Your most important key results area is sales revenue

Measuring your most relevant key results area in business is a must. In many big organisations, marketing is an island unto itself. Irrelevant objectives lead them to measure vanity metrics, which have nothing to do with sales revenue. As a solopreneur or micro business owner, you don’t have that luxury.

Sales keep your business pumping

Like it or not, sales is the blood that keeps your business pumping. Without sales, your business dies. Robert Kiyosaki, Author of Rich Dad Poor Dad, talks about marketing and sales as a single communication function. Without communication between your business and customers (or clients) there is no cash flow.

Sales and marketing communications are essential for revenue

Which key results area matters?

The key results area which matters most is sales revenue, however, prior to this result there are what’s called leading indicators. Leading indicators are those measures that give a strong indication that sales results will be up. For example, we know if we have a lot of sales presentations or calls booked, we’re likely to close a few sales. Similarly, it might help for us to measure the percentage of these sales calls we convert to paying clients because, if this changes, so does our revenue.

Find cause and effect

In other words, any key results area that has a strong relationship to your businesses bottom line, is one you should track. You can probably see an obvious link between inbound sales leads and revenue. Likewise, you may notice a link between outbound or cold calls and sales revenue.

Why we measure vanity metrics

Social media giants, tech companies and marketers began inventing B.S. metrics, often referred to as vanity metrics because they sounded better. Marketers played along because they wanted to show their employers they were doing a good job, despite them missing the mark that produced real results. You see, the thing about key results areas is that they need to be attached to your objectives or goals, which makes them ideal for solopreneurs and micro business owners.

Vanity metric examples

Several online sources, including Promo, indicate a video view on Facebook and similar social media networks is if someone views your video for 3 seconds or longer. Previously I worked in television advertising, where ad views were counted in their respective 15 or 30 second spots. In other words, a view, was someone who watched your ad in full.

Why would social media giants measure views in 3 second blocks? Because it sounds better and the likelihood of someone actually watching your video in its entirety is significantly less. Does it mean anything if someone watches your video for 3 seconds? No, to be blunt.

Repeated vanity metrics

As if there wasn’t enough hype surrounding these rubbish measurements, some of them double up on a previous mesurement or combine 2 metrics to really impress the pants off you. Engagement is a combination of likes, shares, comments and views. I’m not sure if I missed anything in this metric omelette but let’s be real. It doesn’t mean anything for your bottom line.

Is brand positioning a vanity metric?

Previously I wrote about brand positioning, which is the space you occupy in potential buyer’s minds. Brand positioning requires long term brand advertising and it’s extremely difficult, if not impossible, to draw a link between that and sales. Some marketers estimate up to 97 percent of your target market aren’t ready to buy right now, so brand advertising is important for when they are ready. Importantly, brand awareness and brand recognition can still be measured. Brand advertising is about positioning your business for the long term, while direct advertising is about generating sales.

You need both to create a sustainable business over the long term, however, you need to be careful not to take your foot off the sales accelerator. Without sales in the near term, branding won’t matter in the long term because your business may not survive.

Make up your own dashboard

What really moves the needle in your business? If the end key results area is sales revenue, you need to find which metrics are leading indicators. In other words, what causes sales to increase or decrease. Sales is the one key results area every small or micro business owner needs to measure. However, outside of that, I can’t tell you what else to check. It’s going to depend on your business model. Keep it simple, as these measures need to be something you can both measure and influence.

Marketing and sales are better together

Marketing is not an island. Marketing cannot exist in isolation from sales. This is true in big business but more so in your small or micro business. You can’t afford to spend time and money on marketing that doesn’t move the needle. Therefore, other than long term branding advertising (which has a different purpose), any marketing that’s not driving your sales revenue is a waste.

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