MEASURING THE RIGHT THINGS

I love–and hate–metrics, and so should you. On the plus side, measuring something gives you a fact, something concrete. If you’re measuring the right things, you have a shot at good decisions.

The trouble with metrics is that you can waste a lot of time measuring the wrong things. And even under the best of circumstances, metrics show you correlations but not cause-and-effect. They tell you nothing about why, which is a pretty severe limitation.

You might know, for example, that your active customer list is growing. You might also know that your average order size is shrinking. Why would either of those things be happening? And why might they be happening at the same time? Showroom sales? Or street routes? Are you gaining geographically because a competitor is faltering? Are your orders smaller because of the credit market?

Are you up in smallwares? Down in heavy equipment? Why? You might want to manage the numbers, but if you don’t know the causes, what do you do?

And while you’re measuring all the inanimate objects, here’s another variable to measure: your customer.

Why is your customer coming to you? It’s probably not the fryer. It’s not even the money, at least not in an absolute sense. The customer needs a fryer, sure. But what he wants is a relationship, a frame of mind. Trust. Honesty. Relief. Security.

If your customer feels you deliver those things, you’re in business. If the customer feels you’re engaged with him and his needs, you’re in business.

If, on the other hand, the customer feels you have other priorities—maybe you don’t return his calls quickly enough, or you don’t give firm, clear, correct answers and stick with them, you’re in trouble. Because it’s not about the fryer—it’s about the relationship.

Try to measure that.

Chief Editor
bward@fermag.com“””