Now that your jewellery business is up and running, you must take the time to analyze business growth. One way to indicate the progress of a business toward its goals is using key performance indicators, also known as KPIs. Using them will allow you to understand the health of your company. When it comes to creating them, they must be specific, attainable, measurable and reflect your business rather than industry.
Here are some KPIs you should look for in your jewellery business.
- Customer retention
- Community building
- Work-Life balance for the founder
If it isn’t already obvious, revenue is one of the most important indicators of your company’s success. Businesses exist to earn a profit so looking at the financial side will let you know if you are heading down the path toward success. Tracking sales growth and how your company earns this revenue will determine how much you can spend to gain more customers.
Here are key indicators when analyzing the sales growth for your company.
- Is there a positive or negative sales growth percentage over the time period?
- What is your monthly recurring revenue?
- What is your gross profit margin?
- What is your net profit margin?
- What is the average revenue per unit?
When learning more about where your revenue is coming from, look into who is buying your products and their online behavior. Do they tend to purchase one item or multiple? What is the average ticket cost? What is the average sales cycle length? You will want a quicker conversion time for the sales funnel.
It is essential to also understand profit margins when determining financial health. Profit margins measures profitability and is the difference between the cost for products and the selling revenue. It will tell you how much money your business is making. Ultimately, you will want a higher number, as it means you are more profitable. Cost of goods sold, which is included when calculating profit margins, is the cost of producing the products a company sold, including the labour, materials, and overhead.
The more revenue you bring in, the more you are capable of spending for marketing and obtaining buyers. Customer acquisition cost tells the cost associated with acquiring a customer. Evaluating this and the customer lifetime value will determine how important a customer is to a company. You will want a lower cost, as it will mean you do not have to spend as much to obtain shoppers. As for net customer worth, this will tell you the amount of revenue earned form each customer.
Looking into all these aspects will help to maximize profitability and drive revenue. You must constantly analyze the financial health of your company so there will be long term success.
2. Customer Retention
Getting new customers is great indicator that you are doing something right and means you are getting more sales. However, keeping a customer is always more cost-effective and faster than obtaining a new one. It is less challenging to sell to an existing customer than converting someone that has never bought from you before. In addition, existing customers are more likely to spend more and do so more often. With this being the case, you should look at your customer retention compared to customer acquisition.
Here are some questions to ask yourself about customer retention.
- How many new customers have you gained?
- How many existing customers have purchased and what was the time between purchases?
- Do you ask questions during purchase and interact post-purchase?
- How many existing customers have stopped buying?
- What is the product return rate?
A lower customer retention rate will mean more customers are not returning to buy or canceling any subscriptions they have with your company. Why did they decide to end this relationship? Send out an email or survey to gather information. Listen to feedback and any complaints so you can focus on building your customer satisfaction. If you are not listening to customer requests, that is likely the cause of them going to your competition.
Customer referrals are one of the most powerful sources for acquiring customers. They are extremely valuable and do not cost much to obtain. Of course, you are not directly in charge of this but delivering high-quality experiences will leave a satisfied customer writing positive reviews and talking to others about your business.
If a majority of your sales aren’t from loyal buyers, here are some things to look into to keep your customers in the loop and leave them coming back for more. Implementing these will make customers want to do business with you.
- Treat customers with rewards. Loyalty programs truly have an impact on customer buying behaviors. The primary reason behind these programs is to reward customers for returning to shop. If customers know they will be rewarded for repeat buying, they will be more likely to do so.
- Focus on customer service. Deliver more than you promise and resolve any issues quickly. Your customers will appreciate these gestures and will turn into returners.
- Build relationships. Communicating with customers and relating to them on a personal level will make them feel appreciated. Tell your customers how much you respect their business and thank them for being loyal. It is one of the best things you can do.
Keeping these customers will cause an increase in return on investment. Focusing on customer retention will put your business in a good position because you will not be constantly trying to win customers and investing money. High customer retention will lead to business growth.
3. Community Building
Building a community allows customers to talk about ideas and products and give feedback. It provides them with a sense of belonging and will allow them to be heard by your company. Some platforms to build a community around your brand include YouTube, Slack, LinkedIn, and social media platforms like Facebook, Instagram, and Twitter. Getting people talking will bring potential customers, later turning them into loyal customers.
When measuring the effectiveness of your community, look into the number of community members, engagement, and traffic you receive.
- Analyze how many total community members you have.
- How many have you gained recently?
- Engagement will tell you how many people are interested in your company.
- How many users are active and inactive?
- Your audience may be quiet at first but will start to open up over time.
- Having a community should lead your audience to check out your website and increase demand for your products.
- How many page visitors do you receive?
- How many are new compared to recurring?
