Making good metrics into better metrics

The last two weeks I’ve been dancing around the topic of metrics without getting to the point, which is: How are things?

More importantly, how do you know?

Most businesses have some metrics. Some are very data-driven, some are barely so and there are plenty in between those two points. One of the differences between the very data-driven companies and those that are “sort of driven” is the quality of the metrics.

Good data vs. great data

There’s nothing wrong with good data. It’s certainly better than no data. Good data includes facts and figures like sales, costs, profit, inventory, payables and receivables.

Here are some good metrics: We have 1207 trucks on the road. Our drivers make $0.38 per electronically logged mile. It costs us $1.39 per mile for truck, driver, fuel and overhead (taxes, insurance, maintenance, etc).

Key to making good metrics into better metrics: Drill deeper. Hiding inside most good metrics is better, actionable information.

Quality isn’t just about accuracy, it’s also about the depth of the metric and the insight it communicates. What would happen if you drilled deeper into your good metrics? Would you find additional information to take action on?

Let’s drill deeper into the trucking metrics I mentioned above – on one topic: downtime.

Downtime isn’t on the list of metrics. It’s hidden inside overhead. It’s not solely about the maintenance to get the rig back on the road. It has hard costs (repair parts, repair labor) to you and to the driver (lost mileage and thus lost pay), in addition to the possible cost to your reputation. Showing up late or not at all not only risks your relationship with the client, but may also put their client relationships at risk. Embarrassing a good client by showing up late with their clients’ goods and materials can cost you far more than the price of that run.

What if that downtime makes you late for the next pickup? How far can this cascade across your business and the business of your clients?

Drilling down into good metrics

Here are a few downtime related questions to drill down with:

How many minutes of unplanned downtime do your trucks average per 100000 miles? What’s the average cost to get them back on the road, per incident? Per downtime hour? What would the change in revenue and expenses be if you could cut the average time in half?

If all of your rigs are company-owned, which model and model year are accruing the most downtime? For companies who lease rigs from drivers, which model and model year accrue the most downtime?

Is this downtime consistent across all owners or is there an 80/20 breakdown, where 20% of the drivers are accruing 80% of the downtime? Same 80/20 question for company-owned rigs. What costs are within 10% of the rest of the industry? Which ones aren’t?

Can any of these differences in performance be resolved with references to a better repair shop, a different brand of part / fuel / oil, better record keeping, more frequent maintenance or a different maintenance process?

For the ones that are outside industry norms, what can be done to leverage and improve the ones where you are beating the industry? Is there a legitimate reason for your business to be “below industry standards” in some ways?

Getting to better metrics

Having the answers to your business’ drill-down questions helps you improve consistently on a sustainable basis.

There are a couple of keys to drilling down:

Get organized. Before you can find better metrics inside your good data, your good data needs to be organized.

Take it a bite at a time. It’s easy to do one pushup before you get in the shower. Tomorrow, it’ll be easier to do two. Next week, 10 will seem easy. If you try to take on all of this at once, it will be discouraging because of the size of the task and the complexity of it. Keep it simple so it’s easier to delegate later.

Leave the rabbit chasing for another day. There will be plenty of time to address the things you notice while drilling down into one thing. You will almost certainly notice other things that require attention. Resist the urge to jump on them. Instead, make note of them and then finish the task at hand.

Procrastination is not a good metric. Start today. The more you know, the better prepared you’ll be for radical industry changes, like big rigs without drivers.

What’s holding you back?

I suspect you’ve heard of the Pareto principle, also known as the 80/20 rule.

In its simplest form, it states that 80% of the results come from 20% of the efforts made. Further studies on the principle have shown that it often extends to far more than efforts made, and frequently describes the results produced by a team or a group of people.

