7 Types of Metrics To Measure Business Success

We all know that kid from middle school, which everyone had big hopes for, but didn’t turn into an extraordinary genius, or vice versa; the lazy kid in class becoming an unexpected success…

Come to think of it; it’s not always only people that prove other people’s expectations wrong.

Thank goodness there are ways to measure Product Success in the early stages so that you don’t keep wasting your money on something useless.

Or don’t give enough attention to a side feature that actually is the key feature of your product which you didn’t realize.

A business success metric is a quantifiable measurement that business leaders track to see if their strategies are working effectively. Success metrics are also known as key performance indicators (KPIs). There is no one-size-fits-all success metric; most teams use several different metrics to determine success.

PM School – Defining Success Metrics for a product | Solving Metrics Questions in PM interviews

What are success metrics?

Heres a list of common metrics used for measuring success across a variety of business platforms:

1. Break-even point

The break-even point accounts for the amount of money a company must earn in a given period—monthly or quarterly—to cover its costs and sustain itself. Tracking whether your company is meeting, exceeding or falling short of this number is key to measuring success and creating actionable next steps. For experienced companies, the break-even point may be the minimum expectation while newer companies may aim simply to meet this goal consistently.

2. Net income ratio

The net income ratio, or profit, is the money left over when a company subtracts its expenses from its revenue. Businesses have traditionally viewed this metric for measuring value and it can be a quick indicator of whether your company is thriving.

While most companies prioritize the growth of profit, new companies may take some time to see consistent numbers in this area. You should provide context with historical data to measure growing trends in your companys success over time.

3. Monthly recurring revenue

If your business runs on a subscription-based model, you might benefit from measuring your monthly recurring revenue (MMR). This metric refers to the companys total revenue during a specific period—usually a month—distinguished by particular products or services, how many customers bought them and how many downgraded their monthly purchases. Individually, these sales indicators allow businesses to monitor specific changes in customer behavior and make adjustments accordingly. When combined, these measured indicators help businesses track overall growth in both customer numbers and individual spending over time.

4. Leads, conversion and bounce rate

If your business relies heavily on marketing and advertising to generate sales, tracking the metrics for those efforts can be crucial to ensuring their success. Follow these steps to track the data related to your marketing leads:

The inverse of your conversion rate is your bounce rate, which measures the number of visitors who navigate to your companys webpage but leave immediately without interacting. This triggers only a single request to the analytics server, resulting in a bounce. The number of bounces as a percentage of your leads generated can be used to identify gaps in your marketing, advertising and user experience.

5. ROI and ROAS

Depending on your ROI, youll be able to evaluate whether your investment was financially worth it. If your companys ROI is high or positive, its generally a worthy investment. If its low or negative, its typically not.

In marketing, ROI is the specific return on investment a company receives from the funds they spend on marketing and advertising. ROI compares the revenue benefits of a marketing campaign to its overall cost to identify the most cost-effective ways to increase earnings. Using this metric in conjunction with lead generation and conversion rates allows a company to track the precise value of the average customer. This is calculated by dividing the revenue generated from each lead into the amount you invested in the advertising that produced the lead.

Return on ad spend (ROAS) is another useful metric if you invest heavily in advertising to generate sales. ROAS measures the exact amount of revenue your ads have generated for your business. This number is separate from your overall profit but offers a clear indicator that your ads are working to your advantage.

6. Customers

Customers are often the clearest reflection of a companys success. Many companies find valuable insight in measuring customer experience as a key metric for long-term success, relying heavily on the data around brand-customer relationships to monitor trends and form sustainable practices. Increased focus on the customer experience has led to a rise in metrics that quantify these relationships from every angle.

Here are some customer-focused metrics you can measure for your organization:

7. Employee satisfaction

Employee satisfaction is the level of contentment your employees feel for their position. Often overlooked as a critical metric, employee satisfaction correlates directly to customer satisfaction, making it essential to business success. Satisfied employees can lower rates of employee turnover and the need to redistribute resources.

Take the time to make sure your employees have a positive and supportive work environment equipped with the tools and resources needed to be successful. Happy employees are more likely to spread that feeling when communicating with a customer who then will be likely to remember the interaction as a pleasant experience.

Tips for setting success metrics

Here are some tips to keep in mind when setting success metrics for your organization.


What is an example of a success metric?

Here are some examples of success metrics: Your average weekly visits. Your average page views. Number of products sold per week/month.

What are the 4 types of metrics?

The researchers have determined that only four key metrics differentiate between low, medium and high performers: lead time, deployment frequency, mean time to restore (MTTR) and change fail percentage.

How do you choose success metrics?

When choosing between multiple metrics, pick the simplest measurable metric you can move. For example, if your number of advertisers is correlated with your revenue, and the number of advertisers is easier to measure and move, choose the number of advertisers.

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