KPIs & Analytics You Should Be Tracking for Improved ROI
Improving return on investment (ROI) is always a primary focus for all companies. Currently customer experience/user experience is a top area that should be focused on. Happy customers are retained customers, those same customers are more likely to recommend a service or company to others or share on social media.
It comes down to a few key performance indicators (KPI) that repeatedly work off each other that you should be tracking for improved ROI.
Customer Acquisition Cost (CAC)
This is how much money has been spent for a new customer to be acquired, sales expenses + marketing expenses/number of new customers.
This should be tracked as accurately as possible, overspending here could make no difference. Testing different ad copy to update your brands image with modern terminology and creative elements will be more beneficial than upping budget on current campaigns.
Customer Lifetime Value
Recommendations are the most inexpensive way to get new customers. This equally affects CAC, satisfied customers can equate to multiple referrals. If your CAC spending is a lot higher than the customer lifetime value (CLV), think about how to increase the customer’s experience when interacting with your service. For software interface based companies, the customer experience can be improved by slight alterations to the UI and UX aspects. CAC and CLV KPIs are becoming more important to assess together as the comparison in value demonstrates a direct correlation to the other in most cases.
Cross-Sell and Up-Sell
This KPI is important if the service you provide is software, it is likely there is a subscription involved. The up-sell here is to entice customers to a higher tier, so track what features customers are using. Improving these most used features like offering more at higher tiers will entice new customers and current customers to upgrade their package.
If there is no subscription you can still capitalise by offering add-ons and extra features that compliment the original package.
Net Emotional Value (NEV)
Calculated by taking the average of positive emotions – the average of negative emotions. This can be problematic to track, take feedback in an easy way like a single click 1-10 or smiley face of user satisfaction. This can net you a large data pool to make decisions on what needs to be improved or if customer satisfaction is high.
Problem Resolution Time (PRT)
For a software as a service (SaaS) company, this can be a crucial KPI aspect. The time it takes to resolve an issue for a customer can directly affect ROI. If customer issues are not resolved in a timely manner or first contact is slow even, this can have a cascading effect on the other points touched on.
Any negative interaction from a user can outweigh multiple good ones, simply because customers expect things to be a certain way. Focusing on PRT can influence a user greatly to recommend a service to others. Timely resolutions can result in a boost to your customer NEV, directly impacting your customer churn rate and retention rate.
Collecting analytics on any of these KPIs will greatly improve your ROI in the long run. If the service you provide requires software you need a team seasoned in all these and up to date on modern implementations to improve your ROI.
At Axis Software Dynamics we can help you improve on any of these, we put our customers and their customers first to provide services that customers will recommend.