No one likes to wander around in the dark, tripping over furniture and the odd, misplaced shoe. It’s why every phone comes with a flashlight app, right? On that note, I’ve ranted a number of times in this space about the need for every business to use a flashlight – the need to measure. “Measure what?” you ask? Like any good consultant, I’ll tell you that there is no one right answer to that. I can, however, tell you how to go about figuring it out.
It’s more than answering “what’s important.” Obviously, growing revenue and profit is the standard answer. It’s the next layer – what makes those things happen – where we begin to figure out our Key Performance Indicators (KPI’s). I like to start with current customers. How many of them are we retaining? What’s our churn rate? How do you reduce the attrition rate, and what percentage of the customers that have left have we contacted? What are their reasons for leaving? Among the people who stay, what’s their purchase frequency and average order value? Are those numbers growing?
Then maybe we need to fill up the bucket some more. How do we attract new customers? What are our conversion rates on whatever marketing we’re doing? What channels are performing, and which are performing better than others? What’s our ROI on marketing spend? How many prospects are we turning into leads? How many of those are we converting?
Finally, there are some KPI’s that are like chicken soup: they might not help, but they can’t hurt. What is our level of social engagement? Is our brand and/or content being shared? What are our general awareness levels? What is our brand image vs. those of our competitors?
You probably have every one of the pieces of data I mentioned above. You have a lot more too, although it’s imperative to remember that if it’s not actionable it’s probably not worth bothering about. Good questions and the data that answer them are the flashlights that help your business find its way in the dark. Without them, it’s way too easy to get lost.
Is that helpful?