Important Metrics for Your Business

By Eric Dickmann

April 22, 2019

Business Metrics, Employee Happiness, Gross Margin, Key Performance Indicators, KPI's, Met nd Overdue Milestones, Metrics, Monthly Website Traffic, Net Profit Margin, Net Promoter Score, Sales Growth Year-To-Date, Sales Revenue

Every business should be actively tracking its progress. They should be measuring where the business is, relative to where it has come from and where is it going. Over time, this data will tell a story and guide your strategy. It’s important to understand what business metrics are most important to tell that story and how you need to collect the data to build them.

Business metrics are data points used to measure performance. They are sometimes called KPIs or Key Performance Indicators. Metrics are tools that communicate a company’s progress towards the fulfillment of its strategy. They show trends, problems areas, and opportunities for growth. But for any metrics to be meaningful, they must be based on a foundation of good data. For numbers not to lie, the data has to accurate.

Definition of a Business Metric

A business metric is a quantifiable measure that use to track, monitor and assess the success or failure of business processes. Some organizations outline them in mission statements, while others incorporate them in the strategic plans of various departments. What’s important is that the metrics are uniform. There’s only one version of the truth and that needs to be propagated across all departments.

Why Do We Need Metrics?

Metrics drive improvement and help businesses focus on what’s important. They help employees, departments, and managers see how they are performing. Metrics allow for tangible goals to be set and then monitored for achievement. “We need to increase sales” may sound good but it’s not actionable or measurable. “We need to increase sales 15% by December 31st” is a metric that can be measured. Actions can be taken as progress towards the goal is monitored. Metrics are tools managers need to make informed decisions about the business.

What are the Important Metrics a Business Needs to Measure?

There are hundreds of potential metrics, but there’s no use in measuring all of these. Only track those that are key indicators of how your business is performing. Here are some popular business metrics that indicate growth or decline:

Business Metrics

Sales Revenue

The formula for calculating sales revenue is income minus expenses. Such a result shows whether people are interested in buying your product or service.  It also indicates if your marketing efforts are paying off.

Net Profit Margin

To get the net profit margin, deduct all sales expenses from the monthly revenue. This shows the efficiency of the company in generating profit. It is also a way to predict long-term business growth.

Gross Margin

This metric is especially important for startups. The Gross Margin equals your company’s total sales revenue minus its cost of goods sold, divided by the total sales revenue. The higher it is, the more a company earns. Likewise, it can reflect improved processes and production.

Sales Growth

Sales Growth year-to-date implies the pace at which your company’s sales revenue is increasing or decreasing. Subtract last year’s number of sales to your present year sales. A positive number indicates gain and a negative is a loss.

Net Promoter Score

Net Promoter Score reflects on the quality of your product and the level of customer satisfaction. It shows how many people are likely to recommend your product/service to a friend. This marketing metric can be measured on a ten-point scale by conducting customer surveys and interviews.

Monthly Website Traffic

Use a free marketing tool such as Google Analytics to track your monthly website traffic as well as the traffic sources, to understand how people find your site. The more people hear about your product, the more likely they are to check out your web page. This is also a good indicator of the performance of your brand awareness campaigns.


Set up various project milestones and keep track of whether they’re met on time. You can get an overview of your team’s capacity by checking the number of met and overdue milestones.

Employee Satisfaction

Happy employees = productive employees. Research suggests that we are 12%more productive when we’re happy at work. Conduct team surveys to collect quick feedback on the teamwork and personal satisfaction levels.


Business Metrics are data points used to measure performance. They tell a story and are important tools for measuring progress against your strategic plans. Make sure the underlying data is accurate and timely. And ensure all areas of the company use the same “source of truth” for the metrics. If you pay attention, your metrics will tell the story of your business performance and where you’ll find opportunities for improvement.

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Eric Dickmann

About the author

Eric Dickmann is the Founder / CMO of The Five Echelon Group, host of the weekly podcast "The Virtual CMO" and YouTube series "Work-Life" and a fractional CMO for a variety of small and midsize companies. An executive leader with over 30 years of experience in marketing, product development, and digital transformation, he has worked with large, global companies and small startups to develop and execute marketing strategies to bring innovative products to the market.

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