If you look closer, you’ll find that the root of the 80/20 split of results is often based solely on differences in things members of the group do and do not do. If you review the habits, techniques, tactics and strategies regularly used by the 20% who get 80% of the results vs. the habits, techniques, tactics and strategies regularly used by the 80% who get 20% of the results, you should find some causative differences. I suspect some of them will be obvious, while others will require further study to determine why those behaviors contribute to a major difference in outcomes.

Some have postulated that of the 20% who are most successful, there is a 5% that leaves the remaining 15% behind, despite the success of the 15% group. I think you might find yet another set of behavioral differences between the 5% and the 15%. This doesn’t mean any of these behaviors are bad, though they certainly could be.

That the 80% is behaving differently from the 20% (and especially the 5%) doesn’t mean that they are unsuccessful. In my experience, their level of success tends to be closely related to their mindset and their belief in what they can accomplish.

Choices matter

If you’re part of that 80% and don’t want to be, you have some decisions to make. You have to decide that you won’t remain in the 80%. You have to decide to learn from those who are achieving the things you want to achieve. This may seem obvious, but I can tell you that this is a most difficult choice to make and a decision that many people think they make, but infrequently stick to. It’s too easy to keep doing things the way you’re doing them. It’s easier to not have to explain what you do and why, particularly since most of the people you interact with will seem to need a justification for why you do things differently. You’ll hear it from your staff, your contractors, your vendors, your family, your clients and your prospects.

Clinging to the behavior of a group you don’t want to be in is what keeps you in that group. More often than not, it’s central to what’s holding you back.

In any group of similar people, the behaviors of that group are substantially different. Whether you’re in a room of professional pool players, professional skeet shooters or “self-made” billionaire business people, history has proven that 20% of the people in that room are making the majority of the advances and having the majority of the successes – DESPITE the fact that everyone in the room is a member of that group. Perhaps more telling is that 5% of the people in that room are far ahead of the remaining 15% in that 20% group – even though they’re peers.

Why? Because the 5% is doing something different. That 5% will likely be the first to leave the group behind, because they’re already pulling away.

Markets are groups too

Your market is no different. No matter where you are in your market, I’ll bet you can identify who the leaders are, who’s in the middle and who is near the bottom.

When you see someone in your market do something that works, do you see if it works for you? When you do something that works, does anyone else in your market try it?

When you see something in another market that you appreciate, do you try it – even if you have to put a twist on it to make it work for you? Do others in your market do this?

Can you easily identify things that competitors in your market are doing that are holding them back? If you shine that light back on your own business, are you doing any of them?

If you aren’t a leader in your market, can you identify things that the leaders in your market are doing that you aren’t doing? If so, what’s holding you back from implementing them?

Improvement is a choice. Your place in your market is a point in time, it isn’t a foregone conclusion.

Are you un-coachable? Drips might help.

Heading into Battle

Frustrated with the rate of change or accomplishment of new work in your business?

I had a conversation recently that might help.

Ann: Sometimes I think some of us are un-coachable.
Mark: Reminds me of “When the student is ready, the teacher will appear.” It’s huge for those who teach and/or coach – you have to meet the student where they are rather than where you want them to be. Anyhow, I don’t think it’s being un-coachable, it’s a form of being overwhelmed.
Ann: We hear and understand but we just can’t get traction and do it consistently and …
Mark: Habit momentum is important. Start one thing today, then when it becomes a daily habit that’s part of your life, add another.
Mark: IE: D,D,D
Randy: I *knew* you were gonna get that in there.
Ann: D..D..D..?
Randy: DDD stands for “Drip, drip, drip.” In this case he means that if you do a little bit each day, the small efforts add up. It’s something I have to *constantly* remind myself about.
Mark: Right, but it’s important that you make sure the *right* bit is what’s getting done each day.

