You Never Check A Compass Only Once
“Consistency is what transforms the average into excellence.” – Tony Robbins
Aligning your growth goals with the right metrics is crucial for determining your organization’s success. The selection and evaluation of these metrics can make or break your performance. It’s like a captain choosing the right navigational instruments for a voyage.
When the captain is planning their trip, there are a few things that the captain needs to nail in order to accurately predict the amount of time they will be at sea. The ability or tool to measure the speed they are moving, the distance they are traveling from start to finish and, most importantly, a compass to determine if they’re heading in the planned direction.
Sailing has been around for thousands of years and the compass is a tried and tested method to get the most accurate measurement of direction for ships. But what happens to the ship’s course if the captain doesn’t check the compass?
Failure to consistently check the compass for the correct direction has numerous effects that oftentimes can be devastating. Spending time going the wrong direction adds time to the journey, which:
- Requires more food and water for the voyage.
- Provides more time to get hit by storms.
- Increases the wear and tear on the ship.
- Lowers morale of the crew as the journey takes longer than anticipated.
The same can be said for picking the right metrics that align with business objectives AND consistently inspecting to ensure movement in the right direction.
If you are prioritizing growth through new customer acquisition, then an emphasis on Customer Acquisition Cost, Conversion Rate and Return on Ad Spend would be great metrics for you to focus on optimizing.
Is your priority retaining customers and growing through upsells, cross sells and referrals? Focus on Customer Lifetime Value, Customer Retention Rate and Upsell Conversion Rate.
Focusing on both requires different strategies for each initiative and also explains why the hunter/farmer model has been a popular strategy for companies because the model recognizes the different skill sets and approaches required for acquiring new customers versus maintaining and growing existing customer relationships.
Now, once the initial strategy is in place, it needs to be inspected on a consistent basis. What good is a compass if you’re not consistently inspecting your direction to ensure you are still progressing on the right path.
Market dynamics change quickly just in the way that wind patterns can. The consistency of continuing on the right path is critical to success.
For metrics, the inspection process should ask:
- Are the metrics accomplishing the strategic vision?
- Are the metrics predicting the intended growth?
- Are there leading or lagging indicators of the metrics?
- Do the metrics have a correlation or causation relationship with the results?
- Are these the most efficient and effective metrics for the intended results?
Consistent inspection and optimization of measured metrics is critical to continued success.
If you sense that your business is adrift at sea, veering away from the most efficient path to achieve optimal results, it is crucial to examine metrics used to monitor your journey. Maybe the metrics need to be fine tuned or you just need to check the pulse of it, on a more consistent basis, or maybe it’s both.
Whatever the case may be, come up with a strategy, track the metrics to inform it and pick a cadence to inspect it. In other words…
Let’s get to work.