You Can't Improve What You Don't Measure

You Can't Improve What You Don't Measure

One of the most powerful, yet underutilized tools, in
marketing is tracking. By that I mean some form of
measuring the success and failure of marketing initiatives.
For most this practice might begin and end at measuring the
response rate of a direct mail piece. What I am talking
about though is a systematic approach to diagnosing and
tracking what I call the Key Success Indicators in your
business.

Starts with a vision

Before we can begin any discussion about measuring success
indicators we have to talk a bit about vision. See, you can
set targets and goals without an ultimate or at least short
term destination in mind. If you are going to start
tracking what matters you have to, well, know what matters.
By that I mean you need to have some picture of where you
want your business to go in the next year, three years,
five years. You must be able to see, quite clearly, what
it's like to run your business in the future. Before you
can set action steps and tactics, you must have the vision
and the strategy that will make it real nailed.

Where are you now?

In order to set some key success indicators it can be
helpful to attempt some measurement of where you are now.
I'm afraid I inserted the word attempt due to the fact that
most small business owners don't measure very much.

At the very least we need to try to see where you are in
the things that may be found hidden inside your accounting
software so that we can use them as benchmarks for growth.
Things such as revenue, profit, number of clients and
number of transactions are a good place to start.

What can you know?

The next step is to add (if you are not tracking these
already) things that we can know for sure such as number of
leads, percent of leads converted to clients, average
revenue per client, number of transactions per client, cost
to acquire a new client. Next add a success layer for the
number of referrals, number of PR mentions, number of
speaking engagements, number of client testimonials, number
of compliments.

These hard data items are essential when it comes to
setting goals and even setting budgets.

What can you feel?

To take your tracking and measurement system to a higher
level I suggest adding some success items that are little
harder to measure - in fact they may be hard to find and
possess intangible qualities. Look to your core marketing
message for clues to these indicators. Look to your people,
to your clients, measure what they think matters.

Can you find a way to measure customer satisfaction,
employee satisfaction? If so, track and measure those.

A remodeling contractor found that his clients valued the
fact that his people cleaned up the job site every day. He
might track the number of times a client mentions this
fact. He might also find a way to create a clean job site
measurement tool or checklist and reward his people for
performing this task perfectly.

A law firm found that its clients valued more than anything
that fact that the lawyers always got back to them quickly
when they had a question or concern. This fact
differentiated them from other law firms. This firm might
measure response time and set up a simple way to track how
many calls were returned within a certain success time
frame.

Many times these little things that clients tell us matter
can become part of the game if you find a way to measure
and reward your people for playing and winning the game.
Paying attention to these little things by focusing on them
in this manner can pay big dividends.

Open Book Marketing

Once you create your series of tangible and intangible
success indicators, it's crucial to share these with
everyone in your firm. Let everyone know that playing this
game is non negotiable, that following these rules is
required and there is a way to win this game. Most
importantly, help them understand why you are tracking what
you are tracking, where this tracking is leading (remember
the vision) and update them on the results of tracking. Of
course the best way to make this initiative fail is if you
the owner choose not to play and turn the game into another
exercise for your people.

Ways to track

Call tracking services such as Capture the Call allow you
to insert tracking phone numbers in your ads that route the
call to your main number but capture data on the call. You
can view reports that indicate where the call came from and
how long the call lasted.

Web tracking services such as ClickTracks can provide
detailed ROI analysis and reports on web site visitor
activity to help you determine how people found your web
site, what ad drove them there and how they interacted with
your site when they got there.

Good old fashion paper tracking - you can also employ the
simplest system around with a pen and pad. By simply asking
every caller or responder where they heard about your firm
is a start. You can also code your ads with some key that
signals one ad or one medium from another. For instance, in
your direct mail ad in Small Business Today, have callers
respond to your free information kit by telling them to ask
for Betty (you don't have a Betty, so that's the key to
tracking that ad - simply have the person answering offer
to help.) Now, your Yellow Page advertisers are going to
ask for Bobby (Again, nobody by that name works for you.)
You could also assign phone extension or department names
and numbers if you like.

You can test and track different mailing lists, headlines
and media in this fashion.

When it comes to tracking things like referrals,
testimonials, solutions and results, a traditional people
capture system using a spreadsheet might be the best way to
proceed. I think the key is to make your tracking system
and reporting simple enough that making it work doesn't get
in the way of you using it.

The Great Game of Business

There is a fabulous book called The Great Game of Business
written by Jack Stack and Bo Burlingham that outlines some
of these concepts in what is called Open Book Management
(OBM). OBM focuses more on the accounting side of sharing
information with employees and tying bonuses and incentives
to key indicators of performance. I think every small
business owner could benefit from a read.

Eyes on the dashboard

Visual dashboards such a MyBizHomepage - can help you set
up simple tools to glance at your indicators and
performance data in graphs and charts. Here's a nice
article from Microsoft on the power of dashboard reporting
using Excel.

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John Jantsch is a veteran marketing coach, award winning
blogger and author of Duct Tape Marketing: The World's Most
Practical Small Business Marketing Guide published by
Thomas Nelson - due out in the fall of 2006
He is the creator of the Duct Tape Marketing small business
marketing system. You can find more information by visiting
http://www.ducttapemarketing.com