A company’s Annual Report (AR) is one of the principal documents of interest to both current and potential investors because it is the window into the company’s financial position. Reading these documents could be very tasking sometimes, especially if you don’t know exactly what you are looking for and where to locate them. Annual reports do not necessarily have to be dry and boring, with difficult to interpret graphics and tables.
Good news is, annual reports could be exciting, concise, clear and have an overview of all the important facts that occurred in the year under review. In this article, some effort was made to explain some metrics that should be included in annual reports to improve readability.
Customer Acquisition Cost (CAC): This is an approximation of the total cost of acquiring new customers. It shows the price you pay to convert a lead into a sale; it also encompasses the cost sales, lead generation and sales personnel.
Conversion Rate:This metric is a very vital tool for business owners to measure the performance of products or advertising campaigns. This is different from click-through rate; conversion rate indicates how well prospective clients are doing what you expect them to do; converting.
Your aim could be that when customers visit your site, they should do any of the following call-to-action exercises:
Calculating the conversion rate requires you to divide the number of conversions for a specific time by the sum number of visitors and multiply by 100%.
For example, if you had 12500 visitors and 3215 conversions during the time under review, your conversion rate will be 3215 / 12500 x 100 = 25.72% pretty easy, isn't it?
If you set your tracking right and use the accurate analytics platforms, it will be easy to see your conversion rate in the interface.
Average Order Value (AOV): Average Order Value helps to trace the average amount spent on the customer's orders. Although it does not express gross profit or gross margins, it helps you to get insight into how those figures came about. Average Order Value is not only a useful tool for measuring average order but also very important for businesses to segment customers into various groups based on their purchasing history, considering the frequency of order, the types of products purchased or as you may so desire.
To calculate the average order value, you divide the revenue by the number of orders.
AOV =Revenue/number of order.
Customer lifetime value (CLTV)constitutes the total sum of money a customer is expected to spend in your business during his lifetime. It is a very important metric because it tells a company the profit to expect from their business relationship with a particular customer.
This metric is vital to a company because it is used to identify important customer segments that are the most valuable to the company.
Customer Satisfaction (CSAT):> as a business, it is essential to know how you are faring with your customers. One way to do that is to find out if customers are satisfied is through the use of an online survey. Customer satisfaction is a metric that measures customers happiness. The short survey allows customers to express their experiences on a scale in an attempt to uncover how satisfied current customers are with a particular product.
Customer Satisfaction is a great tool for customer retention and expansion plan. It gives you an insight into the quality of your support. Customer satisfaction as an indicator is essential because it helps as a point of differentiation and to increase customer lifetime value. Your survey should be easy to fill out. Below is a sample question.
To calculate CSAT, we apply the following formula.
Positive responses / total responses x 100% = %CSAT
Net revenue: being able to differentiate between report revenues is a critical skill for accountants. Net Revenues calculated by deducting your expenses from your gross revenue Understanding the difference between both helps to calculate your profit. This is the most important metric that portrays the success or failure of a business and as such investors should be interested in this because it indicates profit.
Customers Growth Rate helps to measure the rate at which the customer base is growing over a specific time; it is an indication of how a company is doing in terms of attracting new customers on board. It is not enough to generate data and have them sit there. When you do not apply your data appropriately, you are not able to benefit from the advantages of data-driven technology.
One reason why Clarobi exists is to help companies make the most out of their generated data. We provide solutions to help you get the necessary insight you require to leverage your strengths, know your weaknesses and act accordingly as well as identify what your threats and opportunities are.