I read an article aimed at business start up's recently,
which talked more about measuring the success of a business by tracking it's
web traffic than it did about monitoring revenue, cash and profit... It got me
thinking about what is important for all businesses to measure.
These days, there
is no denying that driving web traffic, optimising your search engine ranking
and generating a loyal online following are critical to business, but I don't
know many shareholders or investors that would be willing to invest in this
alone. Therefore it comes down to balance and to finding the right things to
measure for your business and focussing on them relentlessly in order to drive
forward.
While every
business is different I believe that there are a few things that every business
should monitor;
Customer
Unless you have a
monopoly in your market, you have competitors... Your customers know this
and they're quite happy to listen to the benefits of trading with
your competition rather than with you. So, listen carefully to your
customers and find ways of measuring their satisfaction levels and dealing with
their requests for change. Engaging with customers can transform your
business... they have feedback for you on everything from how you greet them, to
how easy or difficult your products are to use. So, understanding what works
for your customers is key. If you can adapt your service and products to the
demands of the market, you're more likely to keep the competition at bay. Apart
from talking to your customers about this, you may also want to measure their
satisfaction...
I've seen many
methods of measuring customer satisfaction/ engagement over the years,
'Net Promoter' Scoring being one of the more common. Net Promoter is a simple
measure of how likely your customers would be to recommend you to a colleague
or friend. It is based on the premise that only customers that are happy and
satisfied would be willing to actively recommend your service and there is
evidence that businesses with high NP scores will also enjoy business
expansion. Where organisations with low or negative NP Scores will contract.
You can read more about Net Promoter here; http://en.wikipedia.org/wiki/Net_Promoter
People
Your people are your business... they represent you every day and are the
face of your organisation. There is an undeniable link between how
happy and effective your people are and the experience your
customers receive too. Creating an environment where your employees enjoy
their job and feel like you are investing in them as individuals will always
mean that you get the best from your team.
If you're a bigger
business you may choose to survey your workforce and measure their levels of
engagement, if you're smaller you may just want to speak to every employee face
to face about what can be done to improve the different aspects of their relationship
with you and your company.
Things to
consider, include; working environment, relationships with co-workers and line
manager, communication, reward and recognition (not just financial). There are
other elements too, and it's likely that you'll have things that are unique to
your company. Whatever these are, make sure you spend time to
understand how your people feel about them and act on their feedback.
Operations
There are things
in every business which need to run effectively in order for you to function.
Commonly, it's things like; manufacturing of product or key service levels
being met. These are hygiene factors and customers tend to take it
for granted that these will be delivered on time, in budget and in agreed
service levels.
Make sure you map
your key processes and eliminate as many key person dependencies as you
can. Is there a critical path of activity you should understand and have
contingencies for? Have plan b's for key deliverables, because your
customers won’t forgive you too often for letting them down.
And finally... The
Numbers
Call me old fashioned, but I think this is a pretty important
measure for business. Anyone who has managed a business, big or small, will
tell you that keeping a close eye on the numbers is critical. Your revenues and
profits are in essence the ultimate outcome of everything you do. They reflect;
the quality of your product, how your customers value your service, how
successful your marketing is, how well you are managing your capital and
spend... everything!
So, let me explode a myth... watching the numbers isn't just about the revenue and profit. It will help
you to monitor the health and wellbeing of your business, in the short and long
term. I once heard it said that "Money isn't everything... but it ranks right up there with
oxygen!".
When it comes to your business, money is just that, oxygen! It's
also the output of your efforts... it won't appear without the diligence and
focus on the inputs we've talked about in the areas of people, customer and
operations. So 'measure' the inputs and 'enjoy' the outputs.
By all means, make sure your web listings are optimised, watch the
YouTube and Facebook friends soar as you promote them to the world... but don't
forget the good old, time honoured measures of business success; Engaged and
happy people, enthusiastic and satisfied customer and efficient
operations. Get these right and chances are, the numbers will follow.
