Why is this important?

Understanding the size of the market in which a company is operating and the rate at which this market is shrinking or growing is a key indicator to assess future revenue growth potential.

A key role of the management team is that they identify future growth opportunities in existing and new markets. Therefore identifying these markets and evaluating their growth rate is a vital piece of performance data.

The size of the market is measured by the total number or value of units (goods or services) sold in that market during a specified time period (usually one year). The market growth rate is a simple ratio of taking the market size of this period (e.g. this year) and dividing it by the market size of the preceding period (e.g. last year). A market growth rate of below 1 indicates a shrinking market while a ratio of above 1 indicates a growing market.

With respect to Marketing and Sales Perspective, below are a few KPI’s which a businessman should be mindful of:

• Market growth rate
• Relative market share
• Brand equity
• Cost per lead
• Conversion rate 
• Search engine rankings (by keyword) and click-through rate
• Page views and bounce rates
• Customer online engagement level
• Online share of voice (OSOV)
• Social networking footprint
• Klout score