What Metrics Should You Be Tracking
Metrics, KPIs, and benchmarks are all vital to the success of an organization. Not only do they show you what’s working, but they also highlight areas that need immediate improvement.
However, with so many metrics out there, it can be difficult to know which are the most important to your business success. So, to help you narrow down your options, here are the top 5 metrics we believe you should prioritize tracking in 2021.
Customer Satisfaction Rate
While your customer retention rate can tell you a lot about the success of each team and department in your organization, it isn’t necessarily the most comprehensive. You might have a relatively high retention rate right now, but if your customers are frustrated with a certain aspect of your business operations, they might churn over the next few weeks or months. And once they’re gone, they’re gone.
On the other hand, measuring your customer satisfaction levels – or the overall level of happiness your shoppers feel when they come into contact with your products and customer service team – enables you to see both the past and present, and make predictions about the future.
If customer satisfaction levels are low, you can reasonably assume that many of your customers will leave for a competitor soon (driving your retention rate down). But since it is a predictive metric, it also gives you time to make changes that will bring their happiness level back up and keep their business.
Order Cycle Time
No matter what fulfillment option your customers prefer – be it curbside pickup or delivery – they want their order to arrive quickly. But when you’re dealing with thousands of orders a day from different cities and with different fulfillment preferences, getting everything where it needs to be, on time, requires finesse.
Tracking your order cycle time holistically and segmenting it by the time spent at each stage of the fulfillment process can help you refine your operations and boost customer satisfaction levels, as it highlights bottlenecks and underscores important areas of improvement.
Unfortunately, even in 2021, we still deal with theft and fraud. In fact, according to the NRF, nearly 2 out of 3 retailers have actually seen an increase in organized crime over the past year.
Stopping these business losses can be challenging, though. Especially since there are so many different ways that fraudulent activity takes place. But it is important for retail and eCommerce businesses to know just how extensively they’re being impacted by this uptick in criminal activity. And one of the easiest ways to do that is by tracking shrinkage.
Since shrinkage accounts for all inventory losses – including damage, employee theft, carrier theft, vendor fraud, shoplifting, and other fraudulent activity – measuring it can give teams across your organization the information they need to keep your inventory from being lost or stolen.
Online vs. Brick-and-Mortar Sales
When you operate online and in physical stores, meeting customer needs is much more difficult. Add in a variety of fulfillment options like Ship from Store (SFS), BOPIS, BOPAC, and standard delivery, and managing orders and inventory can get messy.
Measuring your online sales and comparing them against your foot traffic sales allows you to effectively spread your inventory across your distribution centers and stores strategically to meet product demand. At the same time, it shows you where you should invest your time and money to get the best ROI.
If your customers prefer to shop online – whether on your website or social media channels – spending money on digital marketing, top carriers, and fulfillment center processes is your best bet. But, if your shoppers want to browse shelves or pick up their orders from the curb, you will need to invest in your frontline employees, store aesthetics, and curbside service as well.
One of the biggest issues businesses have is stocking the right amount of inventory. If you have too much, you wind up with losses. But if you have too little, you can end up dealing with “out of stock” scenarios and customer churn.
Your backorder rate helps you see where your inventory levels are in each location, so you can stock the right amount of inventory in your distribution centers and storefronts to meet customer demand. It also allows you to better plan future inventory, as repetitive backorders in a given location can indicate a need for more products nearby and creative “restocking” strategies.
There are dozens of metrics you can track to measure the overall health of your organization. However, by reviewing your customer satisfaction rate, order cycle time, shrinkage, omnichannel sales, and backorder rate, you can get a clearer picture of where you are and where you’re headed.