One of the main benefits businesses see after integrating a sophisticated enterprise resource planning (ERP) solution like Microsoft Dynamics ERP is related to the platforms measurement of key performance indicators (KPIs). Microsoft Dynamics ERP is designed to provide an intuitive and user-friendly experience that allows companies to track different KPI measures, but which of these key performance indicators provides the best insight into business growth? Here are the top five key performance indicators every growing business should maintain on their Microsoft Dynamics ERP dashboard.
1. Revenue Growth
Businesses can’t survive without sales. In order to ensure that a business is growing, managers must keep an eye on revenue growth over time. This common KPI that shows up on almost every Microsoft Dynamics ERP users’ dashboard is calculated using sales data tracked from one period to the next. By keeping a running tally of the current period’s revenue relative to the previous period, companies will be able to know whether their financial growth is heading in a positive direction.
2. Revenue Concentration
Even if a company’s revenues are growing over time, it can be problematic if all of these sales are coming from a single source. A diversified financial portfolio reduces risk and insulates businesses from the impacts of depending on single or concentrated streams of revenue. Businesses with an eye on long term growth should be sure to include income sources and revenue concentration KPI’s in their Microsoft Dynamics ERP measures.
3. Cost of Customer Acquisition
It is impossible to know the value of a sale unless the salesperson also understands the cost of customer acquisition – that is, how much was spent to acquire new customers. The cost of customer acquisition is also reflected in another common KPI tracks using Microsoft Dynamics ERP: the customer lifetime value.
4. Customer Lifetime Value
Businesses with many repeat customers thrive over the long term. High customer lifetime value, a KPI showing how much a single customer will spend at a particular business over their entire lifetime, indicates that a particular businesses’ clients tend to return many times. Comparing the cost of customer KPI acquisition with the customer lifetime value KPI can provide an informative measure of how successful a business will be in the long run.
5. Landing Page Conversion Rates
A good landing page brings new customers to a company’s product or service. On average, around 2% of the visitors to a company’s landing page will actually convert to paying customers. Companies failing to meet average landing page conversion rates should be concerned about their future growth, as low performance on this KPI indicates that there is something about a company’s landing page that’s turning potential customers away.
Every growing business should keep an eye on these top five key performance indicators for growth, but different companies will also need to track other KPIs necessary and appropriate to reflect growth in their industry. For example, software as a service (SaaS) companies tend to focus on their number of active daily or monthly users and their churn rate.
E-commerce companies, on the other hand, might be more concerned with KPIs like shopping cart abandonment rate or the average order value to better understand their growth metrics. To ensure every business can track the KPIs that meet their needs, The Microsoft Dynamics ERP platform offers users the ability to customize KPI measures. By doing so, companies can use Microsoft Dynamics ERP to keep up to date on KPI measures that leverage data from multiple sources to develop better insights about projected growth.