Measuring Business Performance

In automotive, everyone stares at the same KPIs. Units. Gross. CSI. Nothing wrong with that, but KPIs only tell you where you landed. They don’t tell you how much you left on the table. Jay Abraham calls them OPIs.  Overlooked Performance Indicators. The tiny leverage points inside a dealership that almost no one pays attention to. And he’s right. Because when we started examining our own operation through that lens, here’s what we saw: Most of the biggest opportunities weren’t new initiatives. They were already happening… just not maximised. Things like: - How many service customers get an equity scan, every single day. - How quickly calls are returned. - How many unsold showroom ups get re-engaged the same day. - How many customers are actually aware they can leave service in a new car with a lower payment. - How many of yesterday’s RO customers got a follow-up. These aren’t budget items. They’re behaviour items. And when you improve several of these by just 10%? It’s not 10% growth. It compounds. Jay calls it multiplicative, and he’s not exaggerating. We saw it firsthand. No new building. No new staff. No miracle inventory. Just a team willing to question everything, tighten every gap, and squeeze every ounce of value out of the opportunities we already had. The result? One of the best months we’ve ever had. Because we got better at the invisible work that drives the visible numbers. That’s the real lesson here: The dealership doesn’t transform because of a single big move. It transforms because the team stops walking past the small ones. If you’re running a dealership, here’s a question worth asking: What are the OPIs in your business and who’s watching them?

Why CAC (Customer Acquisition Cost) Should Be Every CMO’s True North Every CMO juggles dozens of metrics: ROAS, CTR, conversion rate, lifetime value, engagement. All useful. But there is one number that consistently tells the truth about growth: CAC. Why CAC matters most It shows exactly how much you are paying to acquire a new customer. It forces you to balance efficiency with scale. It connects marketing performance directly to profitability. The danger of ignoring it You can celebrate a high ROAS, while acquisition costs quietly erode margins. You can scale top-line revenue, but at a loss. You can optimise for clicks or conversions that don’t translate into real growth. How to use CAC as your north star Calculate CAC by dividing total marketing spend by new customers acquired. Compare it to your customer lifetime value (LTV). Align every campaign, channel and test to improve the CAC:LTV ratio. When CAC is your true north, you stop chasing vanity metrics and start leading marketing as a profit center. Question: Do you currently measure CAC monthly, or only look at it during big strategy reviews? #ecommerce #digitalmarketing #CMO

Are you measuring what matters in your organization? A comprehensive measure of organizational effectiveness includes much more than profit margins and growth rates. The market and media often celebrate companies that show rapid financial growth or high profitability, leading to a cultural bias towards these metrics as signs of success BUT the tide is slowly turning- more businesses are recognizing the long-term value of a holistic approach to effectiveness and success. Many more businesses are embracing the concept of the "Triple Bottom Line," which measures success not just by financial profit ("Profit"), but also by the company's impact on people ("People") and the planet ("Planet"). HOWEVER 🚨 There is more work to be done! The prioritization of non-financial elements of organizational success can get pushed aside when financial pressures hit or quick results are valued. You have probably heard the phrase "What gets measured gets managed". This is generally true. Quantifying and measuring non-financial aspects of effectiveness, such as employee well-being, social impact, and workplace culture, is hugely important but remains challenging. 💡 Here's some straightforward steps to move you towards a more holistic approach to measuring success: 𝐒𝐭𝐚𝐫𝐭 𝐰𝐢𝐭𝐡 𝐜𝐥𝐞𝐚𝐫 𝐠𝐨𝐚𝐥𝐬: Define what holistic success means for your organization. This could include specific targets related to employee well-being, social impact, and environmental sustainability. 𝐄𝐧𝐠𝐚𝐠𝐞 𝐬𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬: Talk to employees, customers, and community members to understand what aspects of your business matter most to them. Their insights can help shape your holistic success framework. 𝐂𝐡𝐨𝐨𝐬𝐞 𝐫𝐞𝐥𝐞𝐯𝐚𝐧𝐭 𝐦𝐞𝐭𝐫𝐢𝐜𝐬: Based on your goals and stakeholder feedback, pick metrics that are meaningful and manageable. For example, employee satisfaction can be measured through regular surveys, while environmental impact can be tracked through energy consumption or waste reduction metrics. 𝐔𝐬𝐞 𝐞𝐱𝐢𝐬𝐭𝐢𝐧𝐠 𝐟𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤𝐬: Look into established frameworks (like GRI or B Corp standards for sustainability; Gallups Q12 Engagement Survey for employee engagement or the Denison Organizational Culture Model to measure workplace culture). There are existing frameworks for most known elements of organizational effectiveness so it's just a matter of looking into them. 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐞 𝐢𝐧𝐭𝐨 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧-𝐦𝐚𝐤𝐢𝐧𝐠: Ensure that these holistic metrics are part of regular business reviews and decision-making processes, not just side projects. 𝐑𝐞𝐩𝐨𝐫𝐭 𝐭𝐫𝐚𝐧𝐬𝐩𝐚𝐫𝐞𝐧𝐭𝐥𝐲: Share your progress openly, including both successes and areas for improvement. Transparency builds trust and credibility. 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐨𝐮𝐬 𝐥𝐞𝐚𝐫𝐧𝐢𝐧𝐠: Be prepared to adapt and refine your approach as you learn what works and what doesn't. This is a journey, not a one-time task. #organizationaleffectiveness #measurewhatmatters #leaders

𝗜𝗱𝗲𝗮 #𝟭𝟲: 𝗠𝗲𝘁𝗿𝗶𝗰𝘀 𝘁𝗵𝗮𝘁 𝗺𝗮𝘁𝘁𝗲𝗿: 𝘁𝗵𝗲 𝗯𝗲𝗮𝘂𝘁𝘆 𝗼𝗳 𝘀𝗽𝗶𝗹𝗹 𝗮𝗻𝗱 𝘀𝗽𝗼𝗶𝗹 I worked with a hotel chain that was focused on two high-level KPIs: 𝗮𝘃𝗲𝗿𝗮𝗴𝗲 𝗿𝗼𝗼𝗺 𝗿𝗮𝘁𝗲 (𝗔𝗥𝗥) and 𝗼𝗰𝗰𝘂𝗽𝗮𝗻𝗰𝘆 (%).  Occupancy was around 80% and had increased year on year but this aggregate average was hiding significant opportunities. When we de-averaged the overall occupancy by hotel and night, we discovered that very few hotels were 80% full: most were either completely full or only half full.  We reframed performance using two “failure metrics” (see illustration): • 𝗦𝗽𝗼𝗶𝗹: measured empty rooms (by hotel, by night). • 𝗦𝗽𝗶𝗹𝗹: measured “lost trading days” when a hotel reached full occupancy too early. By analysing 𝘀𝗽𝗶𝗹𝗹 𝗮𝗻𝗱 𝘀𝗽𝗼𝗶𝗹 𝗮𝘁 𝗮 𝘀𝗶𝘁𝗲-𝗻𝗶𝗴𝗵𝘁 𝗹𝗲𝘃𝗲𝗹, we uncovered significant value: • Spoil caused by pricing too high or insufficient marketing.   • Spill caused by pricing too low or overmarketing.   𝗦𝗽𝗼𝗶𝗹 𝗶𝘀 𝗮 𝗳𝗮𝗰𝘁. 𝗦𝗽𝗶𝗹𝗹 𝗶𝘀 𝗮 𝗺𝗼𝗱𝗲𝗹. One measures what you wasted; the other estimates what you missed.   The principle applies to almost any decision made under uncertainty: where there’s finite capacity and variable demand, there’s always a 𝘀𝗽𝗶𝗹𝗹-𝘀𝗽𝗼𝗶𝗹 𝘁𝗿𝗮𝗱𝗲-𝗼𝗳𝗳.  I’ve applied this framework across a diverse range of businesses: • 𝗖𝗮𝗹𝗹 𝗰𝗲𝗻𝘁𝗿𝗲𝘀: spill = calls with no agents (missed sales); spoil = agents with no calls (wasted labour). • 𝗥𝗲𝘀𝘁𝗮𝘂𝗿𝗮𝗻𝘁𝘀: spill = understaffed hours (poor service); spoil = overstaffed hours (low productivity). • 𝗦𝘂𝗽𝗲𝗿𝗺𝗮𝗿𝗸𝗲𝘁𝘀: spill = missed sales (poor availability); spoil = waste (over-stocking). Every business wrestles with these two-sided costs – the 𝗰𝗼𝘀𝘁 𝗼𝗳 𝗲𝘅𝗰𝗲𝘀𝘀 and the 𝗰𝗼𝘀𝘁 𝗼𝗳 𝗺𝗶𝘀𝘀𝗲𝗱 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆.  Once you measure both, you can manage the balance intelligently.  The best metrics don’t just describe performance – they expose 𝘧𝘢𝘪𝘭𝘶𝘳𝘦 𝘮𝘰𝘥𝘦𝘴 that can actually be fixed. Key takeaways: • Analyse at the most atomic level that could be actionable (hour, site-night, SKU-store, agent, keyword etc.) • Define the acceptable 𝗴𝘂𝗮𝗿𝗱𝗿𝗮𝗶𝗹𝘀 for that atomic outcome.  • Systematically analyse the distribution of performance outside guardrails. • Recognise that averages hide opportunities where good and bad performance offset each other There’s a fascinating 140-year history of optimising these decisions which are commonly referred to as Newsvendor problems – but that story deserves its own post.

