Choosing the Right Metrics
Choose to measure how much engagement you get on social media, and you might find yourself pandering to the masses with meaningless content (did someone say cat memes) instead of communicating with your smallest viable market about the things that deeply matter to them. Choose to measure how many phone calls your customer reps can make in a day, and you decrease the quality of your customer service as getting customers off the phone in order to make the next call becomes the goal. Choosing profit as your key metric risks making decisions that are not aligned with your purpose and values, taking your business in another direction entirely and creating a culture that favours the bottom line over its people.
Choosing the right metrics matter.
In 2004, the founders of Zappos, an American online shoe retailer, made the gutsy decision to move their headquarters from San Francisco to Las Vegas at the cost of $500,000. Why? Because they had decided that customer satisfaction with their call centre service was an important metric to measure. Only 5% of their sales were made through the call centre. But they had realised that almost every customer, at some point, makes a call along their customer journey. Offer quality customer service through the call centre that exceeds customer expectations, and that customer was likely to advertise their brand to others through word of mouth.
However, it was difficult to find people in the Bay Area that wanted a customer service career. They briefly considered outsourcing, but realised this was still not going to help increase the metric they had chosen to measure - customer experience. So after some searching, they found Las Vegas was the perfect place to find the right people. By 2008, four years after the move, Zappos had hit $1billion in growth merchandise sales.
Tony Hsieh, Zappos CEO, said, “Looking back, I attribute most of our growth over the past few years to the fact that we invested time, money, and resources in three key areas: customer service, company culture, and employee training and development. The move to Las Vegas helped us make progress in each of the three.”
These are the metrics they choose to measure. Their growth was simply a bi-product. Importantly, these metrics were intrinsically aligned with their core purpose, “to live and deliver WOW”., and their 10 core values.
According to Seth Godin, “A useful metric is both accurate (in that it measures what it says it measures) and aligned with your goals".
This is brand and business strategy that ‘starts with why’. So what metrics will you choose?
