An overview of the top 7 key performance indicators for graphic design companies

Introduction

As a graphic design business owner, it can be difficult to track and measure your success. However, it is essential to do so in order to understand the success of your business and to make the necessary improvements in its performance. The Key Performance Indicators (KPIs) of a graphic design business are important metrics to track as they provide insight into the success of the business.

Tracking and calculating the top seven KPI metrics for graphic design businesses can be daunting and time-consuming. In this article, we will discuss these KPIs and how you can track and calculate them effectively.

The seven main KPI measures for graphic design companies are:

• Gross revenue
• Expenses
• net profit
• Customer retention rate
• Average cost per acquisition
• Average customer lifetime value
• Customer satisfaction rate

Gross revenue

Definition

Gross revenue is the total amount of money earned from selling goods and services before all fees are taken out. This includes sales from all sources and channels, such as retail stores, online sales and other outlets.

Benefits of Tracking

Tracking gross revenue is one of the most important metrics for any business. It provides a clear understanding of how much money the business is generating and whether the business is meeting its goals. It also provides an important benchmark for measuring performance against competitors in the same industry.

Industry Benchmarks

Average gross earnings for graphic design businesses are usually between ,000 and ,000 per year. However, this can vary greatly depending on the size of the business, the number of customers and the type of services offered.

How to calculate

The formula for calculating gross income is simple:

Calculation example

For example, if a graphic design business had total sales of 0,000 and refunds and returns of ,000, the gross revenue would be:

Tips and tricks

Tracking gross revenue is an important part of running a business. Here are some tips and tricks to keep in mind:

• Regularly track gross revenue to get an accurate picture of financial performance.
• Compare gross revenue to industry benchmarks to see how your business performs in comparison.
• Be aware of refunds and returns that may affect the gross revenue figure.

Expenses

Definition

Expenses are the costs incurred in running a graphic design business. These costs can include rent, utilities, employee salaries, benefits, office supplies, and other costs associated with the day-to-day operations of the business.

Benefits of Tracking

Tracking expenses are important for any business, and this is especially true for a graphic design business. Tracking expenses allows the business owner to keep a close eye on the money being spent, and it can help identify areas where money could be saved. Tracking expenses can also help the business owner better understand the true cost of running their business and can help them make good decisions about investing their resources.

Industry Benchmarks

There is no standard benchmark for spending in the graphic design industry, as each business has its own unique needs and cost structure. However, it’s important to compare your expenses to those of similar businesses to better understand how your business measures up. This can help you identify areas where you can save money, and it can also help you identify areas where you may need to invest more resources.

How to calculate

The formula for calculating expenses is simple:

Calculation example

For example, if a graphic design business had total costs of ,000 and total revenue of ,000, the expenses for the business would be calculated as follows:

Tips and tricks

• Track regular spending so you can spot trends early and make adjustments.
• Compare your expenses to those of similar businesses to better understand how your business measures up.
• Be sure to include all costs associated with running your business, such as rent, utilities, employee salaries, benefits, office supplies, and other expenses.

net profit

Definition

Net profit is a key performance indicator (KPI) metric used to measure a company’s profitability. It is calculated by subtracting the total expenses from the total revenues, which results in the total net profit. This metric can be used to assess the overall efficiency of a business and compare performance over time.

Benefits of Tracking

Net profit is a valuable metric for assessing the overall health of a business. By tracking net profit, businesses can better understand their financial performance and can set goals to increase profits. Additionally, tracking net income over time can help companies identify trends and adjust their strategies accordingly.

Industry Benchmarks

Industry benchmarks for net profit vary by industry and type of business. Generally, companies should aim for a net profit margin of 5-10% to stay competitive. However, some industries may have higher or lower benchmarks depending on the type of products or services offered.

How to calculate

The formula for calculating net profit is as follows:

Calculation example

For example, if a business has total revenue of 0,000 and total expenses of ,000, net profit would be calculated as follows:

Tips and tricks

• Track net profit over time to identify trends and adjust strategies accordingly.
• Be aware of industry benchmarks for net profit and aim to stay competitive.
• Analyze expenses to identify potential savings areas.
• Compare net profit to other KPIs to better understand overall business performance.

Customer retention rate

Definition

Customer Retention Rate (CRR) is a KPI metric used in graphic design companies to measure the number of customers who continue to do business with the company over a set period of time. It is calculated by dividing the total number of customers at the end of the period by the total number of customers at the beginning of the period.

Benefits of Tracking

• The CRR allows graphic design business owners to track customer loyalty and strategize to improve customer retention.
• It helps identify customer issues and target areas for improvement.
• The CRR allows a company to measure the effectiveness of marketing campaigns.

