Software testing metrics - Improves the efficiency and effectiveness of a software testing process. Software testing metrics or software test measurement is the quantitative indication of extent, capacity, dimension, amount or size of some attribute of a process or product. Example for software test measurement: Total number of defects. This article provides a list of HR Metrics for HR analytics with corresponding examples. The metrics in this article include Revenu per employee, Cost & Time of hire, Turnover rate, Cost of HR, Time since last promotion, the 9-box grid, and more. These metrics form the basis of data-driven decision making in HR. Software Metrics Private and Public Metrics ( contd. ) - The public metrics has more meaning on a overall team basis. The public metrics can be computed depending upon the private metrics made public by the individual software professional. They are more concerned with the project team rather than any individual software professional.

HOW DO YOU measure your company’s performance?

The way not to do it is by following your gut feeling. Running a successful business requires a thorough analysis on the work, sales, and financial results. And it can’t be done without tracking relevant business metrics.

Business metrics, also called KPIs (key performance indicators) display a measurable value that shows the progress of a company’s business goals.

They’re usually tracked on a KPI dashboard. Business metrics indicate whether a company has achieved its goals in a planned time frame.

There are hundreds of different key performance indicator examples, but there’s no use in measuring all of these. Depending on your business goals, you should track business metrics that really show how your business is doing.

Tracking irrelevant KPIs will distract you from focusing on the things that truly matter. This way, you’ll end up stressing about the numbers that have no actual impact on your company’s development. So it is highly important that you not only track business metrics but also choose the right ones to perceive.

Read On:What is a KPI? (The Complete Guide)

Examples of business metrics:

Sales Revenue
Net Profit Margin
Gross Margin
MRR (Monthly Recurring Revenue)
Net Promoter Score

Up next, we’ll explore 12 popular business metrics that reflect on your company’s performance and indicate growth or decline.

1. Sales Revenue

We chose to put this metric first as it can tell a lot of things about your company. Month-over-month sales results show whether people are interested in buying your product/service, are your marketing efforts paying off, are you still in the competition, and much more.

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When evaluating your sales revenue and setting goals, it is important to remember that sales results are affected by multiple other factors. The person tracking the sales KPIs should also be aware of recent changes in the market, previous marketing campaigns, competitive actions, etc.

How to measure:

List Of Software Metrics

Sales revenue is calculated by summing up all the income from client purchases, minus the cost associated with returned or undeliverable products.

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How to improve:

The most obvious way to grow your sales revenue is to increase the number of sales. This can be done by expanding your marketing endeavours, hiring new salespeople, or making discount offers that are hard to resist. Growing your sales revenue should be a long-term strategy rather than a quick (and temporary) boost in sales.

2. Net Profit Margin

This business metric indicates how efficient your company is at generating profit compared to its revenue. Basically, this number tells you how big a sum of? each dollar earned translates into profits.

The Net Profit Margin is a good way to predict long-term business growth, and see whether your income exceeds the costs of running the business.

How to measure:

Calculate your monthly revenue and reduce all the sales expenses.

How to improve:
You can improve your company’s Net Profit Margin by increasing your revenue.

The easiest way to do this is by raising the price of your products/services and selling more. Another method is to lower your sales and production costs while keeping up with the competition. Both of these tactics require thorough market research and long-term business strategy, and can’t be done overnight.

3. Gross Margin

The higher your Gross Margin, the more your company earns by each sales dollar. You’ll be able to invest it in other operations. This metric is especially important for starting companies as it reflects on improved processes and production. It’s like the equivalent of your company’s productivity, translated into numbers.

How to measure:
The Gross Margin equals your company’s total sales revenue minus its cost of goods sold, divided by the total sales revenue.

Alright, let’s put it into an equation.

Gross Margin = (total sales revenue – cost of goods sold) / total sales revenue

How to improve:
Gross Margin can be improved by making both your sales and production processes more efficient.

Read more: This 1-hour Weekly Work Audit Will Skyrocket Your Productivity

4. Sales Growth Year-to-date

Who wouldn’t love to see their company grow month-over-month? But sometimes, sales are highly dependent on the season and the mood of the customers. Sales Growth Year-to-date indicates the pace at which your company’s sales revenue is increasing or decreasing.

Monitor your sales growth over various time periods – monthly, yearly, and long-term metrics will give you a better understanding of where your company stands. Make it a goal to accelerate your sales growth every month, or at least keep it at the same percentage, month over month.

How to measure:
Check your monthly sales revenue and the number of new deals.

If your sales team work in multiple teams, you can also track this business metric by every team. This way, you’ll get a better overview of each sales department’s achievements.

How to improve:
Similarly to Sales Revenue metric, this KPI can be increased by investing more resources in your marketing and sales activities. Sales Growth can also be boosted by positive media coverage or a new product launch.

5. Cost of Customer Acquisition

Have you ever thought how many small things contribute to acquiring a customer?

The Cost of Customer Acquisition (CAC) is calculated by dividing all the costs spent on acquiring new customers (marketing expenses) by the number of new clients acquired in a specific time frame. If you spent $8000 on marketing in September and acquired 40 customers in this time frame, your CAC is $200.

The Cost of Customer Acquisition should always be measured together with the Customer Lifetime Value. If a new client is worth the average of $1400 to you, acquiring them for $200 is a reasonable deal.

How to calculate:
The easiest way to calculate the average Customer Lifetime Value is to multiply the average value of a sale by the number of repeat transactions and the average retention time in months for a typical customer.

Calculating the CLV depends on your product specifics – are you selling on a monthly basis, is it a big one-time transaction, or do people return to make repeat purchases? Here’s a great infographic by Kissmetrics, explaining the CLV in-depth.

How to improve:
Evaluating the Customer Lifetime Value of various client segments can help you understand which segments bring in a higher profit. Let go of clients who are decreasing your net profit and difficult to convert, and focus on the most rewarding audience.

6. Customer loyalty and retention

Having loyal customers is beneficial in many ways. It helps to grow your sales, and spread the word about your product. The Retention Rate shows the number of clients who keep using your

Software Metrics Examples