Popular KPIs That Startups Track

1. Customer Acquisition Cost (CAC): CAC = Total Marketing and Sales Expenses / Number of New Customers Acquired. This metric helps startups understand the cost associated with acquiring new customers. It involves calculating the total marketing and sales expenses and dividing it by the number of new customers acquired within a specific period.
2. Monthly Recurring Revenue (MRR): MRR = Total Monthly Revenue from Subscriptions or Contracts. MRR is a crucial metric for startups with a subscription-based or recurring revenue model. It represents the total revenue generated from subscriptions or contracts on a monthly basis.
3. Churn Rate: Churn Rate = (Number of Customers Lost during a Period / Total Number of Customers at the Start of the Period) x 100. Churn rate indicates the rate at which customers are leaving or canceling their subscriptions. It is calculated by dividing the number of customers lost during a specific period by the total number of customers at the beginning of that period.
4. Customer Lifetime Value (CLV): CLV = Average Purchase Value x Purchase Frequency x Customer Lifespan. CLV measures the total value a customer brings to a business over their lifetime. It considers the average purchase value, purchase frequency, and customer lifespan to estimate the long-term revenue potential of each customer.
5. Burn Rate: Burn Rate = Total Monthly Expenses / Cash Reserves. Burn rate represents the rate at which a startup is spending its cash reserves. It involves dividing the total monthly expenses by the available cash reserves, providing an estimate of how long the startup can sustain its operations.
6. Conversion Rate: Conversion Rate = (Number of Conversions / Total Number of Visitors) x 100. Conversion rate measures the percentage of visitors who take a desired action, such as making a purchase, signing up for a service, or completing a form. It helps assess the effectiveness of marketing campaigns and website performance.
7. Gross Profit Margin: Gross Profit Margin = (Total Revenue — Cost of Goods Sold) / Total Revenue x 100. Gross profit margin measures the percentage of revenue remaining after deducting the cost of goods sold. It indicates the profitability of a startup’s products or services.
8. Return on Investment (ROI): ROI = (Net Profit / Investment Cost) x 100. ROI measures the return on the investment made by a startup. It involves dividing the net profit (revenue minus expenses) by the cost of the initial investment and expressing it as a percentage.

By tracking these KPIs listed down by Markoknow, startups can gain insights into their performance, identify areas for improvement, and make informed decisions to drive growth and success.