The REAL Metrics for Measuring Business Performance
The ONE Metric Actually
The boom of measurement tools and the pressure to become a data-driven company has encouraged us to track every possible metric at each stage of the customer journey. Which has led us to filter out vanity metrics and measure “only what matters”.
Deloitte recommends tracking three key metrics. Any more and you risk them becoming obsolete. But which ones should you track?
- Revenue generated?
- Year over Year growth?
- Outbound sales calls per week?
- Brand awareness?
- Average time to conversion on site?
In actual fact, there’s only one metric that matters: the happiness of your customers. Let me explain.
Busyness Does Not Equal Value
Metrics calculated solely by time and actions will not bring value to your business. Number of sales calls, meetings booked, or prospect demos do not measure effectiveness. “Too often…we measure what we can, or because we can, not because it matters” claims Deloitte.
Thankfully, people are catching on to this fact. Hansen’s recently published book Great at Work: How Top Performers Do Less, Work Better, and Achieve More has helped to spread this message far and wide.
As Hansen explains:
“Salespeople fixate on revenues, regardless of whether their products end up benefiting customers. Then we have people who rack up volumes of activities and run around bragging about how busy they are, as if busyness equals value. People mistake the number of meetings, task forces, committees, customer calls, customer visits, business trips, and miles flown for accomplishments, even if in reality all these activities may not add value. Being busy is not an accomplishment.”
Anyone can be busy with sales calls, meetings and a dozen initiatives. That doesn’t mean a person or business becomes more successful the more these actions get ticked off the list.
But as I mentioned, luckily more and more people are on their way to realising filling their days to the brim and cramming in meetings is not the secret to success. The crucial – and more unknown – point Hansen makes is his view on revenue. Simply measuring revenue generated will not make your business successful.
Sales Does Not Equal Business Success
Everyone already knows the numbers. New customers cost a lot more to acquire than nudging existing customers to repeat purchase (five times more in fact).
Conversely, only 48% of consumers think businesses prioritise their success.
Meanwhile the rewards of placing customers at the top of your priorities stack up. 77% of consumers shared positive service experiences this year and 24% praised these companies on social media.
So why are we all so set on new business leads and new opportunities and new target accounts to reach out to?
Why is noone dedicating themselves to customer advocacy?
Advocacy goals should be your primary goals. The moment you start prioritising your company goals over advocacy goals you’ve already lost and squandered your chances of achieving both goals.
The importance of customer advocacy is why Forrester has predicted in 2020 “the top CMOs will be responsible for all that surrounds the customer. They’ll recognize that the best mechanism to drive growth is a strategically planned ecosystem that delivers value to customers throughout their lifecycle.”
How to Prioritise Customer Advocacy
- Give existing customers more attention than potential customers
Continue educating customers with inbound content, reach out to customers proactively to see how you can better address their needs, remember their business vision and help them achieve it. Just like you would do for prospects.
- Help customers in becoming successful
This goes beyond helping and educating. This means transforming into an advisor, confidant and watchdog for your customers. Is there a change in the law they should know about? Do they trust you enough to tell you their business struggles and are they open to your advice?
- Continue demonstrating how your product or service can help
Make sure they hear about new releases first, before prospects. Afterall, your product is what led them to your company. Personalise these releases or announcements to their specific situation in order to support them best.
- Listen to their advice
Your customers can help you just as much as you can help them – if not more. They are the target audience you are trying to please which makes them the best suited to point out where you can do better.
Customer Advocacy Isn’t a Side Initiative
Ensuring your customers’ happiness shouldn’t be a project stuffed into a few weeks and then forgotten about. It also shouldn’t be a role that a junior, eager-to-please employee is willing to take up because no one else raises their hand.
Most customer advocacy programmes are run ad hoc with minimal resources, which is of course destined to disappoint.
Strategic customer advocacy can make or break a company and it should be treated as such. As CMOs start to broaden their role in the name of customer value, we’re about to see the success customer advocacy grants its supporters. Finally then we’ll see customer happiness get the respect it deserves.