Measuring the metrics of your cosmetic company offers a detailed look at the performance of key areas of your business, including marketing strategies, customer service, and profit margins. When one examines the sales, profit, website traffic and other patterns of business, a quantifiable result can be identified and improvements put into place. When examining how to start a makeup business, metrics should always be included to maintain a secure knowledge of the performance of your cosmetic company.
1. Measure the Sales Revenue
One of the most important metrics to measure, identifying the sales revenue for your cosmetic company, can result in important improvements to your company. To measure, subtract any returned or defective products from your total sales income. This is the sales revenue amount.
2. Net Profit Margin
While it is important to know the sales revenue of your company; it is critical to know the net profit margin acquired with every sale. This is the actual earnings after overhead, marketing, and all overhead expenses. To find this margin, subtract the sales expenses from the monthly revenue. The result is the net profit margin. If it is low, you’ll want to consider lowering costs or increasing the price of your offers.
3. Retention Rate
Are your customers loyal to your brand? The way to measure their interest is to calculate it via a metric equation. Using a specific timeframe, total the number of all customers. Total the number of new customers within that same timeframe. Subtract the new customers from the total number of all new customers. The final number will be those who have been retained.
4. Lead Response
If you have sales reps, use this metric to measure how it takes them to contact a new lead. Measure this by adding the time between lead contact to the sales rep for all contacts, divided by the total number of leads. The faster an inquiry is answered, the sooner a customer can respond; this metric will indicate that lead response.
5. Churn Rate
Measure the number of customers lost during a period; divide the total by the starting number of customers at the beginning of the period. This metric indicates how many customers may cancel an order. It may indicate a need for further sales training.
Metrics count significantly in the measurement of your cosmetic company’s performance. Check regularly to determine if improvements are needed or congratulations are in order.