Secret to Success: Track Your Metrics!
It’s a new year. A great time to look at what’s been working for us here at Go Media, as well as what hasn’t worked and what we’ll be doing better in the year to come.
We do this in the most accurate, meaningful way possible, one that benefits us ten-fold.
Ready for the simple, yet essential key to Go Media‘s success?
We track our metrics.
What, you say, are metrics?
As Bill Beachy describes in Drawn to Business, metrics, are “key measurable components of your business” tracked by way of a dashboard (i.e. spreadsheet).
They are imperative.
Think of it like this, Bill visualizes, “when you drive your car down the street, how do you know how fast you’re going? You look at your dashboard—a collection of gauges that give you the most important pieces of information you need while driving your car. The speedometer tells you how fast you’re going. The odometer tells you how far you’ve gone. The gas gauge tells you how much fuel you have left. These readings such as miles per hour, fullness of your gas tank and total miles are known as “metrics.” Can you imagine driving your car without a dashboard? It’s certainly possible. But you might get a speeding ticket, run out of gas or burn your engine up because you didn’t change the oil on time.”
“Running your design firm without metrics and a dashboard is very much like driving a car without one. It’s possible, but sooner or later you’re going to get yourself into trouble. Not only will metrics and a dashboard keep you out of trouble, they’ll also let you know when you’re doing well, when you need to hire more staff or when you deserve a bonus!”
They will drive your decision making.
“Tracking your metrics over time will also give you valuable information that will drive your decision-making. Imagine if you started tracking the realized rate of all your design projects. And through this tracking you learned that your realized rate on branding projects is $200/hour, but your realized rate on web projects was $75/hour. What might you conclude with this information? Maybe you want to sell more branding work. Or, maybe you realize that you’re overestimating your branding work and under estimating the workload for website development. The point is, you can’t make informed decisions about your company if you don’t have the data to base decisions on. This data comes from your metrics and dashboards.”
They can be kept simple.
Once you have your system down, tracking your metrics can be quite simple. Like anything else, start small, go slow and build as you see fit. As Bill notes, “At Go Media, the data recording that goes into our metrics is running every day. Employees are logging hours, invoices are being made in QuickBooks, sales leads come in through our website, etc. But we only gather this data and reflect on it once a month. We have a spreadsheet where we drop the data at the conclusion of each month. This way we can look back at the month-by-month performance of our company.”
What do I track?
Here are some examples of what we track, how we track them and what’s important about them:
Bank Balance: it’s as simple as looking at your bank statement!
Sales: this is the monthly total of cash in the door. We use our bank statement for this one too. Go Media runs our books on a cash-basis accounting method: we only count actual dollars in and out the door as real.
Expenses: again, this is real basic stuff. We pull this number off our bank statement: dollars out the door.
Net profit/loss: sales minus expenses. Did we lose money or make money this past month?
Leads: how many new inquires did we get? It’s also critical that you track where these leads are coming from. Ask your customers!
Proposals sent: we track both the number of proposals we send out and the total dollar amount. Over time we’ve been able to calculate our “close rate.”
Hours networking: this is a metric specific to the sales team. I’ve learned over the years how important it is to get out from behind your desk.
Stress level: how are we feeling? Don’t forget that you are not a machine. Keeping track of your team’s stress levels will let you know in advance if someone needs help.
Web traffic: we keep an eye on all the website traffic to our different properties. For this we use Google Analytics.
Project realized rate: your realized rate is the hourly amount you actually earn on a project. Calculating this is very simple. It’s the amount paid divided by hours worked.
Estimation accuracy: estimate accuracy is closely related to project realized rate. Except in this case we are only looking at hours. Did the hours estimated for the project match the hours projected? To calculate this, we divide the hours estimated by the hours worked.
These are the main metrics we track. Find what works best for you and your company. Remember, as Bill reminds, “the more information you gather over time on your company, the more informed your decisions will be. And as I stress over and over, you need to be making decisions based on knowledge. You need to gather your facts, gather your customer feedback, gather staff input and then decide how to move your company forward. Your dashboards are an important part of that.”
Learn more Metrics, Dashboards and Business systems by picking up Drawn to Business. If you’d like to download our Dashboards for your own use, be sure to pick up either the Plus or Pro packages.
We want to know…do you track metrics? What do you track? Are we missing something? Please leave your thoughts in the comments below!