It has been said that the words “I think” are the most expensive words in business. Business is not about what we as individuals think; it is about what we know to be true for our collective market. What we know comes from measures and quantification.
Based on your business goals and values, what is important to your business future?
- Retaining customers?
- Finding Leads and Prospects?
- New suppliers?
- Systems in your business to gain efficiency?
- Saving money in business operations?
- New approaches to old problems?
Apply metrics consistently to your decision making so that you can get an objective view. The term “metrics” means the process of measuring your business success. Every business measures success in different ways, so the application of metrics to your situation will be unique. Make decisions based on metrics for your business, including the several groups of metrics listed below.
Marketing metrics are really important as marketing is what brings leads to you, so you can turn them into prospects and ultimately customers. What actions are your marketing programs creating in your customers and prospects? Are you cannibalizing existing customers from one product set to another, or are you bringing in new customers?
- Ads to lead generation to conversation ratios
- Sales metrics. What measures do you take regarding success in your sales process, and how do you support your sales team in moving forward on their success rates? Are you rewarding the activities you want and not rewarding those you don’t want?
- Future technology impacts. As technology continues to move forward at an incredible rate, how have you measured the impact of potential future scenarios on your business? How do you know you will be ready for the changes when they arrive? Will you lead the way, be a fast follower, or are you a late adopter?
Let’s look at existing customers now. Do you know the:
- Upper and lower value calculations for lifetime customer value
- Incremental cost/profit of a customer
- Customer capacity analysis of your existing business
- Costs related to maintaining your customers over time
- Cost of losing a customer
Every business is unique. In what other areas of your business can you apply metrics?
- call-centre statistics
- sales commissions
- elapsed time to generate sales (from ad to agreement)
- inventory returns
- employee turnover
Departmental metrics. For larger organizations, consider adjacent departments as your customers. How long does it take you to respond to their requests or pass along work? What can you measure within your department that is meaningful and comparable over time?
- Employee metrics. Turnover is an obvious measure of whether people like to work for you, but what else?
- Have you considered measuring and aggregating sick days?
Purpose of Quantification Your Results
There are several key purposes behind the quantification of your current results. First, it is important to understand the status quo at a greater level of detail. While it might feel like your team is doing well based on meeting targets, if in fact their success rates based on effort are lower than they could be, how long will you be able to sustain the pace? If your current level of business success is based on sprinting hard, will you be able to continue to sprint for the marathon? Different methods for measuring results bring different insights. To prevent future surprises, it is important to ensure that your specific biases are not shading your actual results.
Second, quantify current results so you can compare them to future results. Continuing from our previous example, it would be valuable to know that a few changes to what your team is doing could result in fewer sales calls and more sales results. Slow down the pace by focusing on what is important, and get better results.
Measuring can also be used to move the subjective experience into an objective domain and therefore describe these changes over time. Often, this technique is used to quantify intangible benefits as well.
We have fantastic tools that we use along with our expertise to guide businesses of all types through the evaluation process, and ultimately so they can increase their profits and grow revenues by 50% or more in 180-360 days. Be sure to signup for our free report “3 Biggest Lead Generation Mistakes Small Business Make”. It’s 15 pages of content and no sales pitch!
The next step is about creating and prioritizing your action plan.