This document discusses key business performance indicators that small and growing businesses should measure. It outlines several sales performance metrics to track, including sales revenues, customer acquisition cost, building a typical customer profile, and size of gross margin. It also discusses measuring the sales funnel. For service performance, the document recommends measuring speed of service, cost to serve, customer loyalty and retention rates, and implementing a consistent customer service measurement. The overall goal is for small businesses to focus on the most important metrics that will help them navigate growth and scale their business successfully.

1. Growing business
performance indicators:
what to measure
By Daniel Plume for NewVoiceMedia

2. Whitepaper - The Benefits of a Dynamic IVR
As a small or growing business, you probably have a lot
on your plate. Managing a growing business is packed
with complex and difficult decisions that can then leave
many with sleepless nights. Every decision can feel like
a stab in the dark, a step into the unknown, a risk. It feels
like any mistake could be fatal to the business. It is not
an enviable position for anyone to be in, particularly if
you are a very small business or you rely heavily on just
a few key clients as you seek foothold in the market.
Every company has to go through this challenge, and
this whitepaper is designed to help you come through
it unscathed and in a position to grow faster.
We have helped many businesses through this turbulent
and hazardous period and into successful and sustained
growth. Our customers are outpacing the competition in
their respective market by as many as 8 times the average.
Focusing on the key metrics and drivers that matter most
to you and improving those steadily is the best way to
navigate this period in your organisation’s growth.
This whitepaper explores the key business performance
indicators across sales and service that you need
to pay close attention to. It maps out what you
should be measuring as you take your business
through the next stage of its development.

3. Whitepaper - The Benefits of a Dynamic IVR
Sales Performance
Indicators
New and growing businesses depend on acquiring
new customers as fast as possible and as efficiently
as possible. The sooner the dependence on a
handful of key customers is diminished, the better.
Depending on the industry and the nature of the business,
this can be harder for some, but there are certain things
to focus on that will help you reach your goals and stay
on track. The measures detailed here are broad metrics
that indicate a healthy sales and marketing environment.
Sales revenues
Simply defined as income from customer purchases
minus things like returned items. Everyone is happy when
the numbers keep going up, but the data needs to be
checked constantly for deeper meanings and trends.
Your sales data needs to be viewed alongside things like
advertising campaigns, any price changes, competitive
actions and of course other costs associated with the sale.
There are more sophisticated measures in this area which
will help you gain a better insight into your success, such
as Return on Sales (operating profit), or Return on Assets.
These can tell you where your company ranks alongside the
competition, and in the long run this is what truly matters.

4. Whitepaper - The Benefits of a Dynamic IVR
Customer acquisition cost (CAC)
This measures the total costs associated with acquiring
a new customer, including all aspects of marketing and
sales. It is calculated by dividing the total acquisition costs
by the number of new customers over a given period.
It is important with this measure to include the costs
associated with your sales teams when they close
deals as well as your advertising and marketing
budgets. This helps you understand whether your
investments are paying for themselves and gives you
a great indication of performance. Over time, this cost
should decrease as you become better established in
the market and your brand recognition increases.
A great way to monitor this is to find clever ways to measure
the ROI of marketing campaigns. This will help you focus
your spend on activities that return the rewards and will
ultimately bring down the cost to acquire new customers.

5. Whitepaper - The Benefits of a Dynamic IVR
Building your typical
customer profile
Time is precious in sales. With man power and labour
costs being some of your highest expenses, knowing
that they are going to waste is a difficult pill to swallow.
Therefore keeping your sales teams focused on your
key targets is a sure fire way to minimise waste.
Look at your successes and build a ‘typical
customer’ profile that you can then use to
prioritise key leads and sales targets.
Size of gross margin
This is the company’s total sales revenue minus its cost of
goods sold, divided by the total sales revenue. This is then
expressed as a percentage. The higher the percentage
the more your business saves on each dollar or pound
of sales to service its other costs and enjoy as profit.
It is important to track margins in a growing business since
increased volumes should improve efficiency and lower
the cost per unit. Improving productivity requires effort and
innovation, and many companies charge ahead without
realising margins are heading in the wrong direction.
The key is to drive efficiency through every aspect of
the sales cycle where you can. Technologies like click-
to-dial can help save valuable time on a daily basis that
enable sales teams to place more calls in any given day.

6. Whitepaper - The Benefits of a Dynamic IVR
Knowing your sales funnel
As a growing business, understanding the ratios and
flow of your sales funnel is critical. Winning new business
is essential but do you know how much it costs to win
each new piece of business? Do you know, for example,
how many leads it takes per meeting booked? Or how
many meetings you need to generate new pipeline?
Here are some typical sales funnel
stages to keep an eye on:
• Leads to meeting
• Meeting to pipe
• Pipe progression
• Pipe to close
Keeping a track of all this kind of information can be
difficult, you need to ensure all sales activity is logged
in your CRM against your customer and prospects’
records. Only once you have a complete view of all
sales activity can you work out, going backwards,
how many leads it takes to hit your sales targets.
This information provides a great basis to plan your
marketing activities and budgets, as well as knowing
where you need to be with your sales function to hit your
growth goals. Gradual improvements at any step along
your sales funnel can reap great rewards at the bottom.

