How to set the right objectives and key results
The level of success of a company depends on an array of factors, but one, in particular, is less obvious than others: setting the right metrics for your business. Without tracking and analysing the right OKRs, management can't correctly assess a company's success rate, making it impossible to make the right decisions.
There is much literature around setting business metrics, so most companies set them according to what others are doing. This approach often tracks generic OKRs that aren't directly linked to your business strategy, results in measuring too much or too little, or not regularly reviewing and updating OKRs once they're set, to name a few.
With countless examples of business metrics, how do you know which ones are worth tracking?
While the ideal combination of OKRs will depend largely on your individual business’ needs, specific metrics are vital for companies to consider.
Customer-focused metrics
According to Ewan McIntyre of Gartner, "The COVID-19 crisis has shifted CMOs' focus from customer acquisition to customer retention and growth". Similarly, Forrester predicts that "spend on loyalty and retention marketing will increase by 30% as CMOs assert control over the full customer lifecycle."
The time to focus efforts on customer retention and loyalty is now. Customer-related metrics aren't only important because they act as a window into how the target audience is behaving, they also give valuable insight into how profitable a company actually is and can be in the future. Still, without clearly defined metrics to efficiently measure results, it's impossible to have an accurate overview of the situation.
So, which key metrics are relevant? Specialists recommend measuring an array of OKRs, but what are the most important ones?
We recommend to our clients: time taken to onboard customers, achieving SLAs promised to customers, and customer satisfaction scores done through surveys. These three metrics offer a clear view into how satisfied customers are with certain aspects of the company, which directly impact revenue and the company's growth potential.
Employee-related metrics
Employees are the lifeblood of any organisation, so a healthy company culture is vital in any successful business. As countless studies have shown, especially over recent years, with the pandemic triggering a more significant shift, people value a positive and supportive work environment now more than ever. Now is the moment to create a collaborative climate, where employees are on the same page and are working towards common goals.
Metrics such as employee retention, turnover ratio, engagement rate, or satisfaction level help businesses understand their employees' overall dedication and motivation. Without these insights, companies would struggle to improve employee performance and efficiency and could risk high re-hiring costs if employees leave.
Marketing metrics
Most companies rely on their marketing efforts to attract new customers, so measuring the results from these campaigns is among the essential OKRs.
As the world went into lockdown in 2020 and has gone through several waves of severe restrictions, the online space became more crowded than ever, making it harder for companies to stand out from the crowd. Klout score (which measures social media influence), brand equity, or the conversion rate are just some of the key metrics businesses should track to understand their return on investment in marketing efforts.
With markets becoming more and more competitive, companies invest in marketing campaigns to attract new consumer attention. However, keep in mind that a positive marketing ROI isn't necessarily the only OKR; it costs companies much more to acquire new customers than retain them.
There are innumerable business metrics, and the metrics selected depend on many factors, but there are a few key metrics any company should consider, no matter its size or activity.
Measuring your organisation's performance requires comprehensive data collection and analysis, so it's essential to measure the right goals and weave out all the information that is blocking you from having a clear understanding of where your company is. This makes the difference between steady growth versus constantly putting out fires.