Little changes, big results

Ann: But what does Drip mean?
Mark: It’s a euphemism for incremental change.
Ann: Told you I was un-coachable
Randy: By making incremental changes, those little changes that we might not be able to make as a whole eventually add up to big things.
Ann: DDD = small deltas
Randy: Exactly. And one of my favorite Rohn quotes applies here. “For things to change, you must change.”
Mark: With DDD, the concept is that it’s easier to change one thing in your business than to change 20 or 30. When we look at our business, we can often come up with 20-30 or even 100 things that we’d ideally like to change, so it’s often difficult to get ANY of these changes to happen because of the sight of them as a whole.
Ann: Yes, it’s tough to get traction.
Mark: Absolutely – and that’s the painful part. In most cases, even establishing two or three of the changes will make a substantial difference to our business. Some see two or three changes as a failure because they’re focused on a list of 20 or 30 as “success”. If they aren’t in the right mindset, these initial successes actually discourage them from continuing to chip away at number three, much less 21, 22, etc because the effort as a whole feels like a failure or a journey that’ll never end. It’s too easy to miss the incremental wins when you’re focused on the end (or what you think the end is).

What IS a Drip?

Dean: Do you guys think Ann’s phrase about “Getting traction” is a good description of the problem?
Mark: Traction – I agree it is, which is what drips are all about. Drips generate confidence and momentum as they become habits, forming a foundation for bigger change. Traction.
Dean: What if the drips aren’t enough to make a business work? I have a friend who’s been “running a business” for years, working three hours per week. After a decade, little progress.
Mark: Drips are about new habits and making change, not building the whole business. And…Drips aren’t about hours. They’re tasks.
Dean: For example?
Mark: Say a client needs a print newsletter, an email newsletter, blog posts and videos. If I drop all of that on them at once, they won’t get them done. There’s too much to take on at once and it’s overwhelming. Instead, we break each one out into a drip. In other words, each one is a new habit (product or outcome) you want to introduce into your business.
Dean: OK, let’s talk about starting the print newsletter.
Mark: I’d probably rough out a layout in maybe an hour. I’d spend the next hour writing content.
Dean: Starting from scratch, you’d just need one hour?
Mark: No, I’d spend an hour on the newsletter until the first issue is done. The idea is to chip away at that single habit or change for an hour a day (or a week, whatever I have to work with) until the first cut is done. At that point, I should have a process that’s ready to delegate or outsource.

The key to Drip, Drip, Drip is to stay focused on each change and keep working at it till it’s done.

Start a streak

What have you done every day, every week or every month for years?

For example, I’ve written a weekly column for the Flathead Beacon since 2006.

I don’t get a week off from the column if it’s Christmas or the Fourth of July. It just gets done.

Some find that a massive, if not surprising, achievement. Others see it as if it were a ball and chain.

Me? It’s just something I need to get done every week. Some weeks, it’s harder than others – but I still make sure it gets done – and yes, I’m better at getting that done regularly than I am at some other things because I’m accountable to the community who reads it.

The value of that accountability shouldn’t be discounted. It’s a powerful tool and motivator.

Think about it

Think about the consistency of the tasks *you* perform to grow your business. Would more consistency in how you podcast, blog, tweet, vlog, post to Facebook, send an email, make a call, drop a mailing or send a newsletter mean more/better business? Would adding a new item to the list make more of an impact?

Of the things you do regularly, which of them produce the best response? (if you don’t know – fix that)

Would it help if that work was done more often? Think about it.

If I owned Amtrak

Some random thoughts that passed through my head during my recent Amtrak trip – which went fairly well.

I don’t warrant that they’ll all be winners, popular or successful. Just some brainstorming.

