Business Metrics You Should Know for Success
What are you keeping track of to ensure that your company is reaching its potential?
Performance metrics can be a powerful tool to help guide your decision making within your organization. If you’ve never even thought about performance metrics, then now is the perfect time to try it out as we start a new month in a new year. Here are some tips to help you get started:
Figure Out What to Measure
When you’re setting up performance metrics, the most important decision that you have to make is what to measure. If you are measuring the wrong thing, your metrics will only serve as a distraction and could possibly point you in the wrong direction.
- Focus on what is key to your organization’s success. You want to make sure that your organization’s performance is aligned with its mission, vision and goals.
- Most performance metrics focus on best practices, efficiency and critical processes. These metrics are most effective and most useful when you are measuring specific and quantifiable outputs.
- If you are measuring social media analytics, each platform has a built-in “Insights” or analytics component that you can review (even Facebook Groups!)
In a 2017 summary from Scoro on ’12 Business Metrics That Every Company Should Know’, it was recommended that these main areas should be a focus for all businesses when it comes to measuring and comparing data for growth and success:
- Sales Revenue
- Net Profit Margin
- Gross Margin
- Sales Growth Year-to-Date
- Cost of Customer Acquisition
- Customer Loyalty & Retention
- Net Promoter Score
- Qualified Leads Per Month
- Lead-to-Client Conversion Rate
- Monthly Website Traffic
- Met & Overdue Milestones
- Employee Happiness
For insights on each area, be sure to catch up on the article – it is a great read.
Find a Process that Works for Your Company
When developing the process that you will use to measure your organization’s performance, you need to find one that meets your specific needs. For an evaluation strategy to be successful, it must take your industry, your organizational culture and your company’s readiness for measuring performance into consideration.
- For example, if you are measuring email campaign success over a 1-month, quarterly, or annual basis, ensure that you are comparing your open rates and unsubscribe rate relative to your industry (something you can usually request from your CRM provider).
Talk to Your Team
To get their buy-in, it’s important that you involve your team/employees in the decision-making process right from the beginning. Have a meeting with them and ask what they think should be measured. When you come up with a process, ask them for their feedback. Make sure that your employees understand that it is the processes, not their performance, that you are evaluating.
Revise and Refine
After you get feedback from your team, re-examine your evaluation process to determine whether or not any changes need to be made.
- Are your performance metrics meeting your needs?
- Is the data accurate? Are you measuring the right things?
Remember that the way you measure your performance needs to evolve in order to keep up with your organization’s growth.
Since you’ve invested so much of your time, effort and money into your business, you want to make sure that you’re achieving your desired results. By measuring certain aspects of your organization’s performance you can allocate your resources in a way that will allow you to meet your goals.
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