You can’t improve what you can’t measure.
I speak to business owners all the time about how we stimulate and measure growth for their business. While marketing is a big part of my business, I know that it takes every part of your business working in harmony for your bottom line to truly shine. I’m talking sales, marketing, finances, technology, human resources, customer service – not to mention the service or product you are actually selling. At Thirst, we always start by looking at a baseline of metrics so we can measure the impact of our activity on the clients bottom line.
Metrics are so often overlooked by brands, however, in my own personal experience, I have found that data is the key to visualising the progress of your business. I am a self-confessed data geek, yet I wasn’t always that way. The right metrics can create transparency within your organisation, provide targets for the team to work towards and allow you to pick up on opportunities or threats that may otherwise be overlooked.
In this blog, I am going to discuss a few metrics that I use to measure the success of my own business to give you a top-level guide of the metrics that matter for a growing business.
Sales are, quite naturally, an excellent place to start when it comes to measuring your business’s success.
It is important to not only plot revenue progression, but also understand the kinds of revenue your business is generating. You want to look deeper into your product line, and look for trends in any key products or services that indicate growth potential or strong revenue streams. Personally, as a business, we review the number of retainer clients or clients committed to ongoing contracts to see if that number is growing. We also measure revenue by department, against the people measure of full-time equivalent headcount.
Another good one to measure is your average sale value; the average of the sum of the projects that you are winning or combination of products you are selling in a single transaction. This is valuable as it provides an opportunity to cross-check your growth, develop more accurate customer value plotting and set benchmarks for the future. This will be an incredibly valuable indicator of whether your business is going in the right direction. At the end of the day, we all want to see our project values rising.
Leads are another metric of success; because to accurately plan for growth, you need to first understand demand.
You want to be measuring how many leads (potential consumers your business has), as well as the average value of each of these leads.
For our business, having a sales pipeline has provided visibility and comfort as the team and overheads have grown. Start with a simple spreadsheet and some discipline and track your numbers each month. From there, you can move up to a basic CRM and reporting tools like Podio, PipeDrive or any number of other tools on the market.
I built out a sales pipeline myself using the metrics that were right for my business and now our leads come directly into Podio from our website form. This automatically produces a report that tells me the value of what those leads will be over the next 3 months. I can then accurately plan my resourcing to suit the predicted demand. Easy!
Don’t forget to think about your existing clients. Capturing an uplift from clients or consumers you already have a purchase relationship with is a much more effective strategy than beginning the lead generation process from the start – as they say, it costs five times as much to attract a new customer than to retain an existing one. Begin to measure and brainstorm the opportunity of existing clients and you will open up a whole new stream of revenue flow.
Your metrics will always be flawed if you don’t consider the human value of your projections.
It is absolutely vital for business success that you have visibility over department demand and the number of people you will need working on projects to reach the value of your sales and leads metrics. An uplift in revenue by 20% means nothing if you have an uplift in people by 30% to achieve it. This was definitely a learning point for our business; at one point a few years ago, we were 6 months into a fairly heavy growth period when I realised I hadn’t actually forecasted the number of people we would need on deck to pull off the vast volume of work we had on the horizon. Panic ensued.
In a service based business like ours, to measure our human resources we now look at full-time equivalent headcount. From there you can measure how many people your business feasibly needs to achieve your projected revenue. You may also want to measure revenue per headcount – I find that one to be extremely valuable.
I think it is also important to recognise the personal development of your team, as this once again will act as a benchmark for the future technical advancement of your business. At Thirst, we measure how many hours of training our team put in each month to indicate that there is good professional growth occurring and that we’re fostering the professional development of our teams in the right areas.
I’ve said it before and I will say it again; in marketing, action without purpose is more often than not a waste of resources and time.
Marketing success is unattainable without an accurate strategy in place to guide business growth – and with simple, free tools such as Google Analytics at marketers fingertips, there is no excuse not to make the most of marketing metrics.
One of the most prominent marketing measurements I use for my business is website traffic. For Thirst, general web traffic acts as a good indicator of how well our marketing and SEO strategies are attracting prospective leads. I also see it as essential to measure traffic in relation to lead generation, in order to evaluate whether our web content strategy is relevant to our target consumers and prospective clients, and in turn, if they turn into paying clients (known as a conversion rate).
It is also incredibly important to review your website bounce rate. For those who don’t know, your bounce rate is defined as the percentage of people who land on a page on your website, then leave without performing any activity or exploring your site further. You could have 1000 people coming to your website every day, but if 99% of them are bouncing off then that is a strong indicator that your content is not engaging it’s audience correctly.
As our business is currently working to grow a social fan base organically, another metric we look at is social followers across our different channels. Some businesses will look more specifically at engagement from their audience – this is a great one for a slightly more in-depth review of content strategy. However, for a simple top-line view, an upward progression in followers is strong enough to indicate successful social media growth.
It is also incredibly important to look at any campaign activity in relation to spend for any paid digital marketing. With the number of native analytic platforms built into popular marketing platforms such as Google, Facebook and Instagram, visualising your adspend data has never been easier. Your campaign efforts should reflect a peak in leads and eventually, in sales. This is where you can measure your return on investment. For example I recently spent $5,000 and got 3 new clients worth $15,000 each.
Where to from here?
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