[00:00:00] Emma: Today we are diving into the four most important numbers that every business owner should track. Spoiler alert though, they’re not the ones that you might think. Sure. We absolutely need to look at revenue and we need to look at profit, but there are also some other metrics that every business owner needs to know. are the numbers that will give you clarity. They’ll show you what’s working and they’ll help you focus your energy where it counts. grab a cuppa, settle in and let’s uncover the metrics that can transform your business.

[00:00:36] Welcome to the Business BFF, the podcast where fierce and fabulous business women come together for the kind of real talk and honest advice only your besties would give. I’m your host, Emma Bowdler, founder of The Women’s Accountant, and I’m here to help you navigate the wild world of business, finance, and life, whether you’re scaling up Starting fresh or [00:01:00] just need a pep talk from someone who gets it, you’re in the right place.

[00:01:04] So grab your favourite bevy and get comfy. It’s time for a chat with your business BFFs.

[00:01:13] Emma: So there are four numbers that we’re going to talk about today. And the first one is retention rates. So if you haven’t heard of retention rates before, what a retention rate is, it’s the percentage of clients who continue to use your service over time. So they’re the ones that keep coming back year in, year out. So if you’re an accountant, I’m an accountant, but if I use my business as an example, it’s the rate in which I do tax work, or I do work for a client in this year, and then they come back in the next year. the formula we use to work that out is it is your returning client’s divided by your client, total clients, and you multiply that by a hundred. I can [00:02:00] hear you saying what the freak has that got to do with anything? But there’s some reasons why this matters. clients. clients is significantly more cost effective than continuing to buy new ones. If you follow any of the marketing experts out there, they will tell you that the cost to acquire a new customer is always significantly higher than what it is to retain an existing one. It also matters because Loyal clients provide consistent income. you know, if you are a business who uses word of mouth, they are also often the best resource for referrals.

[00:02:47] And what I’ve certainly found is that really good and loyal clients will always refer clients who are like them. So I think about ideal customers or [00:03:00] ideal clients. That is often a really great way. What it also does is it

builds really strong relationships with your clients and it reduces the churn rate, which I guess in turn creates that really long term stability. It’s to be stability for a business. Now let’s look at an example and I’ll try and use some really practical examples when I go through this. So you’re a copywriter and you’re a copywriter who has got 15 clients spending 1, 000 a quarter on blogs and email campaigns. If you are, let’s say your retention rate.

[00:03:41] So taking who’s coming back versus the total, let’s say your retention rate is 70%. 70 percent of that is 42, 000 annually. Okay, so that’s not a sneeze. But if you were to, let’s say, put some strategies in place to [00:04:00] increase your retention rate to 85%, that means that you’re keeping 13 clients every year instead of 11. So what does that mean in dollar value? That means that you’re boosting your revenue to 52, 000 a year. so that’s a 10, 000 difference just by focusing on really strong client relationships. So some of the ways that you might do that and some of these are some of the things that we’ve implemented with clients before to improve that conversion rate is that sorry, that retention rate is that we’ve implemented feedback loops to help understand client satisfaction. You know, people will often tell you what is wrong if they’re exiting, but they won’t ever tell you what is right. So able to ask those questions at different interviews. throughout the year or throughout the relationship will help you understand the level of satisfaction. [00:05:00] You might want to consider creating loyalty programs to offer exclusive benefits to returning clients. If you are a product based business, you probably already do that. What we have done personally in our own business, because we’re service based, is that we offer referral incentives. So again, like I mentioned before, often your best source of new work is from existing work. So, know, we offer cashback incentives for clients who refer our services to other people. Another way that you might want to improve that is consistently communicate the value of your product or service through regular check ins in updates. So whether that’s email marketing, whether that’s simply just jumping on the phone and checking in, that’s a really great way to improve that retention rate. The second number that you [00:06:00] absolutely need to know is your conversion rate. So your conversion rate is number of inquiries you get versus the number of conversions. So for instance, if you have got 20 inquiries in a month and you only convert for. Then what’s that like as a percentage? So this one matters because conversion rates track how effective your marketing and sales strategies are. Okay, plain and simple. That’s that’s really the crux of it. When you can improve that metric, you can increase the value without spending Spending I guess, extra money in the marketing And I guess, you know, one of the other reasons that just comes to mind is that you can make small changes in your sales funnel that lead to big results. So, you know, this is a often I guess it is a work in progress and it needs to definitely come down to [00:07:00] messaging and you know, who you’re talking to and all of those types of things. But in my experience, when you increase that conversion rate, it does have a really big

