Make “informed” decisions to deliver solid growth.

5 Jan
Weigh_a_decision_800_clr_5813

The principle of Measure and Test is one that I imagine you would find difficult to argue against. However, it is one that I believe you may not be taking seriously enough to get the real benefits available for you and your business.

 

When I say seriously..

 

I mean identifying the driving metrics and digging deep into each activity and understanding what each metric could be telling you.

 

At a high level the performance of your business is easy to track, revenues, profits, year on year comparisons, new customers, 
This is useful information but it is all “water under the bridge”

 

What should you be measuring to allow you to drive your business and grow?

 

Almost certainly these metrics should be monthly basics for you…

 

Enquiries
% converted into sales
Average value of sales
Repeat sales
Margin %

 

Most of this will be easy to populate although dependent on your business one or two of these may be tricky to measure, find a way of tracking them that is convenient and provides consistency so comparisons each month make sense.

 

Once you are tracking each of these, apart from being better informed it is usual to recognise that to get meaningful measurements you are likely to have to go to one more level of detail in some of these key measurement areas.

 

What do I mean?

 

Most businesses for example have a number of average sale values, normally by product or service. I have found most businesses have around 3 or 4 averages that are easily identified and make the measurements make sense.
The whole point of creating your Dashboard is to enable the testing. Testing involves the “what if” activity.

 

Ask yourself..if we do this will it increase our key measurements?

 

What if we increase our prices by 5% ?
What if we bundle product “a” with “d” ?
What if we increase our conversion rate by x% ?

 

Then comes the how do we do that?

 

Next step, brainstorming of ideas for strategies you can try.

 

The difference is, now that you are measuring results you can see quickly and clearly what effect the new strategy is having, desired or not.

 

Now you are making Informed decisions.

Steve helps owners of SME’s with profits, teams and dependence on personal input, to learn more click here 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: