Wednesday, May 7, 2014

What Is Your "Pounds of Chocolate" Metric?

Managing a company can get hectic. Multiple numbers and statistics get thrown at you all the time, measuring different aspects of your business, trying to determine if the return on your investment is being met. But how do you know which metrics to pay attention to when measuring success. Sources close to Warren Buffett, the man considered to be one of the most successful investors of the 20th century, say since he is such a busy man, he does not have time to analyze a bunch of data to make sure his businesses are doing well. At one of the most popular candy (primarily chocolate) manufactures in the world, there is one key performance indicator (KPI) that he monitors closely, how many pounds of chocolate did we sell today? 

Figuring out what KPI you should hone in on depends on what part of the customer experience your company focuses on. In Warren Buffett’s case, he is primarily concerned with sales.  In another example from a leader in the security software industry, they put a large emphasis on Net Promoter Scores (NPS).  Another company specializing in the PC industry looks at the number of in warranty customers who do not escalate to call center agents. In other words, they look at the percentage of call deflections to determine if they are providing customers with excellent customer support. Yet another company focuses on voted effectiveness, which is a metric reported by a Virtual Agent that measures whether users voted the solution provided was effective, not effective, or partially effective. Looking at this metric, this company can get a better understanding of what users find useful and what can be enhanced.

As you can see, companies focus on different KPI’s to measure success. What’s your “pounds of chocolate” metric? How does your company measure the success of your business?