W1 - What are business metrics?

Question 1

What do business metrics help us?

Answer 1

ASK THE RIGHT QUESTIONS -> find the best answer in the time available (what decisions should we make? + What process should we change right now?) -> translate that answer into recommended action -> communicate with the “decision-makers” - stakeholders

Question 2

What is the right question?

Answer 2

“What changes can be made RIGHT NOW?” to: Increase revenue, Maximize profitability, Reduce risk.

Question 3

what is a business metric?

Answer 3

are numbers that WE CAN IMPACT when we change our business processes. -> Sales Tax is not a business metric. Click through rate is a business metric.

Question 4

What does “right now” really mean?

Answer 4

1. (ideal) “we have decisions in real-time.” • No more than a fraction of a second 2. Next best answer is: Just-In-Time • Individuals who interact with customers have full transaction record 3. Third best answer, which is still good: • Changes cannot happen overnight, but we will make it happen as soon as it has been tested and is known to work

Question 5

latency?

Answer 5

The time delay in a computerized response caused by processing requirements or distance a signal must travel.

Question 6

real-time?

Answer 6

Computer systems that provide a customized response immediately (typically in less than 1 second).

Question 7

What does Business metrics consist of?

Answer 7

Revenue, profitability, and risk metrics.

Question 8

What information we can get from the Revenue metric?

Answer 8

They tell us something about how well or badly the company is marketing and selling its products.

Question 9

What type of business metrics does the VP of sales care about?

Answer 9

revenue metrics

Question 10

sales funnel?

Answer 10

The metrics used to track the steps in the process of converting individuals or Companies with a potential interest in one’s product or service into paying customers.

Question 11

the chief operating officer in vietnamese?

Answer 11

COO GD dieu hanh

Question 12

net cash flow?

Answer 12

dong tien rong

Question 13

churn rate?

Answer 13

The portion of customers who leave within a year.

Question 14

how do Large established companies with relatively little room to increase revenues can often achieve significant increases in profitability?

Answer 14

by focusing on improving operational efficiencies.

Question 15

fixed costs?

Answer 15

Costs that do not increase or decrease with small changes in production. An example are salaries for current full-time employees.

Question 16

inventory

Answer 16

Finished goods on hand and not yet sold.

Question 17

operational metrics

Answer 17

Metrics related to production, and in particular, to production eciency.

Question 18

recurring-revenue customers

Answer 18

Customers who buy again repeatedly after a first sale.

Question 19

Revenue metrics are for? profitability metrics for? , and risk metrics for?

Answer 19

Revenue metrics are for optimistic extroverts, profitability metrics for fastidious perfectionists, and risk metrics for informed skeptics.

Question 20

2.Question 2

Which of the following business metrics is an example of a revenue metric?

0 / 1 point

• Average days inventory
• Rental prices of apartment leases by locations
• Customer satisfaction with a product
• Percent defective items from an assembly line

Answer 20

Rental prices of apartment leases by locations

The Video, Distinguishing Revenue, Profitability, and Risk Metrics at 0:28-2:02, defines “Revenue Metrics” as outward-facing metrics that have to do either with sales (for example, revenue and unit sales by time interval, customer, or geographic region, the “funnel” of qualified leads for enterprise sales) or marketing (for example, response rates to advertisements or email campaigns).

Question 21

Which of the following business metrics is an example of a profitability metric?

1 / 1 point

• A grocery store’s tracking record of customers’ fish purchases
• Total annual costs of goods sold of an office product store
  
  • How many fresh baked cakes have to be thrown away at the end of the day unsold
• The annual sales record of a company that makes phone apps

Answer 21

How many fresh baked cakes have to be thrown away at the end of the day unsold

Question 22

Which of the following business metrics is an example of a risk metric?

1 / 1 point

• Days inventory of computers in an electronics store
• Monthly negative cash flow for a start-up
• Winter jacket sales during summer time
• The loss due to unsold fresh fruits each year at a grocery store

Answer 22

Monthly negative cash flow for a start-up

The Video, Distinguishing Revenue, Profitability, and Risk Metrics at 3:33-5:02, defines “Risk Metrics” as those relating to “potential dangers a company faces…Net cash out is always the most important [risk] metric to track. How many months can the company survive at the present burn rate?”

Question 23

Identify which category the following business metric belongs to:

Units sales segmented by new and recurring customer

1 / 1 point

Revenue metric

Profitability metric

Risk metric

Answer 23

Revenue metric

Question 24

The amount an airline spends on aviation fuel each month is what type of metric?

1 / 1 point

• Revenue metric
• Profitability metric
• Risk metric

Answer 24

Profitability metric

The Video, Distinguishing Revenue, Profitability, and Risk Metrics at 2:02-3:33, defines profitability metrics to include “how much is spent on variable costs [such as] raw materials and labor.” Cost of aviation fuel is at least partially under the Company’s control, as it could make changes in equipment or routes that would improve cost per passenger seat mile, or use options to guarantee future fuel prices.