7. Whitepaper - The Benefits of a Dynamic IVR
Building momentum
Not necessarily a directly measurable business metric, but capitalising on big wins and celebrating all new
business is a good way to make people feel included and to generate a sense of victory. Often when it
comes to a sales environment, the enemy is the feeling of flat-lining or being static, so anything you can
do to encourage people out of a slump or to stave off that feeling of inertia you should be doing.
This could involve gamification or any number of incentives schemes in order to drive not only better
performance, but to give the work environment some energy and healthy competition. Ultimately keeping
staff motivated is a great way to build that momentum and feeling of growth and moving forward.

8. Whitepaper - The Benefits of a Dynamic IVR
Service Performance
Indicators
Service is becoming the battle ground for the modern
business. The customer experience is heralded as
the key differentiator with businesses clambering
over themselves to be leading the market.
Delivering exceptional service is critical for small
and growing businesses, you want to keep your
customers happy and with you for as long as you
can. But what constitutes great service and what
should you be keeping an eye on to ensure you are
delivering great service? Outlined below are the core
things you want to be tracking and measuring.
Speed of Service
If you are a very small organisation this may not seem
like such an important metric, but as you grow your
ability to turn customers’ problems around quickly
is highly important. In competitive market places
where choice is readily available to your customers,
the service level you deliver will directly influence
the number of customers you attract and retain.
Technology plays a key role in your speed of service.
Look for systems and technologies that keep
information in one place, available simply for all staff
to view and understand. It helps build a profile of your
customers and also prevents the need to flick between
systems when talking with customers directly.

9. Whitepaper - The Benefits of a Dynamic IVR
Cost to Serve
Possibly the most important metric in your
service organisation. If your costs to serve and
costs to acquire outweigh your profits, then the
business will fail. You have to maintain both.
This is an important metric to keep on top of and to
understand where the costs are coming from. With
so many moving parts in service and so much of the
organisation usually involved with resolving customer
challenges it can be a tricky task keeping on top of it
all. All that said, you need to analyse and review on
a regular basis to ensure costs aren’t spiralling.
Look for technologies that empower your service agents
to help at first contact. Look for ways to reduce the time
it takes to resolve challenges and reduce the number of
times your customers need to call to get a resolution.
Customer loyalty and
retention / churn rate
Keeping hold of your existing customers is paramount to
success. An often quoted figure or statistic in business
is that is costs as much as 6 times more to win new
customers as it does to maintain existing ones. Having
to win all new customers drastically raises your costs to
acquire which has a significant impact on your margins.
The best way to prevent this from happening is through
great service. Take a good look at your customer churn
rates and understand what their reasons are for leaving
you. Use any methods at your disposal, whether an exit-
survey conducted by the account manager or a simple
questionnaire sent out to the leaving customer, get a
handle on what you can do better to reduce churn.

10. Whitepaper - The Benefits of a Dynamic IVR
Pick a customer service
measurement
Whether it is an overall customer satisfaction survey
or using NPS (Net Promotor Score), you should pick
a measure and use that to benchmark your own
progress in service. Make it readily available across
the business and share in your successes.
Sharing in your common goals as a business is a good
way to build a culture. Driven by your success and
knowing the numbers are improving breeds a winning
mentality across your service department and will help
champion good service from the whole of the business.
Prioritising key customers
Every business has their key customers. Whether they are
target accounts in particular industries, landmark names
to have on the books or large spending customers, they
all deserve special attention. It isn’t something that any
company will openly admit to but you can bet your bottom
dollar behind closed doors they work harder for them.
Technology can play a particularly pertinent role here in
allowing you to apply certain conditions in your service
department. For instance, linking your CRM database
with your phone system can enable priority routing.
Your customers won’t even know it is happening, but
you can start to provide personalised and fast service.

11. Whitepaper - The Benefits of a Dynamic IVR
Business Performance
Indicators
This section details metrics that examine the business
performance as a whole. These indicators will
highlight your operational efficiencies as well as give
you a good understanding of total performance.
As with any business, operating effectively and efficiently
is essential to maintain a steady growth trajectory.
Keeping a keen eye on these can be the difference
between making a good decision, and a bad one.
Operating productivity
Naturally measuring staff productivity is important. If
you don’t know how your staff are doing or how hard
they are working then you can’t truly know the inner
workings of your company. If staff morale is low it can
be really dangerous for your company, conversely
happy productive staff can be your greatest asset.
Productivity ratios can be applied to practically any
aspect of the business. Sales productivity, for example,
is simply actual revenue divided by the number of
sales people. Compare your productivity to industry
statistics or against yourself as a benchmark for
continuous improvement. This process works for
manufacturing, marketing and even support.
As mentioned previously, look for ways to incentivise
performance and keep your working environment
an exciting and enjoyable place to be.

