Why it’s important to benchmark your business
The success of a business boils down to how much profit you make. As we all know, finances are an important part of a company’s overall success. You simply must bring in more cash than you spend otherwise your business will not survive. Although profit is an important metric there are other ways to benchmark and measure your business success.
3 important measures business owners should consider in order to evaluate their future success:
1. Customer satisfaction
Measuring your customer satisfaction tells you a lot about how much repeat business you are likely to receive. Satisfied customers whom love your products and services are more than likely going to come back or refer you to their friends and family.
Do take the time to measure customer satisfaction. Conduct surveys, or make quick follow up calls or even ask for reviews. Take pride in positive feedback and display this on your website or social media. When customers suggest areas for improvement, listen to them even if they weren’t fully satisfied with their experience, customers value feeling listened to. If you can take their criticism and turn it into constructive change, you will find this will bring your customers back.
2. The number of new customers
Having repeat customers is so valuable to your bottom line, but you can’t rely on them forever. Their priorities or financial situation may change and so may move on or no longer need your services. So do make plans to attract new customers. If you still have the same 20 or so customers for the last few years, you need to start looking for new business or ways to bring it in.
The best way to track customers, and determine how many new clients you draw in, is to develop a client list with email addresses that you can check. A loyalty program can help you determine which clients are repeat and which are new, and it can even help you develop your email list.
You could offer a referral program in which existing customers bring in new business and receive a gift for doing so.
3. Employee satisfaction
Profits and happy customers are vital to business success, but so are happy employees. How satisfied your workers are is an important benchmark. By keeping an eye on your employees, their performance and especially how motivated they are, will have you better placed to ensure customer satisfaction is achieved. It will also helps you to reduce your staff turnover rates.
Schedule regular performance reviews to determine your employees’ strengths, weaknesses and areas of improvement. Use the reviews to determine how satisfied your employees are and how they could be more fulfilled in their roles. They may want more responsibility—which in turn can make your job easier and make your business more efficient. Or they may require upskilling or additional training, which can improve your customer service.
By investing in your team by offering them professional development and opportunities for growth can only aide in your business growth. Just as it’s expensive to bring in new customers, it’s also costly and time-consuming to find, hire and train new staff.
Although finances determine how successful your business is, keeping track of your financial health and understanding your income statement, balance sheet and cash flow statement is really the only way to stay on top of it all. If your business isn’t profitable you may need to make some changes to ensure its’ longevity.
By measuring how satisfied your customers and employees are and how many new customers you bring into your business will determine your current and future success. These simple benchmarks make it fairly easy to determine.
Get in touch with us to see how we can help your business.
2 Peas Pty Ltd
P: 1300 896 732