Optimizing for efficiency
April 8, 2024
One of the key metrics the board is monitoring is our revenue per employee as it is a good indication of how efficient we actually are and how scalable we can be. Back in Q1 2022, we were averaging just $[ ]K in revenue per employee and yet by Q4 2023, we pushed it all the way up to $[ ]K and in recent months we're tracking even above $[ ]K. Behind this metric though is all the little things that we've gotten so much better at doing well.
Deals per Responsible Employee: Back in Q1 2022 with the team that we had, we were averaging just 1.4 deals per responsible employee per month. With the improvements in streamlining and standardizing the process, we're now all the way up to 7.3 deals per responsible employee per month as of the end of Q1 2024. We will see how much further we can push but even if this stabilizes, we have all the datapoints we need to know just how much more deal flow we can push through with each new team member we bring on board, a critical metric as we budget and forecast out the AUM growth.
Sign Ups per Dollars Spent: We are spending just $[ ]K per month on average more to acquire sign ups than we were in 2023 and yet we're acquiring on average [ ]+ or [ ]% more sign ups per month. This is a remarkable statistic that is a testament to how much better we've been able to optimize for spend and knowing where and what to spend on when it comes to all the different potential channels we can choose from.
Ratio of First Time Invested to Sign Ups: Sign ups won't mean much if we can't get the investors to cross and yet even though the sign ups have increased by so much, we're still maintaining a similar ratio to when we were signing up significantly less investors, indicating that we are actually targeting the right audience that can convert.
Distributions per Responsible Employee: Similar to Deals per Responsible Employee, as we ramp up deal volume, we need to understand how many distributions are manageable and how the Servicing team needs to scale up to account for more of the volume coming through. Back in Q1 2022, we were averaging just 7.9 distributions per responsible employee per month. This has ballooned significantly to 42.2 distributions per responsible employee per month, validating the continuous incremental improvements we've made on not just the operations side but also the technology and product side as well as we've shipped out more features to help support the Servicing team's efforts.
We must never lose sight of the continuous iterative and incremental improvements we can make. Revenue per employee is the outcome but it's all of these individual KPIs that drive the result. Let's keep optimizing.
