLOOD OF YOUR BUSINESS

10. NUMBER OF LEADS/CUSTOMERS

BOOSTING LIFETIME CUSTOMER VALUE MAXIMIZES PROFITS, AND UNDERSTANDING LCV ALLOWS YOU TO OPTIMIZE YOUR ADVERTISING,

AS YOU KNOW PRECISELY HOW MUCH YOU CAN SPEND TO ACQUIRE A CUSTOMER

11. LIFETIME CUSTOMER VALUE

Now that you know WHICH

metrics to track,

The next step is

HOW to figure out

to track them

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API = APPLICATION PROGRAM INTERFACE

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WELCOME TO

OUR WORLD OF METRICS

GUIDINGMETRICS.COM

LET’S STAY IN TOUCH

[email protected] (800) 476-0423

DAVE LAVINSKY

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[email protected] (800) 476-0423

DAVE LAVINSKY