How to effectively track business metrics

Do your numbers do anything for you? Every business has a numbers guy or team; after all, we all need to track our costs, expenses and profits. But if your books don't tell you more than revenues and costs, what are they good for? Jeff Haden, in a blog post on Inc.com, writes that owners need to look beyond the basics of bookkeeping to find the data that truly measure the health of their businesses. A business's churn rate, for example, measures the rate that a business loses customers. Combined with other helpful metrics--such as cost to acquire customers (CAC) and lifetime value of a customer (LTV), the churn rate can help you identify how loyal your customers are and effectively implement retention strategies. "A rising churn rate could be caused by a number of factors," Haden writes. "Dissatisfaction with your products and services, new competition in your market, or even the coming end of a product or service cycle." For information on metrics, check out Adam Slack's helpful post on the Two Roads blog.