If your performance with community building is not as great as you would like it to be, here are some tips to boost it.
- Make it easy to participate. Creating an account in order to be a part of the discussion should not be a difficult process if it is necessary. A majority of customers use their phones so a mobile-friendly platform will be helpful. Adding notifications will allow customers to easily respond to news and discussions. Creating an easily accessible community forum is essential for conversations to take place.
- Interact with the community. Respond to people and do not ignore them. When customers receive responses, they feel like someone is listening to them. Another responsibility is monitoring customer posts. If there are any negative contributions, delete them so they do not discourage discussion and disrupt the community culture. When new members enter, make them feel welcomed by reaching out.
- Offer engaging content. Create a blog to answer any frequently asked questions that come up in the discussions. Share user-generated content so your customers are seen as valued.
- Embrace a social cause. Customers are attracted to businesses that contribute to a great cause. Brands with strong social impacts can build larger communities by getting customers involved. Philanthropy, environmental conservation, and volunteerism can all lead to positive brand recognition and increased customer loyalty.
Public relations gives companies a positive reputation through unpaid media, in-person engagements, and other opportunities. Company values will guide public relations strategies and will come into play when choosing how to be socially responsible. When deciding where to give back, companies often struggle. Although your company may not have an image that naturally lines itself up with a particular issue, giving back can still be an option.
As the business grows, you can see customer needs within the community. Buyers will speak up about what they are looking to purchase, and it can expand your product lines. Having a community will allow for feedback on new products. Potential customers can give their honest opinions before you invest in production. Another industry that follows this similar routine is the fashion industry. Fashion shows showcase products and allow feedback from attendees before production begins. Buyers research more about products before purchasing, and an online community can provide valuable product-related information.
4. Work-Life balance for the founder
There are so many amazing things about being an entrepreneur. Being one sure is tough. You may feel overwhelmed trying to keep up with growth and all the tasks accompanied with running a business. When taking on this journey, it is common for the entrepreneur to work long hours at odd times of the day to keep up with the business. Working more does not necessarily lead to better work. Entrepreneurs must not get too caught up in their work because it can lead to burnout. Assuming your company KPIs are met or soon to be met, you must give yourself a break. Being able to have a healthy life-work balance is extremely important so you do not exhaust yourself.
Successful work-life balance can be a struggle. Here are some tips to find the perfect work-life balance.
- Designate times to work. Schedule work hours and set daily goals to accomplish. Some people are early birds that tend to work better in the morning. If this is the case, work earlier and take off later in the day. Proper time management during these hours is key. Eliminate time wasting activities like noisy people, a cluttered workplace, and multitasking so you are more productive.
- Prioritize your health. Failing to manage your work and personal life separately will take a toll on your health. Make sleep, exercise, and healthy eating a priority. When you implement this into your routine, stress will start to decrease, and your mind will start to calm. Pulling all-nighters will not make you more productive when you are struggling to stay awake. If needed, set alarms to unplug from work to give yourself leisure time and go rest.
- Take time to yourself. Making time for yourself does not mean neglecting your business. Partaking in activities you enjoy will allow you to relax and regain your sense of self. If you have a hobby, explore that in your free time so you can relight your creativity. Whether you enjoy reading or watching TV, take time to partake in these activities too. Giving yourself more down time will allow you to return to work more motivated.
- Spend time with others. Make it a habit to schedule recurring activities with friends and family. Social interaction will make you feel happier and have a more positive outlook on life. Consider eating lunch them to break up the workday.
- Unplug your phone. When working, your phone can serve as a distraction. Spending a couple minutes checking social media and other notifications may seem to cause no harm but doing that several times a day will waste valuable work time. The same goes for your personal time. Avoid checking work emails when spending time away from the office. Make sure to keep your work and personal life separate.
- Take a vacation. Sometimes there is a much-needed break to escape from heavy workloads for a couple days. It does not matter if you are simply taking three days off or a couple weeks. Getting away will allow you to reenergize.
Plan your work schedule around your personal schedule so work does not take top priority in your life. Taking all of these things into account and strategizing everything will reduce stress levels, lower the risk of burning out, and help maintain a strong sense of well-being.
There are so many things that will determine the position your company is in. Setting clearly defined KPIs will track progress toward a company or department objective.
Here are some things to consider
- Revenue is one of the most important indicators of business progress, so it is essential to monitor these numbers.
- Customer retention is a great indicator of how successful you are at your efforts to satisfy existing customers.
- Building a community gives your buyers a strong connection to your brand.
- Although as a founder you have that drive to always get work done, it is essential to take time to yourself for your own health.
We hope this article helped you make some decisions and best of luck to your future entrepreneurial endeavours.