The Profit Benchmark Metric #3
Welcome to our series, OMG : One Metric for Growth where we dive deep into real-life example of how one metric helped an organization to grow their business. Today's Metric for Growth is :
“Gross Profit Benchmark” 📈
Why Gross Profit Benchmark is Important? 📊
The goal of all business goals is making profits! Profit is not only about surviving but also thriving in today’s competitive environment. The real Performance measurement within the team and within the industry comes through profit.
About ITCG Solutions Pvt Ltd!📊
ITCG, incorporated in 1994, is one of the Prominent Value Added IT Solution providers in Gujarat & Maharashtra. They are associated with leading global players like Microsoft, Adobe, Autodesk, Oracle, Symantec etc. & authorized sub distributor for brands like Sophos, NComputing, Dell-SonicWall, QNAP & Plantronics range of products.
How ITCG is using Gross Profit Benchmark Metric?
ITCG realized that increasing only Topline will not help them to achieve their long-term goals. In an industry where profit is not disclosed, they took a bold step and gave all team members targets as a measure of Profit and not sales alone.
Previously every sales team member was coming to management for discounts and instead of focusing on growth the management team was involved in handling these deal-to-deal activities.
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They decided to change the system and give Gross Profit target to every sales team member and GP was considered as a key performance metric. They identified the industry benchmark for GP and accordingly prepared the target for their company.
This transparency ensured that all stakeholders understand their responsibilities and now everyone was aware what was expected from them, and they can take their own call without involving management. The team now have real-time access to sales and profit and the incentives are aligned with the organization goals.
3 major advantages gained by ITCG
- Reviewing performance became easy as everyone had clarity what was the metric to be measured and what was the expectation.
- Discounts became a conversation only when it was absolutely necessary as sales with low profitability margins did not help in achieving targets.
- Actionable Insights were readily available as everyone can drill down the data and identify the gaps
Whenever You are Ready! 🔑
Your metrics don't just reflect the past; they lead the future. At Magenta, we specialize in turning these metrics into actionable steps.
Our Business Intelligence software seamlessly integrates with ERPs like Tally, Busy, SAP, and you can set target (for Sales / GP etc) and get real-time insights on Target vs Achievement. If you haven't already signed up for Magenta Insights, now is the time!
Stay tuned for next week's edition of "One Metric for Growth" as we delve into another crucial aspect of business. Until then, seize the opportunities that lie within your data!
Customer retention is the key
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What are the most relevant factors to consider?
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Don’t overspend on growth marketing without good retention rates
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What’s the ideal customer retention rate?
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Next steps to increase your customer retention
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