Can you explain what happened here? If you can't, your business may be in BIG trouble. If you work in strategic finance, understanding how to comprehend + explain financial data is not a nice to have...it's a MUST. It doesn't matter whether you are presenting to leadership...the board of directors...or investors. If you don't have a tight grip on your data, you'll be faced with some catastrophic surprises. Let's learn how to interpret + present this by walking through this report together 👇 ➡️ PROFIT & LOSS SUMMARY Your P&L might look decent at first glance... We beat our bottom line net income by 14% 🙌 But a closer look reveals some important details... - Revenue is down 10% ($50K below budget) This is a pretty alarming metric and may mean that your assumptions are too aggressive here. Was it because your conversions rates were lower than expected? Was churn higher than expected? - COGS is actually BETTER than expected by 40% This makes sense...your revenue was lower, so your COGS should also be lower. But there's something more interesting to address here... your gross margin was 80%, compared to your projected 70%. While the variance is favorable it highlights an important question - do you have a strong grip on your unit economics? - Operating expenses are 10% favorable compared to budget. That's good...but why? Which accounts? Was it timing? Was it a change to your plans? - Net Other Income was -$10k compared to your projected +10k. Accounts here typically relate to interest income/expense, depreciation/amortization, and non core business activity. Although $10k may not seem like a lot, it warrants an important analysis This all leads to a $15k favorable net income, which is 14% higher than expected. All done with our analysis? Not quite... We've analyzed the PROFITABILITY of our business, now it's time to analyze our CASH FLOWS ➡️ CASH FLOWS SUMMARY This is where things get puzzling: - Collections are down $70k (78% below target 🤯 ) - Inventory up by $20k over budget - Total cash flows is $35k below budget Woah! We beat earnings but missed our cash flows by 27%?? Believe it or not, this story happens all the time...and it's up to you to see the forest beyond the trees and take action QUICKLY. ➡️ PUTTING IT ALL TOGETHER Your P&L is looking OK, but there are some strong indicators that you don't have a grip on your unit economics, and your revenue projections may be a bit overstated. But the biggest issue by far is your cash flows. You were supposed to collect $90k more than you invoiced this month but instead you only collected $20k. If you have $1m in the bank that may not be too material. But if you have $200k in the bank? Now things get more dangerous. That's why it's CRUCIAL to review this report each and every period - you don't want to be taken by surprise. === How would you interpret these results? What actions would you take? Share your analysis in the comments below 👇