Industry Benchmarks

The average customer retention rate for graphic design companies is 68%. However, this rate may vary depending on the nature of the business.

How to calculate

To calculate CRR for graphic design companies, use the following formula:

Calculation example

For example, if a graphic design company had 100 customers at the beginning of the month and 90 customers at the end of the month, the CRR would be calculated as follows:

Tips and tricks

• Monitor changes in customer numbers over time to identify areas for improvement.
• Invest in customer loyalty programs to encourage customers to continue doing business with your company.
• Provide excellent customer service to ensure customer satisfaction.

Average cost per acquisition

Definition

Average cost per acquisition (CPA) is a metric used to measure the cost of getting a new customer. It is usually calculated by dividing the total cost of acquiring new customers by the total number of new customers. CPA is an important measure of the success of a marketing campaign and is used to optimize marketing performance.

Benefits of Tracking

Tracking CPA allows businesses to better understand the return on investment (ROI) of a marketing campaign. CPA can also be used to compare the effectiveness of different marketing channels and campaigns. By monitoring CPA, businesses can identify areas where they can improve their marketing efforts and maximize their return on investment.

Industry Benchmarks

The average CPA for a company can vary depending on the industry, but generally speaking, companies should look for a CPA below the average for their industry. The average CPA for a business can be found by researching industry benchmarks or consulting a digital marketing expert.

How to calculate

The formula for calculating APC is as follows:

Calculation example

For example, a company spent a total of ,000 on a marketing campaign that resulted in the acquisition of 100 new customers. The campaign CPA would be calculated as follows:

Tips and Tricks for KPIs

• Track CPA regularly to ensure marketing efforts are effective.
• Analyze CPA performance across different channels and campaigns to identify areas for improvement.
• Aim for a CPA below the industry average.

Average customer lifetime value

Definition

Average Customer Value (CLV) is a key metric used to measure the success of a company’s customer relationships. It tracks the total revenue generated by each customer during their relationship with the company. This metric can be used to measure customer loyalty and inform marketing strategies.

Benefits of Tracking

Tracking customer lifetime value helps companies identify their most valuable customers and understand the value of their customer relationships. Tracking CLV can also help companies identify areas for improvement and make informed decisions about their customer acquisition and retention strategies.

Industry Benchmarks

Average customer lifetime value varies from industry to industry. For example, the average customer value for a financial services company is generally higher than for a retail company. Additionally, the customer lifetime value of a company’s existing customers can be compared to the customer lifetime value of its new customers to measure the effectiveness of customer acquisition strategies.

How to calculate

The formula for calculating customer lifetime value is:

Calculation example

For example, if a company’s average revenue per customer is and the average customer lifetime is 3 years, the customer lifetime value would be 0.

Tips and tricks

• Analyze customer lifetime value to identify customer segments that have the highest value.
• Segment customers by lifetime value to understand which customer segments should be targeted for acquisition and retention.
• Compare the customer lifetime value of existing customers to the customer lifetime value of new customers to measure the effectiveness of customer acquisition strategies.
• Use customer lifetime value to inform marketing strategies and measure the return on investment of marketing campaigns.

Customer satisfaction rate

Definition

The customer satisfaction rate (CSR) measures the level of satisfaction from the customer’s point of view. This metric is important for a graphic design company because it provides insight into how customers view the quality of the company’s products and services.

Benefits of Tracking

Tracking CSR allows a graphic design company to identify areas for improvement, as well as areas where services are excelling. It also allows the company to measure customer satisfaction over time, allowing them to make better decisions regarding their marketing and product development strategies.

Industry Benchmarks

The average customer satisfaction rate for the graphic design industry is around 90%. This means that 90% of customers are satisfied with the products and services provided by the company.

How to calculate

The formula for calculating CSR is:

Calculation example

For example, if a graphic design company has 100 clients and 80 of them are satisfied with the services, CSR would be:

KPI Tips and Tricks

• Regularly review customer feedback to identify areas for improvement.
• Analyze customer satisfaction data over time to track progress.
• Provide incentives or rewards to customers who provide positive feedback.

Conclusion

As a graphic design business owner, tracking and calculating the top seven KPI metrics is essential to understanding business success. Gross Revenue, Expenses, Net Profit, Customer Retention Rate, Average Cost Per Acquisition, Average Customer Value, and Customer Satisfaction Rate, are the seven key performance indicators that should be tracked and calculated. These KPIs will provide you with valuable insight into the success of your graphic design business and can guide you in making the necessary improvements in its performance.