As we barrel toward the end of the year, I have been finding myself spending a lot of time thinking about metrics. I have often heard the quote,
“That which is measured improves. That which is measured and reported improves exponentially.”
What I didn’t know until I googled it, was that this quote is called Pearson’s Law and is the brainchild of a mathematician from the 1850s named Karl Pearson (that would be the old white dude pictured above).
Had you asked me before I founded an agency, I would have told you that math isn’t my thing and that I’m more of a words person. What I’ve learned in the 13 years of running a company is that I LOVE numbers. Playing with spreadsheets and finding new ways to track and measure growth is incredibly satisfying, and TBH I’ve come to regret not spending more time on math and economics back when I was in school.
I sometimes think I drive my team crazy with my insistence on measuring and tracking every little thing, but I’ll be damned if it doesn’t work. (That said, I know it is frustrating to have to update an internal graph measuring website traffic growth when you have a ton of client deliverables on your plate!)
So what do we track? I like to track both leading and lagging indicators.
Leading indicators will give you the first sign that something is about to tank (or soar). Some of the leading indicators that we track include number of new business meetings booked, number of proposals submitted, and number of SQLs (sales qualified leads) that come our way.
Lagging indicators measure something after it has already occurred. The lagging indicators we track here at our agency are probably similar to what any business tracks. They include bookings, revenue, and profit percentage.
By closely monitoring our leading indicators, we’re able to anticipate a dip in new business meetings and adjust our strategies to boost outreach efforts. This proactive approach helps us avoid potential revenue declines. On the flip side, lagging indicators like revenue and profit percentage help us really dig in and evaluate the effectiveness of our strategies over time and make informed decisions for future growth.
So how about you? Do you also update charts and graphs religiously? Have you found that doing so has improved your business? Any important lagging or leading indicators that I didn’t mention?
Reach out any time with questions, or connect with me on LinkedIn.
