How to Reach Your Revenue Goals
Almost every business sets revenue goals for the year. Most will check their progress towards those goals by looking at how much revenue they’ve brought in to date and then comparing to previous years. But what a lot of businesses don’t do or don’t know how to do is look at why their revenue is trending up or down. That’s a problem because, unless you understand the “why”, you won’t know what to do to improve it.
Which business metrics matter
In order to understand your progress toward revenue goals, two of the most important business metrics or analytics to look at are customer retention and purchase frequency. Customer retention measures the percentage of customers that purchased within the last 12 months that also purchased within the prior 12 months. Purchase frequency tracks the number of times a customer buys products or services from a company within a given period.
Customer retention
Customer retention is key to reaching your revenue goals, because your customers spend more every year that they do business with you: 30% more in year two and another 50% more in year three. The longer you retain your customers, the greater their spend will be and the higher your revenue will be. In fact, increasing customer retention by just 5% can boost profits by 25% to 95%.
Purchase frequency
Purchase frequency is just as important as customer retention. If a customer’s purchase frequency is decreasing, then you are at risk of losing them. If their purchase frequency is remaining steady or increasing, then you have a better chance of retaining them over the long term. A higher purchase frequency can also mean a higher customer spend, moving you closer towards your revenue goals.
Improve customer retention and purchase frequency to reach your revenue goals
Increasing retention and purchase frequency is crucial for boosting the amount of money you bring in. Winsby has tried and proven methods for expanding both.
Customer retention
The simplest method for improving retention is to find out why customers are leaving. The best way to do that is through customer satisfaction surveys conducted by an outside third party like Winsby. Using a third party will elicit candid comments that customers may not want to share with an employee of your company, and the surveys will provide specific feedback, so you can solve any issues quickly.
We see an increase in retention rates of 20% or more when customers are routinely surveyed about their experience with a company in Winsby’s customer satisfaction surveys.
Purchase frequency
Distributing emails to customers and prospects increases how often customers purchase from you and remind customers of everything you offer. In fact, with Winsby’s emails, customers on your distribution list will generally purchase two to three times more often than customers who are not receiving the emails.
Understanding your business metrics
Before you can improve key business metrics like retention, purchase frequency, and others, you have to start measuring analytics, know how they trend, and understand what those trends mean for your company. When you work with Zintoro and Winsby, you have a portal where you can view all the most important business metrics. Our financial experts will walk you through them, provide insights on trends, and help you make better decisions for your company.
Business metrics available through your portal:
- Historical customer retention rate
- Net growth rate for number of accounts
- The number of active accounts
- How often customers purchase
- Top customers
- When customers purchased last & who hasn’t purchased recently
- New customers
- Lost customers
- Historical revenue
- Growth in the number of invoices
If you want to start measuring analytics, stay on track for your 2023 revenue goals, and set achievable revenue goals for 2024, reach out to our team today!