The summary.
THE TEST FOR ANY METRIC
Would you act differently if it changed? If not, do not track it.
Five to eight figures, reviewed monthly, beats a long list reviewed and forgotten.
TRACK LEADING INDICATORS, NOT ONLY RESULTS
Enquiries, quotes outstanding, bookings ahead, customers gone quiet.
By the time revenue falls, the cause is months old.
REVENUE IS THE LEAST USEFUL FIGURE ALONE
It can grow while profit falls, and that is noticed late.
Track gross margin by product or service. A falling margin is the earliest warning of a pricing problem.
Markup and margin are different — fifty percent markup is thirty-three percent margin.
THE TWO FIGURES THAT DECIDE GROWTH
What a customer is worth over the relationship, and what one costs to acquire.
Include your own time in the acquisition cost. It is usually the largest component and usually omitted.
THE RETENTION QUESTION WORTH ASKING
Of customers who bought last year, how many bought this year?
Churn is invisible — customers who leave do not complain.
ALWAYS PAIR TARGETS
Revenue with margin, speed with accuracy. A revenue target alone produces discounting.