  • Showers. $5.
  • Real bathrooms, even if it means there are fewer of them. Despite being better than airliner bathrooms, women don’t really appreciate them in their current state – and neither do most men.
  • Way better facilities for disabled and less mobile persons. 24″ wide winding staircases and airline-style bathrooms at the bottom of those stairs say “Stay away” to a lot of people.
  • Add some family-friendly features. There are no diaper changing tables, no place for kids to mingle and play, no family-only cars where families could avoid things that they don’t want their kids to see at whatever age.
  • Rails. Man o man the continuous welded rail in the West smokes the rails elsewhere. Quieter, smoother, faster.
  • Add a middle business class. Right now, there’s coach and sleepers. There’s room for another tier in some areas I suspect.
  • Fix the low-end sleepers. Most people who have them comment about them being cramped and uncomfortable.
  • Text message the current train position, estimated arrival (relative to that position) to subscribed mobile devices.
  • Information stations on LCD panels in each car so you know where you are, what the next stop is, how long you’ll be there, what the dining car menu is, etc.
  • Wireless everywhere.
  • Electricity in the observation car and at every seat (currently, it tends to be one or the other. Very inconsistent.)
  • Business car? Meeting room?
  • High-speed solid rail in the interstate system’s median?

Net result?

When was the last time you brainstormed about your business? Or asked your customers to do so?

Tweaks that touch the bottom line

Yesterday, we talked about a little tiny, totally-free thing that you could do to ensure that someone comes back to your business on a day that you can’t serve them.

As you might guess, there are a bunch of these little things.

They range from how you answer the phone to that little something extra you do when packing something for shipment to a customer.

It definitely impacts how you respond to calls, emails, tweets and other inquiries – such as “Do you have any iPads in stock?” (a frequent question to Apple dealers these days).

How do you answer questions that you *know* aren’t going to immediately close a sale?

Let’s use a software developer as an easy example. Upon detection of an error, they have a ton of choices:

  • You can display a technical message about what happened (“Stack push failure in c70mss.dll at C53DAE.”)
  • You can display a friendly message explaining what happened in non-technical terms. (“I’m not sure what’s wrong, but you’ve gotta reboot.”)
  • You can display a message that provides instructions to fix the problem. (“Don’t do that again. Do this instead.”)
  • You can make the program blow up and force the user to start all over again, and just skip that whole “display a message” thing.
  • You can fix the problem (and if necessary, inform the user) and move on.

That last one might make you scratch your head a bit. Remember, you went to the trouble to *detect it* and create a message, so why not just fix it when you can?

Sure, there are cases where you can’t assume what to do and you have to ask… but those are normally the exception.

Not just the geeks

The same goes for handling customer issues in your business.

You could force your staff to say “Sorry, my manager has to be here to fix that.” or you could simply put a process in place that allows them to deal with it – and do so without risking financial loss.

That’s a win in several ways:

  • It’s a win for your customer because they get helped immediately rather than having to wait for you and even worse, make a return trip to the store for something that should’ve been right in the first place.
  • It’s a win for your staff because it empowers them, giving them the emotional “reward” for helping a customer – which will motivate them to want to continue that little buzz-fest.
  • It’s a win for you because it keeps you off the phone. Rather than dealing with minimum wage questions you shouldn’t be interrupted with anyway, you can keep playing golf, fishing, planning your next strategic move and/or creating the next big thing that’ll push your business into its next big growth cycle.

If Wal-Mart can issue a refund (or execute an exchange) without requiring a phone call to the CEO in Bentonville, I think you can find a way too.

Look around. What can you tweak? Most of these things cost nothing. We might simply be talking about a once a month (or quarter) email.

You simply have to be a little more enthusiastic about thinking about the needs of your customer and how to make the next interaction with your business *even better*.

All of these things contribute to the kind of customer service, the kind of quality feel, the kind of thought process that makes a customer want to do business with no one else but you – even if they can’t put a finger on why that is.

The Retail Doctor’s newest book helps you diagnose, treat, cure

Stethoscope
Creative Commons License photo credit: a.drian

Bob Phibbs’ staff recently sent me a review copy of The Retail Doctor’s Guide to Growing Your Business, his newest book for the retailer looking to improve their business’ performance.

Or to go from wondering about survival to reaching a state of “thrival”.

