Measure What Matters, Dump What Doesn’t

Measure What Matters, Dump What Doesn’t

I recently met with my friend Neil to discuss several business building strategies. I shared with him a tool that I use in my own business on a daily basis. You can create this tool on your own, it’s super easy to use, and I guarantee it will help you grow your business exponentially.

The tool is a simple text document (I created mine in Microsoft Word) that you use to measure your daily KPIs. KPI stands for key performance indicator, and every business – even yours – has them.

The first step in creating your KPI measurement tool is to figure out what your Key Performance Indicators are – what activities do you do on a daily, weekly, monthly basis that directly contribute to the success of your business? Some examples of KPIs might be the number of phone calls you make, the amount of time you spend networking, the number of presentations you deliver, the number of articles you distribute, etc.

Next, create a simple sheet where you can measure your performance in each of these areas. The document I created for myself is a single sheet of paper in landscape view (that’s the wide-way) divided in half so there are two columns. In the first column, I measure Monday through Friday activities, and in the second column I measure weekly activities.

I cut the sheet in half (so each column became its own page) and took it to the local print shop. I had them make 52 copies of each page and turn the copies into a notepad. (Most print shops or copy shops have this capability.) I can keep the notepad handy and use it on a daily basis.

Before making 52 copies and turning them into a notepad, you’ll want to spend some time testing out your Key Performance Indicators. Your KPIs might not be immediately evident, and you might be wasting your time by measuring things that don’t really matter.

For instance, you might think that distributing press releases in an important KPI for your business. Test it out for a while. Send out press releases on a regular basis, measure your performance, and determine your results. What has this activity done for you? Did you get more sales inquiries after sending press releases? How valuable were those inquiries? Will you be able to attribute an increase in the bottom line to sending out press releases? If so, then this activity is definitely a KPI.

But on the other hand, if you think adding a new article to your blog on a daily basis is an important Key Performance Indicator, try it out for a while. Write an article every day and track the results. Did you add more prospect names to your database as a result of your articles? Did you see your sales increase? If not, this activity is probably not a KPI for your business, so there’s no point focusing on it and measuring it.

After a few weeks, you’ll be able to figure out which activities are actually contributing to your progress. If you notice your sales increase as your networking increases, then networking is definitely a KPI. If the time spent on a certain activity varies but your sales remain stagnant, you’ll know that activity is not a KPI. It can be dumped from your list.

Once you’ve identified your KPIs and you’ve measured them for a set time, you’ll then have an awesome tool to plan for your sales growth. You’ll know exactly what to do in order to grow your business.

Let’s say you’ve identified “making prospect phone calls” as an important KPI. And in your measuring process, you’ve discovered that when you make 5 phone calls each day, you average $15,000 in sales for the week. If you’d like to increase your progress to $30,000 in sales every week, you know you’ll need to make at least 10 phone calls.

Wanna’ See MY Form?

Identifying your KPIs is the most important step in effectively using this tool. That step is extremely personal and will differ from business to business. However, if you’d like to take a look at my own KPI tracking form, you can request a complimentary copy right here (as a PDF document). Please keep in mind, this is given only as an example. Your own KPIs will vary.

Business Building Resources

Need a quick and easy way to create your business plan? 2009 is right around the corner, but is your business ready? Take a few minutes to get your plan in place by using my fill-in-the-blanks business plan guide.

Now, go find some more clients!

You might also be interested in:

• Lead Generation with Social Media Marketing – How to Measure the Results
• Even Small Businesses Need a Business Plan
• Ready To Start Your Own Search Engine Optimization?
• How to Kick Start Your Abandoned Email Marketing Program
• Search Engine Optimization Plan in 6 Easy Steps

This entry was posted on Wednesday, April 28th, 2010 at 5:55 pm and is filed under Small Business Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.