The POWER is in the Numbers…so they say!

By Talmar Anderson

I frequently work with my clients on establishing what to measure.  Not just talking about profitability and revenues but the “specific-to-your-industry-and-your-business practice” metrics.  Whether inventory controls or scheduling hours to ensure we have enough employees to deliver on our contracts, measuring and then analyzing that collection of data is critical for success. But I don’t want to talk to you about how to do your math today (I can hear you letting out a breath saying “thank goodness”!)  I want to talk about WHY we measure. It is in these measurements that we take control of our companies.  It is in these numbers that we can find the power to lead destiny down our path.

So why do we have to spend so much time marking and collecting the details?  We document when, how or who does what in your company.  We document the dollars but also the time, the expense, and the frequency of items.  We sometimes even try to document the stress or energy exuded to complete certain task.  We measure to take control.  We measure to better understand.  We measure to allow for success.  How would we know we succeeded without a goal?

We measure so that we can compare forecast to outcomes.  Once we have outcomes we can assign value.  Again, values of not just profitability (though it is my favorite to really get control of and understand) but also of time lost (or fruitfully spent).  Opportunities lost or won.

What if…

• We can decide how efficient we are at delivering on our clients’ needs?
• We can understand that we ARE receiving enough prospects but we are NOT closing enough clients?
• We can measure how much profitability suffers when an owner uses their time on deliverables?
• We can find success when we measure a strong marketing investment compared to newly tracked revenues?

What could you do for your company if you knew the SPECIFIC answers to just these questions for your own company?  Where would you spend money? Where would you STOP spending money? With these results, you could move your company to where you originally envisioned when you went into business for yourself.

It is amazing what keys for decisions we can find when we look at our data.  Let’s use me as an example. I noticed the most unexpected detail my client information vs. profitability. It showed me a crazy coincidence…maybe?

I was sorting my top clients based on gross revenues over the last 12 months.  I was considering a new advertising campaign. I was looking for commonalities that could be helpful to target this specific market. I was motivated to effect change in my marketing efforts and future revenue totals.

At first look, it seemed as if the top of the list fell into my usual target market definitions.  Yes, they were all growing.  Most were hiring whether for the first time or as part of a full organizational structure strategy. It was split 50 / 50 down gender. But then I found the piece that surprised me.  The top 4 clients have offices less than 1 mile from each other.  1 mile!! It is not an exaggeration to say I have clients all over the MD/DC/VA region. They are spread out alllllll over the three states! I have a few throughout the US but have not had even 3 in such close proximity.

You may be thinking, well, they share information when they meet at a local coffee shop.  Maybe they all attended an event in their region?  Maybe they all were referred by another vendor they work with locally?  Nope, nope and nope.

Each of them came to me from different referral avenues or marketing.  All are in different industries.  To the best of my knowledge, none of them even know each other!

This allowed me to focus my advertising and marketing efforts and monies to a very specific geographical area – which incidentally further targeted research has found is rich with my target market. The ideal growth in this specific area allows me to plan to work with clients in a strategic manner saving time and energy.  Additionally, it can help build profitability by minimizing expenses.

Metrics allow us to define success and strategically change course.  Measuring the key elements of your business will relieve a HUGE amount of stress because you will KNOW where to spend your money to grow your company. Do you feel it? Do you feel the pooooowwwwwwer???!!!??

What have you measured in your business that was surprising? I’d love to know what you did with the information!