12. Whitepaper - The Benefits of a Dynamic IVR
Monthly profit or loss
Profit is not simply the gap between the costs of your
product or service and the price being charged for it.
There are many factors and expenditures that must be
considered including fixed and variable costs of operation.
These include items like rent or mortgage payments,
utilities, insurance, taxes and your staff salaries.
Beyond reducing your cost of operation, the biggest
impacting factor on profit is the price you can
charge for your product or service. The amount
you charge above the base cost of an item is your
‘markup’ and then the difference between cost
and price is the ‘margin’. Companies with margins
below 60% are traditionally seen by investors as
companies that will have a tough time growing.
Overhead costs
Economics states overheads as fixed costs not dependent
on the level of goods or services produced by the business
– like salaries or rents being paid each month. These need
to be monitored closely as with any growing business
they can spiral and become a serious inhibitor to growth.
Tracking these costs monthly will give you a clear view on
where your spending occurs across the business. You can
then utilise this information when you update your business
plans or when looking at your yearly budgets. Overhead
costs are not influenced by how much your business earns
or grows so they must be tracked separately and carefully.
If costs seem to be spiralling, investigate the options
of moving premises or switching utility suppliers
to help keep your costs more manageable.

13. Whitepaper - The Benefits of a Dynamic IVR
Inventory size
Your inventory represents one of the most important
assets businesses possess, because the turnover
of inventory represents one of your primary
sources of generating revenue and earnings for
the company and its shareholders or owners.
For a growing business, it is an important area to
manage. No doubt you will find you either have
too much inventory, or not enough. The challenges
include forecasting your requirements, buying in cost-
effective amounts and just-in-time delivery systems.
Hours worked per process
Beyond ratios, you need to keep metrics on total
number of labour hours extended for various functions
across the business. Labour is likely to be your most
important and most expensive asset, particularly
in manufacturing and support operations.
There is one constant in small business and that’s change.
This is exactly why the excuse of, “we have always done
things this way,” should be banned from any growing
business. These days most labour-intensive operations
can be replaced with automation so it’s important as
your business grows that you recognise the point where
automation becomes justified. There comes a point where
the return on investment of technology and automated
operations is well worth the cost and time to change.
For instance, any practices and activities carried
out by staff that can be simplified to drive efficiency
should always be considered. Consider your sales
and service departments making and receiving calls
all day, if you could automatically log that activity
it would save both departments so much time.

14. Whitepaper - The Benefits of a Dynamic IVR
Review your processes
What worked yesterday may not work tomorrow. As your
company grows it is important to review your processes
regularly. The more people involved then the more
possibilities there are for things to fail or slow down.
This isn’t a slur at your workforce, it is human nature.
It is important to refresh and review your processes
and make any and all improvements. When speed is
so important for growing businesses making sure your
operations are as smooth and efficient as possible can
make all the difference when it comes to executing
for your customers and keeping them happy.

15. Whitepaper - The Benefits of a Dynamic IVR
Summary
With so much to keep your eye on as a growing
business knowing what data to analyse and what to
discard is half the battle. Hopefully this guide will help
you to zero in on key metrics that give an overall view
of the business and its performance. Every business
owner should monitor these constantly and take time
to chart, review and carefully examine them at least
once a month. If any of these key metrics start to ring
alarm bells, you can dive into the numbers that help
comprise them and get to the root of the problem.
It can be so easy to focus on new sales figures and feel
that as you keep winning customers that the business
is succeeding, but there are a lot of contributing factors
to business success. Wherever possible look to see
how technology can play a part in driving efficiency
gains and in taking out the manual costs associated
with tasks that could be automated. A great way to
keep the business on track is to firstly invest heavily in
a great CRM. Invest now and invest fast and give your
business every chance of growth. If you don’t have the
right one in place it can act against you as you look to
expand. You need to build a good understanding of your
customers and your CRM is the best tool for the job.
What you are then looking for is a communications
platform that integrates with your CRM to enhance
communications, delivering a great experience for your
customers and making every interaction context rich.
This type of integration streamlines your sales operation,
reduces costs to acquire and lowers labour costs since
the team will be more effective and efficient. It will
also help your service department provide excellent,
personalised service as standard. A winner on all fronts.

16. Whitepaper - The Benefits of a Dynamic IVR
Recommended for you…
The small business guide
to cloud communications
Managing telephony
for Salesforce as a
growing business
Service KPIs:
18 things to consider

17. Whitepaper - The Benefits of a Dynamic IVR
Daniel curates the creation and distribution of marketing
content at NewVoiceMedia. Daniel has worked in the
telecommunications and IT sector for 5 years, almost
exclusively with cloud technology. In his spare time he
is a keen sports enthusiast, playing cricket throughout the
summer, football in the winter, and can be found playing
darts mid-week.
About the Author

18. WP | EC17345 | 12/15
About NewVoiceMedia
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