To make more money and deliver better experiences for travellers all over the globe, your company needs to grow. But how do we measure growth? What are the best indicators of growth? How does one decide which indicators to use to measure growth?
Let’s find out.
Defining Key Performance Indicators to measure business growth
To measure growth, you need Key Performance Indicators. What you decide to measure as a Key Performance Indicator or KPI is up to you. According to Tara Gentile, there are a few things you need to look out for when deciding what KPIs you want to track.
- Know the difference between a vanity metric and a KPI that leads to your goals.
- Vanity metrics are metrics commonly tracked that don't actually convert into bookings or revenue. The most common vanity metrics are Twitter Followers or Facebook Likes.
- KPIs that matter are the ones that lead to people booking your trips.
- Track metrics that follow your customers' journey.
- Before making a booking: What are customers doing before they book? Think about their journey from landing on your website, social media profile or TripAdvisor listing, to browsing offers that lead to a booking.
- During the booking process: If they have to send you an enquiry about their trips, how many of these enquiries fail to become a booking? Why?
- After making a booking: How many of your customers follow through to payment and turn up for your trip? What can you do to increase this conversion rate?
- After taking a trip with you: How did they rate your trip? How many of them come back to you again and again? Did they recommend you to their friends and family?
- Your KPIs should also reflect both your long and short-term business goals. Learn about the stages of your customers' journey, and find out how to maximise your marketing efforts at each stage.
At the end of the day, ask yourself this to determine your KPIs: "What actions do my customers to take that lead to a booking?" Track those actions.
So, for example, if 1000 website views lead to 50 enquiries about a trip, that finally lead to 10 bookings, you would want to measure not only the number of each customer action, but also the conversion rates of each one.
5 common KPIs to track growth
To help you get a head start, here are a few KPIs that are commonly tracked, and that can be easily tracked with TrekkSoft. In the words of Martin Zwilling, "In the long run, these tell you whether you will live or die, compared to competitors."
1. Bookings secured
- With TrekkSoft's Sales report, you can track your Sales (or bookings secured for future trips) based on the booking date.
- This feature is great for forecasting future income and can be cross-referenced with Cash Flow reporting.
- It is important to note that the sales report does not indicate revenue because the trip has not been taken. Here, one of two scenarios can happen: a) a customer has yet to make a payment, or b) your trip might not happen and therefore needs to be refunded.
- The Turnover report indicates the revenue made on a specific value date, also known as the date when a customer takes a trip with you.
- If you do not take a down payment or a full payment prior to the trip, it is important to track the conversion between sales and turnover to indicate how many customers actually turn up for a trip, and pay for it.
3. Cash Flow
- Use TrekkSoft’s Cash Flow reports to show how much money you have in your bank account at any given time. It reflects all the payments made to you have received, including down payments for future trips and Shop Items.
- This report can also be used to check how much revenue your resellers and agents made for your business.
4. Inventory / Trips booked
- Also with our Inventory reports, you can track which activity was booked, and to what extent.
- Here, you are able to tell how popular a specific trip is on any given date or time. This allows you to adjust your resources accordingly to accommodate peak trip times and exploit unseen opportunities.
5. Customer retention
- Measuring customer retention is important to ensuring growth in any business. The 80/20 rule (or Pareto's principle) states that 20% of your customer base is likely to bring in 80% of your total business. The key here is ensuring that you focus on customer loyalty and retention.
- You can use TrekkSoft to manage your guests can track their every booking, email or enquiry with you.
- This can help you identify the more profitable segment of your customer base, and focus your marketing and retention efforts on them.
Setting up systems to track your KPIs
Data entry can be boring and time-consuming, especially when results cannot be seen immediately. Data collection takes time, and metrics only become valuable over time, when they start to tell you a story about your business.
Here are some tips to help you stay on top of tracking your metrics and KPIs.
- Set a calendar reminder to remind you to do it.
- Weekly: Data entry and a simple analysis
- Monthly: Carry out a deep analysis and look for trends and patterns
- Export your data into a Google spreadsheet and share it with team members so that everyone on your team has a clear picture of how the business is doing.
- You can also create multiple users with TrekkSoft and give them direct access to the data.
- Assign Data Entry to someone else on your team to save you time.
For TrekkSoft customers, head over to our documentation to learn more about our reporting feature.
Download this free ebook to get more tips on how to grow your business by working with online travel agents.