How to measure what matters

Measuring what matters is essential for professional services firms, says author and consultant Tim Williams, particularly as firms continue to experiment with the concept of outcome-based compensation agreements.  

May 22, 2014 |
Steven Burns

Measuring what matters is essential for professional services firms, says Author and Consultant Tim Williams, particularly as firms continue to experiment with the concept of outcome-based compensation agreements.  

“Most measures of performance – sales, market share, stock price, etc. – are lagging indicators that only tell us where we have been,” he writes in a LinkedIn influencer post. “What we need are leading indicators. We need to measure not just brand success, but understand what are the precursors of brand success.”

Williams notes that marketers typically spend their time and energy analyzing the result instead of observing and understanding the process that leads to the result.

“Most leading indicators never appear on a financial statement or sales report, but they have tremendous predictive power – that is, they will drive the numbers that ultimately appear on the financial statements,” he writes. The correct leading indicators will foretell the lagging indicators.”

While some lagging indicators – such as incremental profits generated from a marketing campaign – are important and relevant measures of marketing success, many traditional measures of success are the result of historical practices rather than a careful study of cause and effect. 

“The challenge – and the opportunity – is to engage marketing teams in identifying the metrics that predict a brand’s success, and then work to improve them,” he writes. 

Here are a few examples:

External indicators

• Client compliments

• Client complaints

• Client referrals

• Client suggestions

• Online endorsements

• Positive brand experience

• Percent of target population knowledgeable about brand

• Positive press coverage

• Percent of clients who give high ratings to their experience with brand

• Degree to which clients are satisfied with service from firm

Internal indicators

• Degree to which employees have positive views of the firm

• Degree to which employees believe the firm practices are in line with the brand’s stated values

• Degree to which employees are satisfied working for the firm

• Intent of employees to retain their employment status)

• Likelihood employees would recommend the firm to a friend

Read more from LinkedIn.

Editor's Note: This is sponsored content. The text was provided by the sponsor company.

Steven Burns | The Business Behind Design

Steven Burns, FAIA spent 14 years managing the firm Burns + Beyerl Architects, and during that time the firm’s earnings grew at an average rate of 24% per year. After founding his own software company, Steve took his management expertise to BQE Software, where he is refining their business strategy and product development for the company’s groundbreaking project accounting solution, BQE Core.

Related Blogs

June 15, 2018 | AEC Tech | The Business Behind Design

Helpful tips for managing projects more effectively

May 08, 2018 | Building Team | The Business Behind Design

Ways to increase productivity and revenue, while providing a supportive workplace environment

April 03, 2018 | AEC Tech | The Business Behind Design

We've all heard that data is important, but what role does it really play in your business?

March 28, 2018 | Building Team | The Business Behind Design

Here are six strategies to keep your projects on or even under budget.

February 01, 2018 | The Business Behind Design

Simple changes to your daily habits can help increase efficiency and profits.

January 03, 2018 | The Business Behind Design

Follow these networking strategies to grow your architectural business with the work that you want.

December 28, 2017 | The Business Behind Design

While standard financial accounting is essential for the health of your business, project accounting helps...

December 12, 2017 | Building Team | The Business Behind Design

The most cited issues are communication breakdowns, inadequate fees for the work provided, and unrealistic...

November 30, 2017 | The Business Behind Design

There are techniques you can use with your invoices that both highlight your firm’s value and make the proc...

Overlay Init