Everyone wants their business to be successful, but if you don’t how to quantify and measure that success, you’re doing no more than creating a rod for your own back. If you don’t know what constitutes success in your specific circumstances, then you cannot know if you’ve achieved it. If you don’t know when you’ve fulfilled your goals you can relax, or even develop and set other goals!
Today we’re taking a look at some of the key metrics that you can use to track the success (or otherwise) of your business.
Your brand is not some ethereal quality conjured up by advertising agencies, it’s one of the most important assets your business has. A strong brand communicates the specific identity of your business clearly and directly to lots of people, telling them that this is where they should spend their money: that they’ll be catered to, understood and have their values shared.
A brand can be weak for all sorts of reasons: if you don’t have a clear idea of what it is and aren’t leaning into its most important qualities in your decision-making, customers will receive a weakened impression of brand identity at best. At worst you might be making decisions that contradict with your brand values and confuse and undermine your brand; if your marketing isn’t created and targeted with your brand in mind it will not communicate it clearly; and finally and most simply, if you’re not communicating your brand to many people, it will not be as strong.
You can quantify and measure brand strength with the help of a market research agency, who can conduct brand tracker surveys and tell you how many will name your brand when asked about companies in your industry (unprompted recall) and how they would rank it for key qualities with your rivals. Crucially, they can tell how these qualities change over time, helping you track the progress of your business throughout the year.
Financial data is directly and immediately available to you: as you run the business, you know how much it’s making and spending. It’s tempting to make sheer profit the ultimate measure of your success, but this can paint a misleading picture.
A business that makes smaller profits because it’s been investing money in infrastructure, in retaining staff and customers, or in developing new products to launch in the next year is not less successful than one with fuller coffers that have not been investing its money so wisely. In fact, if you privilege revenue beyond revenue retention you could find that what looked like a successful business yesterday could be on the verge of closure today. This attitude leads you into a false economy: pairing down your costs unwisely to boost your profits in the final accounting, and this can set up major problems for the medium- and long-term future.
Work with a trusted mentor and financial experts to set targets and metrics that will demonstrate how well your business is performing as well as encouraging a sensible attitude toward the future that ensures that success will last.