Top 3 Metrics to Improve for a Successful 2023

While some voices that financially benefit from strong, growing economies will continue their upbeat tone and continue to pump feel-good propaganda about a “soft landing” by the Fed, we at Prescriptive Profits believe it is going to be a bumpy road for the economy and are planning accordingly.

Rising interest ratesincreased car repossessions, and decreased retail spending during the holiday season are some of the warning signals for a troublesome 2023 economic outlook. While at Prescriptive Profits we do not have the “canary in the coal mine” signals like waffle house closures indicating hurricane intensity, we feel the culmination of data we’ve reviewed points to plenty of economic turmoil next year.

But enough of the doom and gloom, tough times always have silver linings. Tough economic times are when businesses that have strong foundations don’t just survive but thrive. Here are a few metrics that will strengthen the foundational integrity of your business and set you apart over the next year.

#1 – Net Revenue Retention (NRR)

Taking care of your customer base through renewals and upsells will be vital to success in 2023. With the uncertainty of the macroeconomic environment, red tape and caution signs will be implemented by organizations to limit spending in tighter economic conditions.

The saving grace is that your existing customers will typically have fewer of these roadblocks to contend with, since they’re already customers, so the sales process will be less strenuous for you and your customers.

So what are a couple levers you can pull to increase your NRR in ‘23?

Lever #1: Decreasing your customer churn rate.

While growing your customer’s spend with you is a way to increase your NRR, it means nothing if you’re not retaining your customers at the same or increased value. Putting an emphasis on your customer success initiatives to maximize the customer’s experience with your organization will help limit and ultimately decrease the churn rate.

Lever #2: Free trials of additional products.

As an organization’s finance department makes their way down lists of tools that organizations use, they will ask for reductions in spending on a variety of tools. If your current product has the capability of a tool that has just been cut from a budget plan, a trial of your product’s capability should be a prime way to introduce it to the client.

#2 – Lifetime Value of a Customer | Customer Acquisition Cost (LTV : CAC)

Locking in new logos is essential for growth but if the potential clients you’re chasing are not your ideal customer then the juice might not be worth the squeeze. Costs to acquire customers will increase over the year as restrictions are put in place to limit spending.

So, how do you combat this?

By enhancing the value that customers will bring to you over their lifetime.

Analyzing the lifetime value of customers, along with the cost to acquire certain segments, will allow you to identify who your ideal customers are.

#3 – Sales Velocity

Time between an initial meeting and deal closure should indicate an entry point at the right persona and seniority level.

When budgets start to restrict, potential clients are less likely to take a meeting and sales reps who want to continue to fill their pipeline and funnel will expand their outreach efforts to include additional seniority levels and adjacent departments.

A clear view and metric into which persona and seniority level is required to close deals, and close quickly, will allow for proper forecasting to the business throughout 2023.

If your organization can nail these 3 metrics, you will be in a much better position to succeed in 2023. If not…

Let’s get to work.

Prescriptive Profits #19