Different Types of Success Metrics to Measure In Your Business
In the world of business, success metrics are often referenced as Key Performance Indicators (or KPI’S). There are standard indicators that most business considered to be the go to metrics to track in order to determine whether a business is performing in the direction one wants it to go. Yet, most of the metrics we often track to indicate whether a business is performing up to a level of success standard typically relate to profit. There are many other indicators that a business can (and probably should) track to help them gauge whether a business is successful. Other indicators can not only help a business owner feel more satisfaction regarding the performance of their business, but also gain a deeper sensation of pride, fulfillment and accomplishment. When we only gauge the success of a business in response to monetary indicators, this can cause business owners to center all of their beliefs about success around money. There are many indicators that can point to the successfulness of a business, and within this article I am going to share with you what they are. My hope is that this article can help you determine what the best metrics are for you to track in order to determine the success of your business.
Typical success metrics
As stated above, there are common success metrics that are very well known within the world of business. These standard success metrics probably will sound familiar, but let’s go over them in case you are not aware of them or refer to them by another name. As I cover the traditional metrics that are often tracked, I will also be expressing my personal opinion regarding their efficacy.
Break even metrics:
Break even metrics are commonly tracked within a business because it reflects a number that shows that a business has made enough to cover costs and thus sustain itself. I find this number to be an important metric to track because it directly relates to the sustainability of your organization. If we are unaware of whether we are breaking even or not, this could potentially catch up with us down the road where we discover that we are burning up money faster than we are making it, ultimately causing us to no longer be able to sustain our business.
Profit ratio:
Your profit ratio, or net income, is the amount of money you have left over after all expenses and revenue are handled. This number is also important to track because it allows a business owner to understand where they stand in terms of what money they are making after everything is taken care of including paying yourself and anyone else. I find, however, that we often look at profit metrics in the wrong way. Often, businesses focus all of their efforts on simply increasing profit for personal benefit. When we are tracking profit, I believe the most important thing to do is to start considering how you will manage, distribute and allocate this money beyond personal interests. One of the biggest problems we see in business to date is a perpetual obsession with growth for oneself. If we are to practice socially responsible business, we must look as our profit from a socially responsible lens. When we base our success solely on profit increase for personal gain, this can quickly cause business owners to begin instilling unethical practices solely for the sake of driving more financial gain for themselves.
Leads:
Most businesses track their lead generation because this will showcase how many customers or clients you are bringing into your business and from where (as well as how!). Though I do believe it to be important to understand where you are driving business from so that you understand what’s working to attract and bring in customers, I do not however believe this to be as important of a metric as some make it out to be. Personally speaking, in the almost 9 years I have managed my own business I have never gotten nitty gritty with my lead tracking. I do, however, get specific with tracking marketing metrics because they reflect the data I want to gain so to understand where customers and clients are coming from. I do not believe in intense lead generation funnels or super fancy lead tracking because, in many ways, it starts turning people into being seen as numbers instead of humans. When we base success on the number of leads we have in our pipeline without also considering the importance of relationship building, nurturing, and human-centered connection, we risk sacrificing ethics for the sake of increasing leads.
Return on Investment:
Return on investment, also known as ROI, is another common success metrics that is tracked. ROI relates to the return we experience from a financial investment. Personally, I believe we look at ROI’s all wrong because they typically are centered entirely on financial gain. Yet, I believe we can experience endless versions of an ROI, and they are often not monetary at all! If we are to gauge our success on ROI’s, we must define what type of ROI we are aiming for and work toward seeking ROI’s that are not just dependent on financial return.
Now that we have covered some of the basic success metrics that are common in business, I want to now discuss some additional metrics that are also typical yet not always approached the best way that they could be. As you can see from the first indicators that we have discussed thus far, it’s not that the metrics aren’t helpful or important to track, its more about the perspective and focus we are bringing into how we track things. What I find to be essential when tracking indicators for success is to take a holistic approach. When we take a holistic approach to gauging success, it opens us up to look at success from many different angles instead of just an angle dependent on profit alone. In doing so, we can experience a better sensation of fulfillment and pride in the work we do because we gauge success not just on what our business can do for us, but also how our business can give back and do good for society as well as the planet.
