"Did revenue increase or decrease this month?
"This is a familiar question in most business meetings.
However, revenue is merely an outcome. CEOs need to examine the underlying causes that drive that result. I have encountered many businesses where:
• Revenue rose, yet profits fell.
• Sales outlets expanded, but sales per outlet declined.
• Revenue grew thanks to promotions, but costs outpaced that growth.
On the surface—looking only at revenue—everything seems fine. But when examining the system, the problems were already present.
5 METRICS CEOS SHOULD TRACK MONTHLY: Numeric Distribution (In how many outlets is the product present?), On-Shelf Availability (OSA) (What percentage of outlets consistently have stock?), Sales per Outlet (How much revenue does each outlet generate?), Gross Profit Margin (What is the actual profit margin?), and Repeat Purchase Rate (How many customers return to buy?).
Two businesses achieving the same 100 billion VND in revenue could face vastly different futures depending on their market coverage, OSA, and repeat purchase rates.
Revenue is a lagging indicator (an outcome metric), whereas the five metrics above are leading indicators of growth.
PNP NEWS PERSPECTIVE: Great CEOs do not merely look at what has already happened; they focus on the factors that will drive future results.
Which metric is most frequently overlooked by Vietnamese businesses? PNP Vietnam – Grow Local & Expand Global. Contact us:
Website: pnpvietnam.com.vn
Email: info@pnpvietnam.com.vn
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