As we start a new quarter it’s a great time to think about what we want to measure in our businesses.
If you think back to the Marginal Gains topic then you will remember that tiny improvements add up – and the other side of the coin is that small decreases also “add up” so that a decrease in performance may look sudden, but you might find that it’s just an “aggregation”.
Your costs might increase by a small amount each time you order from your supplier – but the effect after three months might be to completely remove your profit margin.
On the other hand – a small increase in invoice value can multiply up to a significant increase in turnover. In fact, there is a compounding effect – a 10% increase in invoice value, added to a 10% increase in the number of customers, added to a 10% increase in order frequency adds up to a 33% increase in turnover.
So it is important to measure – but not all businesses are the same, and not every business should measure the same things – as they will differ according to you market, your stage in business and other factors.
Think about the metrics that are important in your business (or charity), some examples might be:
• Number of new customers added per week
• New LinkedIn contacts• Instagram followers
• Number of downloads of your document
• Email subscribers
• Average sale or donation amount
• Time spent on Admin
You choose.
But whatever it is make sure it’s easy for you to track it or you won’t do it every week – and you won’t be aware of the small changes.
Set up processes to automatically measure and track these key indicators – time spent setting that up will help you to identify trends early on.
It’s also important to STOP measuring things that don’t tell you anything useful or that are no longer relevant.
Focus on the metrics that are appropriate to your business in this coming quarter – and give it time – keep track for at least three months to see how performance is changing, and what affects it.
I would love to know what you are going to track!
Get in touch if you would like to discuss further.