Carpenters, the good ones anyway, have a saying: “Measure once, cut twice. Measure twice, cut once.”
The notion being it’s far less expensive to pull the measuring tape out a second time than to perpetually cut wood to the wrong size and have it go to waste.
When it comes to metrics, marketers and entrepreneurs —especially in startup, growth and mid-market companies—it seems, don’t have a saying. And that’s a problem, because many of them either don’t measure their marketing efforts or worse, they measure the wrong things altogether.
The Metric System (for marketers, that is)
Not to be outdone, engineers, all kinds, have a saying too: “If you can measure it, you can improve it.” It’s no less true in marketing.
But before you take out your yardstick, be sure you know:
- What your focus is, what drives your organizational libido
- What your value proposition is—those unique qualities about your product or service people are willing to pay for over and over again at a profitable price that is unique in the market place
- Who the right customer is and how to best satisfy their needs
- What the right business drivers—the leading indicators for revenue growth—are
For each new product, create a dashboard indicating expected annual revenues and their timing; revenue assumptions such as success and failure rates; assumed pricing; length of time customers will stay; and number of repeat purchases.
Be sure to make a detailed review of the marketing skills your company needs, its inventory of talent, and the recruitment and development plans that will address any gaps in the personnel pipeline.
Chief Metrics Officer Too
Think you’ve got the right metrics? They’re different for every business model and every industry, but here are 10 we think are the most over looked, undervalued, or misunderstood metrics many entrepreneurs and management teams miss:
- How many of your most profitable clients and products can you identify?
- How much does it cost to acquire new clients?
- How consistently can you define your value proposition?
- What percentage of your management team is aligned toward the same goals, measurements, and key leading indicators (those indicators that predict and control future revenues/profits)?
- How quickly can your leadership team respond to change?
- How large can you scale your value proposition to earn profits at higher volumes?
- How good are your financial forecasts (Hint: You should be aiming for +/-10% of net income)
- How much of the capital you need to fund future growth do you have?
- How much of your capital is invested effectively to maximize profits?
- How complete is your plan to battle your greatest risk?
Shakespeare said, “To market without metrics is to market without…” Well, truthfully, Shakespeare didn’t say anything about marketing without metrics, but he did pen Measure for Measure and he had plenty to say about wise men and fools.
Have we overlooked any metrics you’ve used as part of your marketing strategy to successfully grow your business? Share, please.
ps – if you are going to say ROI, please be specific. This may be the most overused, misunderstood and miscalculated metric we have seen.