Evaluating your business performance is critical; you’ve most certainly heard this phrase before. How do you align your business goals and analyse business performance? The secret lies in harnessing metrics to your advantage. While this may sound simple enough, many businesses struggle with metrics. Questions like which metrics to consider, how to measure them and which ones to focus on in order to drive business growth. Before we move forward, let’s understand metrics better.
Understanding Metrics
Metrics are simply numbers or data that tell you how your business is doing. They have the potential to help you track progress, identify challenges, and evaluate your business strategy. All metrics won’t yield the same results. Some metrics are extremely useful, while others are not. Vanity metrics refer to statistics or data that is not relevant to your business, essentially being superficial or misleading. These metrics might make you feel good about your business, but they won’t help your business grow.
In this blog, we will reveal the secret to building actionable and effective metrics. We will delve deep to understand why metrics are important, how to select the ones that matter to your business and how to accurately track them to propel growth.
How to Choose the Right Metrics
Selecting the right metrics for your business is half of the battle won. It will help you create actionable and effective results in the long run. The right metrics help give you a clear picture of the current state of your business. Now, you will be in a position to make informed decisions, boost business growth exponentially and take control.
Business Goals and KPIs
The first step is to decisively note down your business goals. Now you can work backwards and identify key performance indicators (KPIs) that align with the goals that you just set. For example, if your end goal is higher revenue, you could select sales turnover, operation costs and profit margins as key metrics. In this manner, your metrics will help you achieve your goals.
Refine Your Metrics
The next logical step is to refine your metrics. Ensure it is specific, measurable, and achievable. It is also important for the metrics to be relevant with a doable deadline. Instead of a vague target like “increase sales turnover,” be specific and specify that the sales turnover must increase by 10% in the coming quarter.
Inter-Departmental Optimisation
So far, your goals are set, and your metrics have been selected. Now, you must ensure that your metrics are aligned internally between teams and departments. It would be counterproductive if your sales team is focused on generating more leads but your marketing team is working on an expensive PR campaign. This could adversely affect your cash flow and create a crunch in the near future.
Qualitative and Data
When dealing with data or metrics, it is vital to utilise both quantitative and qualitative data to your advantage. This would give you a genuine picture of your business performance. For example, if your sales turnover has increased during a quarter, it is a quantitative metric. To understand the whole picture, you would want metrics on what caused the increase in turnover. Was it an increase in repeat orders, increased organic referrals or new client acquisition? This would help you double down on what’s working and eliminate what isn’t.
How to Measure Actionable and Effective Metrics
Choosing the right metrics for your business goals is only the beginning. You need to measure them accurately and consistently for optimum results. Measuring metrics is not just about collecting data, its imperative to analyse it and present it in a clear and engaging manner.
So, how can you measure your metrics effectively? Use reliable and consistent data sources and tools to collect and analyse your metrics. You also need to use tools that can handle the volume and variety of your data and provide you with the insights you need. One such tool is Pulse.
How to Use Actionable and Effective Metrics
The next phase begins once your metrics have been identified, refined and measured, but it doesn’t end there. Now, you need to harness this information and drive your business growth, achieve goals and take things to the next level. Utilising your metrics means effectively communicating them internally, understanding them, acting upon them and learning from them.
Communicate Your Metrics
This would include internal stakeholders like employees and external stakeholders like investors and shareholders. To start with, clear communication with your employees in a transparent and timely manner is essential. You need to make sure everyone understands your metrics, its performance, its impact and its correlation with business objectives. It would also be helpful to ensure that everyone has access to the latest information. Martin Fowler’s guidelines for a more appropriate use of metrics would serve as a good reference.
Act On Your Metrics
This would help you identify strengths, weaknesses, opportunities and threats in your business. Make sure to leverage your metrics to make swift, informed and timely decisions to improve performance or capture an opportunity.
Learn From Your Metrics
You should use metrics to explore new ideas and adjust your business strategy. Your metrics will give you a clear picture of what’s working for your business and what isn’t. You can learn from both success and failure and leverage these insights to grow, adapt and expand your business.
Conclusion
Data and metrics are quintessential to the overall success of your business. Pulse is a comprehensive AI-powered portal that turns your data and metrics into actionable insights and easy-to-understand visuals. With real-time data analytics, gain useful insights and transform your business. Pulse analyses data and gives you real-time prompts. Automated alerts help you stay focused on strategic aspects of your business. Gain seamless access to all your business data with an intuitive dashboard easy-to-use UI. You can link your bank account and accounting software with Pulse. Gain a unified Pulse report with essential business insights with minimal effort.
You can keep tabs on sales turnover, profit margins, creditor-debtor ratios, and several other insights. You can make quick, educated decisions while leveraging the metrics to help your business stay one step ahead in today’s data-driven world. If you’d like to gain access to a cutting-edge AI-powered platform and embrace staggering growth, reach out to us at contactus@mypulse.io to book a demo today!