I’ve seen founders celebrate a 3X ROAS but struggle to explain how long it takes to recover what they spent. Everyone talks about CAC. No one talks about payback. How long does it take to earn that money back? Here’s a breakdown: 1. First, define CAC correctly. It’s not just ad spend. CAC = Total sales + marketing cost / Number of new customers acquired Include: • Media + agency fees • Team costs (salaries, tools, commissions) • Discounts, freebies, referral bonuses Exclude returning customers: CAC is only for new acquisition. 2. Next, calculate payback period. That’s how long it takes to recover CAC from gross margin, not revenue. Payback = CAC / Gross Margin per month per customer For example: If your CAC is ₹1,000 and you make ₹200 in gross margin per customer per month, your payback period is 5 months. 3. Why does this matter? • If payback > 12 months, your growth is capital-intensive • If payback < 3 months, you’ve got a lean acquisition engine • If CAC is rising and payback is stretching, you’re scaling too fast or inefficiently 4. Bonus: Always look at CAC:LTV ratio • Healthy benchmark: 1:3 (spend ₹1 to make ₹3 over the customer lifetime) • Anything below that = long-term loss, even if ROAS looks good short term Performance marketing is powerful. But only when CAC, margin, and payback speak to each other. Did you find this useful?

Most startup founders don’t truly understand their business numbers. And that’s a big problem. We talk about building, scaling, and fundraising — but what if the core numbers aren’t clearly defined? I’m sharing this post for every founder, early-stage investor, and curious learner. If you’re building a product, these 8 metrics can decide your business's future. Let’s talk real fundamentals. 1. Bookings ≠ Revenue Bookings mean the customer has signed and committed to pay. Revenue is counted only when you actually deliver the product or service. Verbal deals or letters of intent are not bookings or revenue. 2. Recurring Revenue is everything One-time fees may help in the short term. But recurring product revenue shows long-term value. That’s why ARR and MRR matter. And they must keep growing. 3. Gross Profit shows real health The top line may look good. But what’s left after the delivery cost tells the truth. Please just keep your costs clear. Know what you’re including in gross profit. 4. TCV vs ACV TCV = full contract value (can be 1, 2 or 3 years). ACV = what the customer pays you every year. If your ACV is growing, your product is becoming more valuable. 5. Lifetime Value (LTV) This is not just revenue. It’s the net profit you expect from a customer over their journey. LTV helps you decide how much to spend on getting a customer. 6. GMV vs Revenue GMV shows the total transaction value on your platform. Revenue is what you actually earn from it. Investors always check what part of GMV you’re keeping. 7. CAC — Paid vs Blended Always track CAC for paid marketing separately. Blended CAC hides the cost reality. If you know your true CAC, you can scale more confidently. 8. Churn tells the real story High churn = leaking bucket. Gross churn tells you what you lost. Net churn tells you what you lost after upgrades. Both matter. Don’t hide behind upsells. You can’t run a business with only a gut feeling. You need sharp data and a sharper understanding of that data. These 8 metrics can help you see what your business is actually doing. Every serious founder must know them. Not just for investors. But to lead the business the right way. Let’s make better businesses. With truth. With clarity. And with numbers that actually make sense. #businessstrategy #startuptips #founderlife #entrepreneurship #financialliteracy #AbhishekVyas

