How to Choose Your Success MetricsOct 24, 2022
[Listen to the Podcast version here]
Are you measuring what’s truly important to your business success?
In the world of online business, it’s easy to get distracted by the number of likes and comments we get on our social media posts and feel like we’re making progress towards our goals.
Now, I’m not saying post engagement isn’t important.
I am saying there are plenty of other metrics that we should be watching in our business to see if we’re edging closer to our goals or just spinning our wheels.
The ones you choose will be specific to your business – what works for me won’t necessarily work for you, so I want to focus today on how to choose what works for you.
If you’ve been following me for long, you know I love to plan.
I wrote two articles recently to building your annual plan, so if you haven’t read those yet, go back and check them out! They could be helpful in selecting your metrics if you haven’t gone through your planning process yet.
Review your goals
The best place to start is to review your short-term and long-term goals.
If you haven’t looked at them in a while, pull them up on your computer while you’re listening so you can refresh your memory.
What do you want to accomplish in your business in the next 12 months?
Then, let’s look further out.
What do you want to accomplish in the next 2 – 5 years?
List each of these goals out with a time frame so you can go back and sort them later.
Here are a few of my goals:
- In the next 12 months, annual revenue will exceed $500k
- In the next 12 months, I will have a team of 2-3 people to assist with sales and marketing
- In the next 3 years, annual revenue will exceed $1M
For each of your goals, come up with 2-3 things that you could measure to show progress.
Let’s go back to my goals:
- In the next 12 months, annual revenue will exceed $500k – I could measure:
- average sales per customer
- conversion rates for my ad campaigns
- number of new customers per month
- In the next 12 months, I will have a team of 2-3 people to assist with sales and marketing – I could measure:
- Personal time spent on marketing activities
- When the cost of outsourcing marketing exceeds the cost of hiring someone inhouse
- Time spent acquiring new customers
- In the next 3 years, annual revenue will exceed $1M – I could measure:
- Sales rep workload capacity
- Time spent acquiring new customers
- Customer lifetime value
I have other goals, but I chose these because revenue and team goals are fairly common and they’re easier to relate to.
As you’re writing out your 2-3 things, you’ll probably see common themes emerge.
For me, I need to understand the data around how I am acquiring new customers, how much they spend with me, how much time my team is spending performing sales and customer service activities, how we can do this efficiently while delivering amazing results and then take that data to build a plan to grow revenue to reach my goals.
If I took the time, I could easily come up with 10-15 different data points I’d want to look at.
And that’s just revenue and team goals.
That doesn’t even scratch the surface of all the things I want to accomplish.
I hope you can see how quickly this process can get out of hand.
This leads me to the next step…
Narrowing your focus
You can’t measure everything AND deliver amazing service AND keep your costs under control.
Go back and look at the data points you wrote down.
Here are some questions to think about:
- Where is there crossover?
- Which ones will give you the most bang for your buck?
- Which ones could you start measuring now?
- If you aren’t tracking the data you need, what would it take to get you there?
- How much time and money would you need to allocate?
At this point, you may be feeling a little frustrated or overwhelmed or both.
You might be thinking – I don’t have enough in place to do this!
That’s ok! It’s perfectly normal!
I don’t have a full-fledged CRM in place that can track all the customer data I need. I don’t even have 1 sales rep right now. It’s just me and my VA.
Start with what you can measure now.
- What reports come with your software?
- How can you use that information to gather the data you need?
You’ll probably have to use a spreadsheet to pull all the data together. There are a ton of great videos out on YouTube if you need help with that.
Once that’s in place, then you can start the planning process to work up to tracking the other things you want to track.
Do your research.
You may need to upgrade your software. Or use technology like Zapier to connect the software you have now to get information from one place to another. Or hire an Excel expert for a couple of hours a week to create your metrics dashboards and update them for you.
Take your time.
Don’t try to do it all at once. Running your business is hard enough without adding more projects on your plate. Also keep in mind that when you change your systems and processes, you need to account for down time as you and your team are learning how to use them. If you change too much too quickly, customer service could suffer, so plan accordingly.
Don’t be afraid to ask for help
If you and your team don’t have the capacity to handle this on your own, bring in an expert! There are people who specialize in evaluating systems and processes and implementing improvements. This is part of what I do for my clients. If you need help, let me know! I offer a complimentary discovery call where we can discuss what’s happening in your business and see if it makes sense for us to work together. I’ll add a link in the show notes to make it easy for you!
I want you to open your calendar now and book some time this week to come back to this article and work on selecting your success metrics. If you need to build up to some of your metrics, add that to your annual plan and work on getting those things in place!
Need help getting ready for next year?
Annual planning is only one part of the puzzle!
If you’re behind on your bookkeeping, tax payments, and/or filing your taxes, these need to be addressed as well!
The longer you wait, the more painful it will be.
Penalties and fees stack up quickly with the IRS.
Harrington Strategic Partners can help you get ready for tax season, even if you’re years behind!
We offer a wide range of services to streamline your accounting and let you focus on what you do best - manage and grow your business!
- Catch Up Bookkeeping
- Monthly Bookkeeping
- Budgeting & Forecasting
- Cash Flow Management
- Strategic Planning
- Process Development
- Owner Coaching
- Team Training
If accounting is not your cup of tea and you’re interested in how your company could benefit from working with an accounting firm, I’d love to chat! You can access my calendar here.