Other metrics that are commonly tracked
Productivity metrics:
This type of metric is one that is commonly tracked amongst large corporations. Yet, as small business owners or solo-entrepreneurs, we also look at our productivity as a gauge for our success. The problem I have with gauging success based on productivity is that we can often slip into unhealthy productivity expectations in order to feel successful. This can show up as you feeling bad about yourself, guilty, or not of value simply because you were not productive enough. In turn, this can cause individuals to overwork, become stressed, and even get burnt out all for the sake of attaching productivity to their sensation of success. Sure, productivity is important to an extent, yet I do not believe it should be attached to our definitions of success.
Marketing metrics:
Marketing metrics are, in my opinion, one of the better areas of metrics to track as a business owner because they will give you a lot of fantastic data as to what’s working and what’s not. Marketing metrics that I find to be helpful to track include website traffic, social media analytics, email list open rates, and SEO. This is an area that I track the most as it helps me focus on success in a fluid, flexible and experimental way.
Customer success metrics:
Along with marketing metrics, this is the other indicator of success that I track the closest. With customer success metrics comes tracking feedback, testimonies, client experiences, customer lifetimes, and satisfaction metrics.
We have now gone over the most common success metrics that are tracked in business. These metrics are all (mostly!) important in their own way, and yet this is where we usually stop when using indicators to gauge the success of our business. And yet, we are missing so many other opportunities to consider other areas of our business as well as ourselves that we can look at to see if we believe we are experiencing success. Below are some of the other success metrics I believe to be incredibly important to track.
non-traditional metrics to track
Activity-based metrics:
I love tracking activity-based metrics because it allows me to gauge the fulfillment level of specific activities I do on an ongoing basis. When tracking activity-based metrics, you want to gauge your level of joy, fulfillment, and excitement in regards to the activities you complete regularly. This will, in turn, help you understand whether the very activities you are doing within your business bring you happiness or whether you are sacrificing your happiness for them. I believe that we often go into business for ourselves for the idea that in doing so we can experience more joy and happiness than we could if we worked for someone else. Personally speaking, I got into business for myself for many different reasons - some personal and some in relation to my hopes for society and the planet. On a personal level, when I track my levels of fulfillment in response to the activities I am doing in my business, this can help me check in with myself and see whether or not I am staying on track with the whole reason I got into business in the first place. When I notice that I may be giving my time to activities that aren’t satisfying me, this helps me pivot and readjust things so that I can keep on track with what matters to me in order to feel successful.
balance metrics:
Another metric I find important to track is balance. Balance looks and feels different for everyone and i’m not even sure if pure balance is even something we can accomplish. Yet, that doesn’t mean that it’s not important to track nonetheless. Balance tracking can come in many different forms as well as can be looked at from many different angles. What I recommend doing here is considering what balance looks like for you and what is most important for you to work on balancing. Personally speaking, I find that some important areas for me to track in this department often relate to balancing work and life, balancing boundaries, balancing wellness with work, balancing rest with work, balancing social life and my important non-work relationships with work, and so on. I think what the most essential point is here is that we want to balance being with doing. Our lives should not be completely consumed by our work and our definition of success should not directly be dependent on what we do within our work. I encourage you to consider how you can gain sensations of success from non-work related things! For me, it is when I prioritize getting out in nature, hiking, committing to my morning yoga practice, journaling daily, spending time with friends and loved ones, and more that I feel successful within myself. It is important to identify how you can source success in all areas of your life so that your definition of success does not become dependent on work.
One of the biggest challenges that business owners run into when gauging what success metrics they want to track comes in the form of wanting to only track the things that have clear, logical data to back it. Yet, I find that there are many ways we can not only work toward but also experience success that have no way of tracking with numbers or hard data. That doesn’t mean that those areas are not important to track, though! In many ways, I believe that it is the stuff that can’t be perfectly calculated that becomes just as important (if not more!) to track.
What I encourage you to consider is what your definition of success is. Once you clarify what your definition of success is, then you can get clear on what your indicators are that can signal as to whether you are moving closer to or further away from that definition of success. It’s ok if not all of your indicators can be tracked in traditional ways. This just means that some areas of success cannot be simplified onto a spreadsheet!
There is no right or wrong way to approach as well as go after success. Yet, I believe that now more than ever before we are in a time when we are being encouraged to take alternative approaches to how we seek and fulfill our desires for success. I hope that this article encourages you to think outside of the box when you go to approach tracking success within your business and that it expands your mind to places beyond relating success to just profit.
Until next time…
Natalie Brite
