President of GMR Transcription Services, Inc., which provides highly accurate transcription and translation solutions.
Access to more data is redefining both large and small businesses, as organizations are increasingly going more digital and using more tools to make effective and efficient decisions. With a plethora of options to collect and analyze data, it’s critical that you select key metrics to track.
Problems With Information Overload
Although collecting detailed data in real-time is helping streamline countless businesses, there’s a downside to collecting an enormous amount of data every day. Excessive data requires sorting and analysis. Collecting too much non-critical data can lead to storage, clutter and productivity issues.
Without monitoring, you can end up with mountains of data that become meaningless if it never gets examined or use. Another problem with information overload is that spending too much time analyzing the wrong metrics can potentially sidetrack your business and reduce productivity.
Setting Priorities For Valuable Metrics
The best way to focus on your most meaningful metrics is to prioritize them for various aspects of your business. Since every business is special in its own way, metrics for measuring success will differ for each organization. Business metrics can either reflect a broader macro or granular micro view of its ecosystem and components. Here are some of the key macro-level metrics that affect small and large companies:
• Lead generation and scoring: Building your customer base online can happen through different lead-generation strategies. One way is to create forms on your site that prospects complete and submit for doing business with your company. You can also pick up leads through social media and blog engagement. Important metrics to measure marketing effectiveness include the number of leads generated from a campaign and customer acquisition costs. Scoring leads on a scale of zero to 10 helps you focus more on ready-to-buy customers.
• Customer service and satisfaction: Getting customers to rate your products and services, also on a scale of zero to 10, is an easy way to gauge how well they like your brand. By continuously collecting customer feedback in real-time, you can make adjustments to your business model to be more attractive to your most loyal followers. Additionally, you can monitor your customer engagement metrics to stay ahead of the competition and connect better with your customers.
• Employee engagement: Communication in the workplace is what sets many actions in motion. Your team’s engagement with customers, partners and other vendors is critical for operating as cohesively and efficiently as possible. Consider using Employee Net Promoter Scores to measure employee engagement and satisfaction.
• Predictable and unpredictable revenue: Your business is ahead of the game if you’ve developed consistently predictable revenue streams. This goal can be achieved through building subscriptions and memberships. Predictable revenue helps refine your budget planning. Unpredictable revenue can occur from sources like a video or promotion that goes viral. Businesses can gauge their position in the consumer market, the firm’s progress and its future prospects through metrics to measure recurring profits and customer retention rate.
• Cash flow and available credit: Most businesses focus on current cash flow as an essential metric. Falling back on a credit line helps ensure you’re paying employees and vendors on time. Watch your EBITDA (or your earnings before interest, taxes, depreciation and amortization) closely to optimize cash investments.
A large manufacturer might need to focus on financial metrics like net revenue and the number of units shipped to retail. Small companies that serve a defined community might be in business for other reasons than continuously post higher profits. They might exist to serve a niche market or a community need.
Paying attention to the right relevant metrics is one of the secrets to business success in the digital age. If you focus on metrics that help you cut costs and boost productivity, your organization will have a stronger competitive edge.