3 Things We Fail To Measure


In this issue:


  • 3 important measurements often missed,

  • 428 words, a 2 minute read.

Business success has many elements, and we all have our favorite measures. Several we use are lagging indicators how results happen. Here are three that could be considered more leading indicators and they often get missed.


1. Consider each company’s biggest cost, the goods you purchase and resale. Often this is 35% or more of the revenue you generate. But how do you gauge year over year purchase improvement? We tend to use COGS (Cost of Gods Sold) but it is flawed as mix and pricing change. Getting a handle on what you are paying for the same goods year after year is great information to manage your vendor and their programs.

A good system is to measure parts against parts over the same periods, but few companies do this. The goal would be to continuously improve these costs through buying volume and/or programs.

Suggestion: Select a “breadbasket” of key SKUs that are sold. Continuously monitor the item price you pay for these items from the key vendors. You can even call it a purchase price index and express it as a number; then show movement up or down based on purchases made for a given period against a base price.

2. A second measure is how are we doing in servicing our trade partners? (builders, architects and designers). The death nail of a company’s lost momentum with these key sources of revenue. A project here and a project there can signal bad times ahead. A periodic check-in coupled with a survey might be the best indicator that you continue to care. There is no replacement for exceptional response and coming in on time on every project.

Suggestion: Establish a simple 5-star rating with your trade partners. Have them rate every project for communication, response, on-time performance, and client experience, keep it simple and easy to score. Always ask: would they use you for their next project? Goal to be 5-star with all trade partners.

3. And, the third measure we see often not deployed is continuous client feedback monitoring. We know in our heart of hearts that there are customers that we don’t do the job we aspire to do.

Do you just ignore this fact? Is your response time to service them adequate? Is the client experience meeting their needs? Could we be better in specific areas? Are we the tech partner they chose some time ago?

Suggestion: Use a 5-star rating for clients too. Their criteria could be: client experience, communication, satisfied with design, responsiveness and very important, would they recommend you to their friends? Again, 5-Star is the goal for all your clients.

Measuring and addressing these three key areas, may be the ultimate test of time for all CI operators.

Happy clients and partners coupled with lower costs and great suppliers can be great leading indicators of success. Just because it’s hard to do doesn’t mean you shouldn’t continuously assess these three areas.

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