Are You Spending Too Much to Acquire a Customer, Or Not Enough? E-commerce brands often focus on lowering their customer acquisition costs (CAC). But what if cutting CAC is actually hurting growth? The real question isn’t just how much does it cost to acquire a customer? It’s how much should you be spending? If you knew with certainty that a customer would generate $500 in long-term profit, would you hesitate to spend $100 to acquire them? Probably not. But many brands take a one-size-fits-all approach, capping CAC at an arbitrary percentage of their first purchase revenue. This can lead to underinvestment in acquiring high-value customers and overinvestment in customers who won’t stick around. A better approach is to align CAC with long-term customer equity, not just at a blended level, but dynamically across customer segments. Some customers have significantly greater revenue potential than others. The challenge is identifying which customers will create sustainable profitability over time. The chart illustrates that customer acquisition cost (CAC) and lifetime value (LTV) are not linear, spending more on acquisition can lead to higher-value customers, but only up to a certain point. Key Insights: There is an optimal CAC range. - Spending too little on CAC (left side of the chart) may result in acquiring lower-value customers, limiting long-term profitability. - Spending too much (right side of the chart) can lead to diminishing returns, where LTV does not justify the extra spend.   The breakeven threshold matters. - The red dashed line represents where CAC = LTV, meaning any spend above this line is unprofitable unless justified by strategic goals (e.g., market share growth). Smarter spending, not just lower spending, drives profitability. - Many brands mistakenly focus only on reducing CAC, but the real goal is to align CAC with future LTV dynamically across customer segments. What This Means for Retailers Instead of asking, “How much does it cost to acquire a customer?”, the real question is: - How much should we spend to acquire the right customers? - How long will it take to break even on acquisition costs? - Which acquisition channels and products lead to the highest-value customers? Retailers who leverage AI-driven insights to align CAC with future Customer Equity, not just at a blended level but dynamically across customer segments, can spend smarter, scale faster, and drive long-term profitability. If you want to go deeper on this topic, Professor Peter Fader has done extensive research on customer-centric growth strategies. Check out this fascinating podcast with Nick Hague on how businesses can take a more data-driven approach to optimizing CAC. https://lnkd.in/eGu5EM5g #CustomerAcquisition #EcommerceGrowth #MarketingStrategy #CustomerEquity #GrowthMarketing #CACvsLTV #RetailStrategy #Profitability #WGBTpodcast

This test predicts your promotion better than your performance review: If your week is full of fires, crises, and emergencies, read this carefully. Because once you hit Director, the system stops rewarding the behaviors that built your career. And that’s where most high performers get stuck. Here’s the uncomfortable truth: If leaders see you as the fixer, the firefighter, the reliable operator... you are being valued, but you are not being promoted. VPs don’t get rewarded for solving problems. They get rewarded for preventing them. They’re assessed on: • Judgment • Clarity • Systems they build • Outcomes they drive through others Not how many messes they personally clean up. So if you’re always the one jumping in to save the day, leaders have mentally filed you under execution, not executive. Here’s the test that tells you exactly where you stand: Open last week’s calendar. Tag every meeting with one of these: D = I was driving a decision O = I was owning the outcome E = I was executing or supporting Now count them. Most reliable doers are shocked by how heavily their week skews toward “E.” And that data explains exactly why the promotion conversation hasn’t moved... no matter how hard you work. If you feel stuck, don’t blame your performance. Check your calendar. It’s a clear mirror of how the organization currently sees you… and where you need to shift next.

You probably track result metrics. But do you track the levers behind them? Everyone wants to grow key metrics: AOV, LTV, etc. However, most dashboards stop there. They show what happened, not what to fix. Here’s what you should be managing: → AOV ↳ Average Discount ↳ Cross-sell Success Rate → Gross Profit ↳ COGS ↳ Net Return Impact → Conversion Rate ↳ Add-to-Cart Rate ↳ Checkout Completion Rate → CAC ↳ Product Page View Rate ↳ Ads CTR → Repeat Purchase Rate ↳ Time Between Purchases ↳ Email Click Rate → CSAT ↳ On-Time Delivery Rate ↳ Ticket Resolution Time → Organic Traffic ↳ Coverage Issues ↳ Keyword Rankings No one grows AOV by watching AOV. And growth comes from managing what’s underneath. This cheat sheet is a reminder: If you want to grow this… manage that. 📌 Save this. Share it with your team. Which of these levers do you track today?