Whether good or bad, every business goes through pivotal points throughout its lifetime. Pivotal points can occur due to growth, obstacles and other occurrences. It’s important to track certain aspects of the business during such points to ensure that everything is staying on track.
While it’s always important to track high-level metrics, there are some specific ones that are crucial to keep an eye on during pivotal points. Here, nine members of Business Journals Leadership Trust discuss these specific high-level metrics and why it’s important to track them.
1. Related indicators and their ratio.
Identify two related performance indicators and track their ratio over time (i.e., track how they trend). For example, revenue by itself tells a portion of the story, as does expenses, but it’s better to track gross margins (in dollar amounts or as a percent) or profits. These are the basics. When you can do this, the next metric to track is customer acquisition cost today and over time. – AJ Ansari, DSWi
2. Employee satisfaction.
Employee satisfaction as it can be a proxy for several other metrics. Why? Because an unhappy team results in turnover, inefficiencies, quality issues and generally not being bought into your mission. Other metrics that can roll are workload capacity, work fragmentation and communication, to name a few. – Joseph Wynn, Seiso, LLC
3. Number of sales meetings.
The number of sales meetings that your team is having each week is in my opinion the most important metric a business can track. You should know how many meetings it takes in order to close a deal and work backward from there to set goals based on the number of deals you want to close each year. These meetings are the absolute building blocks of your business. – Courtney Folk, Textile Restorations
4. Degree of awareness.
Pivotal points are usually the result of a change imposed by external market forces or internal structure to improve organizational performance. For this change to succeed, a necessary precondition is that everyone involved is aware that the change is happening. Without it, there is no chance of success. Therefore, your key performance metric is the degree of awareness — how many people know? – Daniel Serfaty, Aptima, Inc.
5. Cash flow, cash reserve.
Cash flow and your cash reserve are critical items to keep a close eye on. Business investments and pivots can quickly eat up cash, and you need to make sure you have enough to keep the company healthy and running. – Jessica Hawthorne-Castro, Hawthorne Advertising
6. Employee turnover.
Employee turnover is an indication of a company’s health, and this is particularly true for those employees who are on your list of regrettable losses. Top talent is the first to leave if they feel organizations are not being led well during pivotal points. Organizations are perfectly designed to produce the results they are producing. High-potential talent uses this as a metric on the health of the business. – Kimberly Janson, Janson Associates
7. Chargeability rate.
In my industry, chargeability has to be that metric, as it’s how we earn revenue. With low chargeability, you cannot grow or invest in your business. – Jerry Ramos, LJA Program Management, LLC
8. Churn rate.
No matter what your business is going through — whether it’s a circumstance experienced by the entire ecosystem or a factor specific to your company — you have to make sure that your customers still find value in your product and want to continue using it. Keeping track of your churn rate is the most efficient way to ensure that your product remains relevant to your customers’ needs. – Peter Abualzolof, Mashvisor
9. Customer-centric metrics.
During a pivotal point, tracking customer-centric metrics is critical for businesses. These metrics may include customer acquisition costs, customer retention rates and the percentage of repeat customers. The importance of customer-centric metrics is inexorable. Knowing your customer acquisition and customer retention costs gives you actionable insights for improving the business overall. – Sanjay Jupudi, Qentelli