The top metrics every business should track in 2024

In this guide, we outline the key metrics UK businesses should track in 2024, along with insights and actionable tips. 

Top business metrics to track 

Customer acquisition cost (CAC) 

Customer acquisition cost is a measurement of how much you need to spend to attract a new customer. Acquisition expenses to consider include marketing, sales, employees, and advertising.  

To work out your CAC over a specific time such as a quarter or year, divide the total acquisition costs by the number of customers acquired.  

Ways to lower your CAC include: 

• Analyse how users are engaging with your website. If lots are abandoning their shopping basket before making a purchase or leaving your website quickly after visiting, make improvements such as enhancing the shopper journey or making pages load faster.   
• Improve organic social media engagement to reduce paid marketing costs. Organic social media means non-paid for activity, which grows through word of mouth, or followers, as opposed to paid-for which grows at a much quicker pace. Build a community around your business by asking questions, providing useful content and sharing followers’ content. Connect with trusted online influencers who are relevant to your brand and collaborate with them on sharing content. However, many influencers will expect to be paid for or recompensed with your products or services.
• It can cost five times more to acquire a new customer than it does to retain an existing one. Focus on providing an excellent customer experience for your existing customers so they make repeat purchases and help to bring down your acquisition costs.  

Customer lifetime value (CLV) 

Customer lifetime value (CLV) is the total profit you can expect a customer to generate throughout their relationship with your business.  

Understanding CLV helps you predict future revenue, work out how much you need to spend on acquiring customers, understand which products or services are the most profitable and know which customers are driving the majority of your revenue.  

• Ways to increase customer lifetime value include: 
• Run a loyalty scheme to encourage repeat purchases. 
• Upsell and cross sell complementary products or services. 
• Provide consistently excellent customer service and a memorable customer experience.  
• If you run a subscription service, provide a discount to encourage renewals.  
• Speak to your most loyal customers and ask why they love your business.  

Website traffic and engagement 

Tracking metrics on your website will help you to monitor how it is performing, understand who is visiting the site, and ensure that it is delivering the results you want it to.  

Key website metrics to measure include: 

• Page views: Number of times a website page is visited by a user. 
• Average time on page: Average time visitors spend on a website page. 
• Average session duration: Average time visitors spend navigating around a website.  
• Bounce rate: Percentage of visitors who leave a website after viewing only one page.  
• Traffic sources: Where visitors to a website come from such as organic search, paid search, emails, social media and links on other websites.  

Read more website metrics here. 

A key tool for measuring website traffic metrics is Google Analytics. To use this free service, you need to add tracking code to your website. Find advice on using Google Analytics here. 

You can use the metrics to understand which website pages are performing well and which aren’t so that you can make necessary adjustments. For example, if people are bouncing/leaving quickly from a particular page, investigate why and add content or features that encourage them to explore your site.  

Monitoring traffic sources is important because it will identify how customers are finding your website and help you to understand where to focus your efforts for generating more referrals or improving referrals from relevant sources that aren’t performing well enough.  

Social media performance  

Some level of social media engagement is essential for all businesses. It’s a crucial part of the modern customer journey and allows businesses to connect to potential purchasers of their products or services.  

Social media metrics to measure include: 

Reach: The number of people who see your content.

• Impressions: The number of times people see your content. 
• Engagement rate: Engagement is reactions to your content such as likes, shares and comments. Your engagement rate is calculated as the total number of interactions your content receives divided by your total number of followers, multiplied by 100%. 
• Video views: The definition of a view varies depending on the video platform, but it can be as little as one second watched by a user.  

See more social media metrics here.  

You can measure engagement by checking the analytics provided by social media platforms or with tools such as Hootsuite, Sprout Social and Social Pilot.  

Tips for improving social media engagement include:  

• Experiment with different content types, such as video, audio and images, to work out which best resonates with your target audience. 
• Don’t make all your social media content about selling your products or services. Build an engaged community around your business. Ask questions, share followers’ posts and provide useful, humorous and entertaining content.   
• Use social media monitoring tools to track mentions of your brand or topics and phrases related to your products or services. Where appropriate, get involved in the conversation to encourage users to engage with your business.  
• Use social media management tools to schedule content to help you stay consistent. Don’t rely completely on scheduling though. It’s important that you engage with relevant social media users in real time.  
• Run targeted social media advertising to reach target customers based on demographics and interests.  

Return on investment (ROI) 

Return on investment (ROI) is the metric that allows you to understand whether an activity you spend money on for your business generates a profit and if so, how much profit it generates. 

The formula for calculating ROI is: 

ROI = (net profit from the investment / cost of the Investment) x 100  

Ideally, every pound you spend for your business should bring a return, so you want to make investments wisely.  

Key factors to bear in mind for calculating ROI are: 

You can measure ROI for a wide variety of business activities including marketing campaigns, launching new products, employee training and buying new equipment.

Factor in long-term benefits when calculating ROI. Not all ROI is immediate so consider benefits such as brand awareness and improvements in customer loyalty.  

Align ROI calculations with your business goals and key performance indicators (KPIs) by tracking metrics directly related to what you want to achieve. For example, the number of sales generated or number of customer leads acquired.  

Employee engagement and productivity 

Employee engagement is directly linked to business success. This is because a happy and engaged workforce means greater productivity and efficiencies leading to more sales and increased profitability.  

Employee engagement metrics to measure include: 

• Satisfaction rate: A measure for how happy an employee is with their job and the environment in which they work.  
• Retention rate: The percentage of employees who stay working for a company during a given period. 
• Absentee rate: The percentage of employees who are often absent from work for unauthorised reasons.  

Methods for monitoring employee satisfaction and engagement include sending out anonymous surveys, having one-on-one conversations and conducting exit interviews with departing employees. You should carefully analyse the results, as well as tracking retention and absentee rates to understand why people are resigning or not coming to work.  

Ways to create a positive work environment include providing employees with training, discounts on leisure activities, access to health advice, wellness activities like yoga and connections to mental health first aiders.   

Read more advice on recruiting and retaining staff here. 

Inventory management and turnover 

Inventory management is defined as “the process of ordering, storing, using, and selling a company's inventory” which “includes the management of raw materials, components, and finished products, as well as warehousing and processing of such items”.  

Effectively managing your inventory is important for business profitability. A shortage of inventory or very high inventory costs can be damaging.  

Inventory management metrics to measures include:  

• Stock level: The amount of stock you have available for a particular product. It is important that you have enough stock to cover customer demand or you could lose out to competitors.  
• Carrying cost: The expenses involved in stocking and holding inventory during a period of time. It is recommended that these costs should be 15% to 30% of your business’ total inventory value.
• Inventory turnover rate: How fast you sell your inventory over a given period. Inventory turnover rate is calculated by multiplying cost of goods sold (COGS) by the average value of inventory. Between five and 10 is an ideal rate. This means a business sells and restocks inventory approximately every one to two months.  

Ways to improve inventory management include: 

• Using inventory management software helps you to effectively track stock levels and avoid human error. Xero is among the software companies that offer an inventory control system.   
• Suppliers regularly being late with deliveries or not supplying materials at all can be damaging to your business. Regularly monitor supplier performance and switch to a different supplier if necessary.  

Sustainability and environmental impact 

A growing number of consumers base purchasing decisions on the environmental and social impact of a business. Government targets to reach net zero carbon emissions also mean that businesses face increasing regulatory pressure to make their practices more sustainable.  

Environmental impact metrics to track include: 

• Monitor your business’ energy consumption, waste generation and carbon footprint. 
• Set measurable targets to improve your ecological footprint such as cutting back on single-use plastic and switching to renewable energy. 
• Invest in green technologies and equipment such as energy efficient appliances and electric vehicles. 
• Monitor the sustainability practices of your supply chain and make changes if necessary.  

To build trust in your brand and attract new customers, you can include your business’ sustainability efforts in your marketing and other communications. 

Read more tips on increasing the sustainability of your business here. 

Brand awareness and reputation 

Monitoring and improving brand awareness and reputation is an important factor in business growth.  

Brand reputation metrics to track include: 

• Monitor reviews of your business on platforms such as Tripadvisor, Google Reviews and Trustpilot.  
• Calculate your net promoter score (NPS), a measure of customer loyalty and satisfaction by asking them how likely they are to recommend a product or service to others on a scale of 0-10. Respondents are classified as detractors if they score 0-6, passives for 7-8 and promoters for 9-10.  
  To work out your NPS, use this calculation: the number of promoters minus the number of detractors divided by the number of respondents multiplied by 100. Carrying this out regularly allows you to monitor customer satisfaction and take steps to improve. 
• Monitor what people are saying online about your products or services. A free tool to use is Google Alerts which will send you an email notification when it finds results for keywords or phrases you want to track. Paid for tools with more features include Brand24, Brandwatch and Sprout Social. 
  
  Many tools also provide sentiment analysis which allows you to measure how positive or negative online conversations about your brand are.  

Actions to take that can improve your brand reputation include: 

• Responding to reviews will show that your business cares about its customers and reputation, particularly if the reviews are negative. Research shows that 90% of UK consumers check reviews before making a purchase. 
• Encourage positive reviews by implementing strategies to incentivise happy customers to leave reviews. 
• Proactively respond to negative feedback and solve any issues as quickly as possible.  
• Develop a public relations strategy for getting your business featured in the press. Getting coverage in publications and broadcast media which your target audience consumes helps to build trust around your brand amongst potential customers. 

Conclusion  

A detailed focus on the key metrics outlined in the guide will help your business achieve success in 2024.  

It’s important to remain flexible and adapt your strategy to changing customer demands, the economic climate and other circumstances that require your business to focus on refined or new metrics.  

Get help with your business growth 

TaxAssist Accountants can help you with the right advice to support your business.  

We can assist with taxes, accounting, bookkeeping and payroll, as well as connecting you with other providers we work with.  

Contact us to learn more about our services and to book a free initial meeting. 

Date published 7 Mar 2024 | Last updated 7 Mar 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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