impact. will just say though, if you are in a service based business and your conversion rate is really, really high, In my experience, that often means that your product is priced too low. Okay. Just keep that one in mind and definitely see what that looks like. So super simple example here is that you’re a mortgage broker. So let’s say if I use that 20 inquiries a month, say that you are receiving 20 inquiries a month and you’re converting 20 percent into clients. So basically you’re four deals a month. If you have a look at that process and improve the consultation process and the follow up and [00:08:00] you, you know, I guess change that conversion rate from 20 percent to 30%, what that means is that you’re securing six clients a month instead of four. If your average commission per deal was 2, 000, effectively what you’re doing is an additional 4, 000 in revenue a month, or if we looked at that annually, that’s 48, 000. Now the really 48, 000 annually, annually. So if we look at that you know, mortgage brokers, they speak to a lot of people. And the reality is if you’re. Bringing in 20 inquiries a month. You’re not really even happening to have any more conversations. All you’re doing is refining that process and effectively, you know, making an extra 4, 000 a month, which, you know, isn’t something to sneeze at. [00:09:00] So what are some of the ways that you can improve that? So absolutely streamline your sales process and see where the friction points are. see what you can do to remove them. You might want to consider personalize your marketing and the follow up with your connections and your leads more effectively. That is something that I’ve absolutely sucked at previously is particularly when I didn’t have team, I would get inquiries, I would send a proposal I would think they would are a really good fit, but I would lack that follow up process. So now we’ve built a system around that, that alleviates that.

[00:09:39] And as a result, our conversion rate has gone up. You might also want to consider using some testimonials or some case studies to build, you know, a higher level of trust or credit, creditability too, which is super important. Number three is [00:10:00] your average sale value. So the average sale value is the amount of money that your client spends per transaction. So it is a really simple to work out. If you take your total revenue and you divide it by your number of transactions, that will give you a dollar value. So why does that matter? Because increasing this metric grows your revenue without that need to get new clients. So, you know, that could look like upselling of premium offers or packages, and that effectively just boost your bottom line from the get go. So if we have a think about that, and let’s use the example of a graphic designer. So let’s say you’re a graphic designer. And you work with 10 clients a month and each of those clients is spending, let’s say 2, 000 [00:11:00] on branding projects. And so your monthly net revenue is about 20 grand. If you were to increase a, to, I guess, a premium package that offers more value to the client and 30 percent of your existing clients upgrade. Effectively, you’re increasing your revenue by 23, 000. this not only raises that monthly total, but it

also increases that average spend from 2, 000 up to 2, 300. And this alone can add thousands of dollars to your bottom line over time. So some of the ways that you might want to improve that is have a think about bundling services.

[00:11:47] You know, what can you bundle together that creates a higher value package for your clients? You might want to consider offering exclusive add ons or premium upgrades. [00:12:00] grades, or you might want to focus on educating clients about the value of those higher priced options. that’s a really good way to do that. The last metric that I want to talk about is the sales per customer. So the sales per customer is the number of transactions that each client will make with your business annually. So. You know, if I think about us as accountants, we’ve got four basses and a tax return to do. So, you know, for some clients that might be five, what can you do to increase that?

[00:12:40] So this number matters and it is probably one of the, I guess, You know, it’s one of those numbers that can really just by making a couple of changes can make a really big impact to your bottom line. So by encouraging repeat purchases [00:13:00] increases revenue again, same reason without needing to acquire new customers. And it also fosters that relationship where clients return regularly. It creates that more predictable income. Which is super, super important. So this example, let’s think about a personal trainer. So let’s say your clients, if you’re a personal trainer and your clients book, say 20 sessions a year, each of those sessions, sessions are 100.

[00:13:34] So that’s about 2, 000 per client per year. Let’s say that you then go and introduce a mid year program. So that could be something like a 500 nutritional coaching package, or it could be a bootcamp or whatever that kind of looks like. Like, and let’s say that then half of your clients opt into that. [00:14:00] So they opt into that nutritional package or they opt into a boot camp. So those 20 clients, that’s actually generating an extra 5, 000 a year, simply by offering more value to your existing client. So super valuable and really, really important to think about those things. So what can you do to improve it? So a think about some of the complementary services or products that align with the client’s needs.

[00:14:30] So the example of the personal trainer. Yeah, we can do the fitness side of things, but we all know that it’s the nutritional side of things that come with that. can also use some targeted campaigns that promote those additional services. So that’s a really good way and you might want to have a think about building some seasonal offers that keep your clients engaged throughout the year. there are loads of ways in which you can do that.

[00:14:58] So [00:15:00] you have it. There are. four numbers there that can completely change the way that you look at your business without necessarily

needing to go and find new clients. Now, if you’re serious about growing, scaling, or boosting your profit, these are the numbers that you absolutely need to know. they’re the key to making smarter decisions, staying focused and building a business that delivers real results. If you’re ready to go deeper, you can book a boom and bloom business strategy session with me, where I will deep dive into your numbers. I’ll show you what’s possible. And we together can map out some of the strategies that you might want to consider to help you getting there, over to our website or send me a message on Instagram at the women’s accountant to book your session. And let’s see what’s possible.

[00:15:52] Thanks for tuning in to The Business BFF. We hope you found this episode [00:16:00] equal parts big hug and kick up the bum. All the things a bestie is good for. Remember you’ve got this and we’ve got your back like only a BFF can. If you’ve loved what you’ve heard be sure to subscribe, leave a review and share it with your fellow business besties.

[00:16:18] Don’t forget to follow us on social media at The Women’s Accountant. For more tips, tricks, and behind the scenes fun, until next time, keep being fierce and oh so fabulous.

[00:16:30] Emma: If this episode resonated with you, share it with a fellow business woman. Or tag me at the women’s accountant on Instagram. And I would love to hear about the bold moves you’re planning for 2025.

[00:16:45] Mhm. Mhm