Question 20

Sales growth measures the change in revenues during a specific period of time.

Sales growth is a key performance indicator that specifically reflects the change in a company's revenues over a defined timeframe, indicating how effectively a business is increasing its sales.

A) Customer acquisition cost

Customer acquisition cost measures the expenses associated with acquiring new customers, rather than focusing on revenue changes. It does not provide insight into revenue growth over a specific period, making it irrelevant to the question.

B) Cannibalization rate

Cannibalization rate refers to the percentage of sales lost by existing products when a new product is introduced. While it can impact overall revenue, it does not directly measure the change in revenues over time, thus not aligning with the question's focus.

C) Average purchase value

Average purchase value calculates the average amount spent by customers per transaction. Although it is a useful metric for understanding sales behavior, it does not directly indicate revenue changes over a specific period, which is the essence of the question.

D) Sales growth

Sales growth is the metric that specifically tracks the increase in revenue over a designated time frame. It effectively illustrates how well a company is performing in terms of generating more sales, thereby making it the correct answer.

Conclusion

Sales growth is the only option that directly measures the change in revenues over a specific period, making it the most relevant key performance indicator in this context. The other options, while valuable metrics, do not address the question of revenue change, thereby confirming that they are incorrect.