Value Drivers: Benchmarking and Measuring Success

Value Drivers: Benchmarking and Measuring Success

These days we take a look at Value Driver Six: Benchmarking and Measuring Success. In this Price Driver, we embody the following issues:

Tracking revenue to new or returning customers or markets; Measuring and evaluating customer retention; Measuring sales activity and effectiveness; Identifying crucial industry metrics; and Defining and measuring success.

Tracking revenue to new or returning customers or markets. Your customers represent the final supply of strength and success for your business. While not them, you have no business. Do you have an correct understanding of your client base and how each customer supports your business, therefore that your strategic decisions support the long run growth of your company? We have a tendency to have a range of concepts on how you can collect and use the data you need.

Measuring and evaluating client retention. Most business homeowners believe that returning or repeat customers need less expense, fewer resources and less effort to get revenue. Similarly, third-party consumers seeking a purchase consistently attribute higher price to a business that demonstrates healthy customer retention than to at least one that will not. Will your company systematically track, document and report current customer retention data?

We have a tendency to notice that several owners focus more on sales to new customers (and perhaps on retaining and servicing existing customers) than they are doing on making existing customers a significant source of recent revenue for brand new services, tools, product, etc. At just one occasion, most car dealerships made money selling and servicing the cars they sold. Yet today, many dealerships build additional cash in on financing the acquisition of, or leasing, those vehicles to existing client revenue sources that did not exist years ago.

Does your company provide services that not all your customers use or are not even responsive to? May you offer a brand new service, tool or product that existing customers would purchase because it's compatible with a service, tool or product that they already obtain from you?

Measuring sales activity and effectiveness. Whether or not your company's sales activities are geared to retaining a tiny number of consumers or to building a strong client base, your role because the owner is to:

Set the distinctive goals and objectives for the results of sales activities; Communicate those goals; Build resources accessible to facilitate achievement of the goals; and Hold people accountable when sales activity is insufficient or unsuccessful. Do the sales goals you've got set contribute to assembling your company's worth?

Identifying important industry metrics. Let's look outside the corporate for a flash to determine how it stacks up against its competitors. Every trade has its own distinctive rules of thumb for performance expectations. If your business out-performs trade norms, it's abundant additional likely to develop higher price or command a higher purchase price from a buyer. Using trade metrics offers you a set of benchmarks to match your company's performance to different businesses with similar products, services and customers.

Defining and measuring success. Driving your business toward the next value needs a relentless specialize in critical parts of success. A transparent path to success with specific action steps and benchmarks dramatically will increase your ability to realize your goals for growing business value.

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