When trying to evaluate “success,” there are a million different key performance indicators (KPIs), stats, and figures that companies can use as yardsticks. It’s easy to focus on pretty numbers that mask hard truths, or view data in isolation so that things look great with a small sample size but are trending downwards on a longer scale.
With that in mind, we want to look at some reliable touchstones that companies can use to see how well they met their 2022 goals, and how well-positioned they are for success going forward.
The areas we’re going to focus on include:
- Financial performance
- Customer and employee satisfaction
- Market share
- Social responsibility
Financial performance
Simply looking at your accounts and saying, “Well, our income was higher than our expenses—we’re successful!” would be a gross oversimplification. In some cases, extremely successful companies can even operate at a loss for several years.
Nonetheless, finances are the obvious place to start. Because whatever else is going on, you need to be bringing in business and trending upwards. A solid recap of the year’s success can be summarized in just two financial documents:
- Income statement
- Balance sheet
1. Income statement
What is an income statement? A report that shows a company’s revenues and expenses for a defined period of time.
While revenue statistics can be abused (e.g. masking a huge loss by citing record revenue), they are extremely helpful when used correctly. Revenue is a key measure of a business’s performance, as it indicates the demand for the products or services that the business offers.
The income statement is used to calculate a company’s net profit for a given period. Since profit is the ultimate measure of operational success, it’s an extremely important metric.
Companies can also use the income statement to identify avenues for increased profit. For example, by finding and eliminating unnecessary costs.
2. Balance sheet
What is a balance sheet? This report shows a company’s financial position at a specific point in time, including its assets, liabilities, and equity.
The balance sheet effectively reveals the real, current financial health of a business. It assesses the company’s financial stability and solvency. It’s rarely as straightforward as it sounds, but companies should consider:
- The level of debt relative to equity
- Short term liquidity
- Tangible assets vs. financial transactions
- How long to receive outstanding payments
- How long to sell current inventory
Used in tandem with the income statement, analysis of the balance sheet paints a clear picture of the company’s financial position for any time period.
Customer and employee satisfaction
Customers and employees are the lifeblood of any organization. Every company should be working proactively to increase both CX and EX. And there are a few simple metrics which indicate how much progress is being made on those fronts:
- NPS and eNPS—Net Promoter Score is a measure of how likely customers are to recommend a company to other people. Employee Net Promoter Score measures the likelihood of employees to speak highly of their employer. Both numbers are an excellent predictor of retention; companies with high NPS and eNPS scores know that the previous 12 months have been very successful for both CX and EX.
- Employee engagement scores—If you’re making internal efforts to increase employee engagement, you must track engagement scores. You’re looking for scores of 65+, but also looking for an increase compared to this time last year.
- CES—Many companies in 2022 found excessive complexity was a killer for CX. Extra steps, slow loading, vague answers and hidden charges were railed against by shoppers. Customer Effort Scores reveal whether your customers are struggling with these same issues, or if you’ve successfully overcome them.
CX and EX should be considered as vital as revenue and profit for gauging success.
Market share
A business that is gaining market share is likely to be doing well, since it’s most likely winning customers from its competitors.
Market share is the percentage of total sales in a particular market that a business holds. It is a measure of a business’s competitiveness, and can be influenced by factors such as the quality of the products or services offered, the effectiveness of marketing and sales efforts, and the overall customer experience.
Social responsibility
Many businesses are now evaluated not just on their financial performance but also on their social and environmental impact. It requires them to be respectful of all stakeholders—employees, customers, shareholders, and the community members they serve.
Companies should look at any CSR efforts they’ve made in the last 12 months and determine how successful they’ve been. This can include measures such as reducing the company’s carbon footprint, improving its impact on local communities, and strengthening its commitment to diversity and inclusion.
By demonstrating a commitment to social responsibility, businesses can improve their reputation, attract and retain customers and employees, and create long-term value—but it’s necessary to regularly check just how much progress is actually being made.
What’s next?
An annual review is only valuable if it’s used to plan even bigger improvements for next year. The key next step is to collate all of these results and say, “Okay—where will we focus this year to make even more improvements? Where do we want to go and how will we get there?”
Need more ways to measure success? Try Sogolytics. We are committed to improving both customer and employee satisfaction. Our intelligent platform lets you monitor customer experience at every touchpoint, while also checking the pulse of your employees and finding ways to improve engagement. Ready to get started? Let’s get in touch, and we’ll give you a free product walkthrough!