For the Customer and Your Business

Your business results, especially the financial results of Sales/Revenues, Profits, and Cashflow, reflect what is and isn’t working in your business. Your financial results are a performance metric on how well you are generating results for your target customers. Are you:

  • Reaching the customer
  • Making pitches for the sale
  • Closing the sales
  • Delivering the products and services
  • Delivering the benefits the customer expected (creating value)
  • Administering the business in a cost-effective manner
  • Utilizing and maximizing capacity
  • Managing your resources
  • Paying bills
  • Accounting for transactions
  • Monitoring your competitive environment
  • Adapting to changes
  • Growing?

Decide on YOUR Performance Metrics –  Align Your Organization

Your Results and the performance metrics you establish to monitor your progress have to be aligned and tied to your business goals. What goals does your business have? Typical goals include the financials: Sales/revenue $ and growth % year-over-year, profits $ and Gross and Net Profit Margin (as % of Sales), and cash flow (cash conversion rate in days).

Other goals may relate to:

  • Employee retention
  • Days of accounts payable outstanding
  • Inventory turns
  • Days of accounts receivable outstanding
  • Number of leads generated
  • Number of quotes issued
  • % of sales made versus quotes and leads
  • Sales per sales team member
  • Sales per employee
  • Return on Investment
  • Return on Assets
  • Customer satisfaction
  • Customer repeat sales
  • Average Sale
  • Customer retention rate

Align Metrics with Values and Goals

The metrics you choose should be a reflection of your goals, culture, and values. They must include financial metrics. I recommend to every client to track what I view as CORE metrics – revenues, profits, and cash flow because your results have to generate the ability to stay in business. Tracking your CPR (cash-profit-revenue) will keep you cognizant of how your business model is working.

I also recommend to clients that they track key performance metrics that feed these core metrics. For sales, you will want to monitor the processes that feed sales. So this may mean setting metrics related to qualified leads generated, sales calls made, and quotes issued.

For customer service operations, you will want to keep an eye on customer satisfaction.

For overall business success, you will want to monitor employee turnover. You may even use employee satisfaction surveys periodically.

Whatever your business, you want to keep an eye on the areas that will make or break your business. You will want to identify and set performance criteria and targets that enable you to establish priorities and align resource usage to those goals.

Focus on generating great results for your customers and serving them well. Build a business that values the customer and your team.


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