The Guide’s subtitle, “A step-by-step approach to quickly diagnose, treat, and cure”, gives away the structure of the book. It’s organized by areas you need to address, such financials, training, hiring, retail presentation (merchandising, sort of), the internet, sales and finally, what to do after you’ve read the book.

When you have a business and you buy a book in hopes of solving its problems, one of the things that sometimes makes it difficult to take the first (and next) step is gleaning what to do from all those good ideas. Bob solves this with sections called “Stat” (medical-ese for “Do it now”) at the end of every chapter. Stat lists a half-dozen things to do RIGHT NOW based on that chapter’s teachings.

The Stat summary is a clever tool for the busy business owner because it not only tells you where to start, but with those things behind you, their success will encourage you to go back and look for more things to do.

As a whole, the Guide to Growing Your Business could become the roots of the operations manual you’ve never gotten around to creating. It’s rich in the what and why of fixing things rooted in common (yet incorrect) maxims of retail businesses, such as “if there’s enough gross, there has to be some net around here somewhere” (a Dan Kennedy quote).

About that operations manual thing – I know that you might think your business doesn’t really need one. However, since Bob has done much of the work for the core of it – why not take that and run with it? As he states in the hiring chapter’s discussion on job descriptions, every job needs a complete description. Likewise, every retail business needs an operations guide, which is simply a consistent rules-of-the-road document for how to run the place.

If it (it being an operations manual) is good enough to get 16 year olds to competently run a profitable franchise store, it’s probably good enough for you.

Even if your business isn’t struggling, each chapter of the Guide is bound to reveal at least one nugget, strategy, technique or “Stat” item that you should be doing. There’s bound to be something that you’ve overlooked, forgotten or just didn’t think about. Take those things, implement them and continue your success.

I suggest you grab a copy. I suspect it’ll end up dogeared.

22 things you dont know about your customers’ web viewing habits

Today’s guest post is from Ian over at Conversation Marketing and talks about little things you need to know about the folks who visit your site.

These kinds of things hit close to home here at Business is Personal. Little tweaks make a big difference.

What are 22 things (at least) that you dont know about your customers’ website viewing habits?

Most of us want people to stay on our site for as long as possible.

These 22 things are the kinds of things that drive them off.

Inherit the earth, inhale the opportunity

All around us, people are being laid off.

The companies in (and near) my little town in rural, northwest Montana – have seen more than 800 layoffs.

Thankfully (if there is a bright spot), not all of the 800 people laid off live here in our town of 4500 people – but it still affects everyone as it trickles through the town’s economy.

A local banker told me a few weeks ago, “You can see it on them when they come in…they’re wearing it”.

“It” being the weight of unemployment.

The bright spot

There is a bright spot to all of this. Our local community college has seen a massive peak in registrations.

“In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.” –   Eric Hoffer

You know that a lot of the folks who are getting laid off are unprepared to move on. Not all of them, of course, but a substantial percentage.

As a business owner, you already know that you have to be careful who you hire in these situations. Many folks will bolt back to their former job as soon as it opens up – because you probably can’t pay them what a manufacturing job does, for example.

Scout motto – “Be prepared”

How are you preparing your staff and *your company* for the world that doesn’t yet exist?

You might think that you don’t care because tomorrow isn’t here, and those newfangled things won’t appear for a while.

Or you might be the town’s Yahoo and the new business in town just might be the Google that makes you irrelevant.  Heaven help you if that new business actually has some funding and isn’t bootstrapping like so many others.

It isn’t about Silicon Valley, Yahoo and Google. This conversation is just as applicable to them as it is to your dry cleaning store.

It isn’t just laid off employees that need to be learning. You likely recognize that they should have updated their skills BEFORE they found themselves in a position to be laid off.

Look in the mirror, cuz the same goes for you.

Your business needs to learn and grow as well if it is to inherit its rightful place as the dominant innovative business in your niche.

That has to happen before your Google arrives on the scene.