What are business metrics?

Business metrics are the standards of measurement by which the various aspects of a business are evaluated. Each area of a business, including marketing, sales and administration, has its own set of metrics. Key metrics include sales revenue, cost of customer acquisition and gross margin.

Sales revenue is the income made from customers purchasing goods or services from the business. Numbers must be compared to those of similar businesses and correlated to specific efforts the business takes to increase revenue.

Cost of customer acquisition is the amount of money spent to gain a customer. Dividing the money spent to attract customers by the number of new customers yields this value.

The size of gross margin is the amount of total revenue minus the cost of goods sold, divided by the total revenue. The higher the percentage, the more profit the company makes.