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10 Critical Numbers To Determine The Health Of Your Business
by Brett Farmiloe
April 19, 2022
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What is one critical metric you track to help determine how healthy your business is?

To help business owners better understand how to determine the health of their business, we asked CEOs and business professionals for their best insights. From tracking retention rates to considering customer referrals, there are several ways that may help you determine the health of your business. 

Here are ten critical numbers to determine the health of your business:

  • Track Retention Rates
  • Determine Click-Through Rates
  • Measure Productivity vs Burnout
  • Volume of Happy Customers
  • Percentage of Return Customers
  • Analyze Year Over Year Data
  • Consider Customer Referrals
  • Determine Customer Acquisition Costs
  • Review Customer Lifetime Value
  • Leverage SEO Tools

Track Retention Rates 

One of the critical metrics for Cadence Education is student retention. Retention is a great measure of customer satisfaction. High retention rates are an indication that our schools are doing a stellar job of delivering on our brand promise to provide parents with peace of mind by giving children an exceptional education every fun-filled day in a place just as nurturing as home. In addition to monitoring retention rates, we use an NPS survey twice a year to ensure we are doing everything we can to create happy families and successful students.
- Jeanne Kolpek, Cadence Education

Determine Click-Through Rates 

One thing for us, as an insurance company, that helps us measure the health of our business is our click-through rate for quotes. While, in some ways, it can be hard to really understand intent with just a quote, seeing people ask for a rate is a good sign for us. It means that our website and content and services are relevant to them. Even if they are comparing quotes, they are seriously shopping around enough to consider us. The second end of this is the follow-through, those that actually purchase from you. But as long as our click rates are high we can know for sure that people are shopping and are looking at us for insurance is a good sign. 
- Brandon K. Berglund, Berglund Insurance

Measure Productivity vs Burnout 

The health of our business, or any business, can easily be measured by work output and productivity. One of the best ways to increase output and productivity is by making sure that your employees have the resources they need to get the job done as effectively and efficiently as possible. Providing the right resources can also combat overwork and employee burnout. For example, with content writing tasks and responsibilities, integrating predictive text software can help to catch real-time errors for better output and productivity.
- Guy Katabi, Lightkey

Volume of Happy Customers

Customer satisfaction is high on our list of key metrics. The insurance industry is vast, so an impersonal customer experience can be common. Whether we are finding insurance solutions for small businesses or individuals, we are invested in providing a quality experience for each one of our clients. Our independent insurance agents get to know their clients and their needs so they can offer affordable policies that work best for their unique situations. By catering to your clients, we ensure high customer satisfaction rates.
- Vicky Franko, Insura

Percentage of Return Customers

One critical metric to keep track of that helps determine the health of your business is customer retention rates or the number of return customers. This is not to say that customer acquisition is not important. Only that acquiring one-off customers is not as viable as acquiring those customers and retaining them. If you have a solid group of customers that use your service reliably over time, that's going to allow you to continue to grow and acquire more customers. Not having any sort of solid customer base is going to make it hard for you to predict things in the future, or how to expand your business. Keep a check on your retention rates to make sure you have a strong foundation. 
- Henry Babicheknko, Stomadent

Analyze Year Over Year Data

I always try to encourage business owners to look at year over year data vs. just month over month. Annual data gives a perspective that monthly data can’t capture. Year over year data shows how far you’ve come as a business and all the fluctuations you faced along the way due to both internal and external factors. For instance, if your business declined 30% month over month but your business is up 100% that year from where it was the year before, then that 30% drop might not be as much of a concern. It’s all about balancing the micro and the macro when it comes to determining the health of your business.
- Mike Krau, Markitors

Consider Customer Referrals 

The most important metric for us to track is referrals. Almost every home services company is built on word-of-mouth marketing, and we have to track our new customer referrals to make certain that we continually have a solid foundation to stand on. We encourage referrals simply by talking about their importance to the company with customers. It is vital to make certain that we do great work so that there are no doubts when the time comes to pass our information to a friend.
- Ralph Severson, Flooring Masters

Determine Customer Acquisition Costs 

Businesses often forget to track the cost of customer acquisition. This is a metric that helps a business to figure out how much return is received from a new customer. If you’re investing more money in expanding your customer base and getting less revenue, then things are not moving in the right direction. It also means that your marketing efforts need to be reconsidered as you’re not getting enough attention.
- Caroline Lee, CocoSign

Review Customer Lifetime Value 

If you aren't tracking Customer Lifetime Value, you don't know the true value of your business. Customer Lifetime Value (CLV) is a single metric that tells you what a customer is worth. If you have the data, you can get individual-level metrics (e.g., customer Joe is worth $225 to our company). Even if you don't have the individual customer data, you can calculate an average CLV by dividing all your sales by the total number of customer visits to get your average sale per visit. Divide average sales per visit by the number of total customers you have to get the average sale per customer per visit. Then you need to figure out how many visits your customers tend to make with you to determine the average customer lifetime value (which is just how much a customer will spend with you over their lifetime). As a business, your goal is to maximize CLV. You can do this by getting your customers to visit you more often (make more orders) or pay more per visit (order more expensive items).
- Layton Cox, Media and Entertainment Consultant

Leverage SEO Tools 

I use for my business. I track the following critical metrics: PPC and DR. PPC on is a metric that tells you how your website is performing if it were spending actual money on (Pay per Click) traffic and is a great measuring stick to see how much free quality organic your website is getting.  DR on is simply known as Domain Rating. I am always checking my DR stats to see if I went up or down in ranking because it's a great tool to gauge Google placement rankings. If your DR goes up, odds are your placement in Google searches also is higher.
- Ryan David, We Buy Houses in Pennsylvania

About the author
Brett Farmiloe
Brett Farmiloe is the Founder & CEO of Terkel, a Q&A site that converts insights from small business owners into high-quality articles for brands. Brett Farmiloe Founder & CEO,
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