Free RFM Analysis and Customer Segmentation for Direct Marketing Companies

KEY PERFORMANCE INDICATORS Key Performance Indicators Key Performance Indicators (KPIs) are quantifiable measurements that reflect the critical Growth factors of your business. It is important to not only measure the Growth from year-to-year, but to also track what made your business grow, namely the Growth of Customers, Orders, Gross Sales, Average Customer Value (ACV), and Average Order Value (AOV), as well as the dynamic relationship between Retention, Acquisition, and Attrition. The KPIs for Growth are revealed in a series of formulas answering three key questions. "Did this year's customers produce more value than last year's?" "How do this year's KPIs compare to last year's?" "Did repeat customers produce more value this year than they did last year, and did new customers produce more value than the lost customers they replaced?" It is important to keep everyone in your company focused on achieving these KPIs. Whenever possible, use them to manage and reward performance. Post them in the lunch room, on the walls of every conference room, and on the company intranet. Show what the target for each KPI is, and monitor the progress toward it. When people are motivated to reach them, they tend to happen.
Growth = Current Year's Business - Previous Year's Business (DEMO)
		Customers		Orders		Gross Sales		ACV	AOV
	Current Year's Business	12,407	135.1%	27,230	142.8%	$12,288,835	133.2%	$990.48	$451.30
-	Previous Year's Business	- 9,185	- 100.0%	- 19,071	- 100.0%	- $9,223,491	- 100.0%	- $1,004.19	- $483.64
=	Growth	3,222	35.1%	8,159	42.8%	$3,065,343	33.2%	($13.71)	($32.34)
This formula reveals the KPI for Growth, and answers the fundamental question, "Did this year's customers produce more value than last year's?"
Growth = (Retention CY + Acquisition) - (Retention PY + Attrition)
		Customers		Orders		Gross Sales		ACV	AOV
	Retention CY	4,427	48.2%	13,497	70.8%	$6,561,657	71.1%	$1,482.19	$486.16
+	Acquisition	7,980	86.9%	13,733	72.0%	$5,727,178	62.1%	$717.69	$417.04
-	Retention PY	- 4,427	- 48.2%	- 12,238	- 64.2%	- $6,369,426	- 69.1%	$1,438.77	$520.46
-	Attrition	- 4,758	- 51.8%	- 6,833	- 35.8%	- $2,854,065	- 30.9%	$599.85	$417.69
=	Growth	3,222	35.1%	8,159	42.8%	$3,065,343	33.2%	n/a	n/a
This formula expands the first formula to reveal the KPIs of the Current Year (Retention CY and Acquisition) and the KPIs of the Previous Year (Retention PY and Attrition), and answers a more complex question, "How do this year's KPIs compare to last year's?"
Growth = (Retention CY - Retention PY) + (Acquisition - Attrition)
		Customers		Orders		Gross Sales		ACV	AOV
	Net Retained Value	0	0.0%	1,259	6.6%	$192,231	2.1%	$43.42	($34.31)
+	Net Acquired Value	+ 3,222	+ 35.1%	+ 6,900	+ 36.2%	+ $2,873,112	+ 31.1%	$117.85	($0.65)
=	Growth	3,222	35.1%	8,159	42.8%	$3,065,343	33.2%	n/a	n/a
This formula reorders and condenses the second formula to reveal the Net Retained Value (Retention CY - Retention PY) and the Net Acquired Value (Acquisition - Attrition), and answers the most challenging question, "Did repeat customers produce more value this year than they did last year, and did new customers produce more value than the lost customers they replaced?"

Sales • Privacy Policy • Links

KEY PERFORMANCE INDICATORS

Growth = Current Year's Business - Previous Year's Business (DEMO)

Growth = (Retention CY + Acquisition) - (Retention PY + Attrition)

Growth = (Retention CY - Retention PY) + (Acquisition - Attrition)

Growth = Current Year's Business - Previous Year's Business
(DEMO)