Final answer:
To help a company increase sales, recommend tracking a portfolio of metrics including Conversion Rate, Customer Acquisition Cost, Average Order Value, Lifetime Value of a Customer, and Sales Growth. These metrics offer insights into the sales funnel and business health, facilitating strategic decision-making.
Step-by-step explanation:
In recommending a portfolio of metrics to track a company's ability to increase sales, I would suggest including several key performance indicators that provide a comprehensive view of the sales funnel and overall business health.
- Conversion Rate: As previously discussed, this measures the percentage of prospects who take a desired action, turning them into customers.
- Customer Acquisition Cost (CAC): This metric calculates the total cost associated with acquiring a new customer, including marketing and sales expenses.
- Average Order Value (AOV): Tracking the average dollar amount spent each time a customer places an order can help in strategizing upselling and cross-selling opportunities.
- Lifetime Value of a Customer (LTV): This projects the total revenue a business can reasonably expect from a single customer throughout their relationship with the company.
- Sales Growth: Measures the ability to increase revenue over a set period. Tracking month-over-month, quarter-over-quarter, or year-over-year sales growth can highlight trends and inform future sales strategies.
Monitoring these metrics can help identify strengths and weaknesses in the sales process and inform strategic decisions. Additionally, aligning these metrics with performance evaluation goals can ensure that sales efforts are contributing effectively towards the company's broader objectives.