It’s a fairly obvious thing to do – in order to figure out if your firm is blossoming or withering you set up a measuring stick and make a notch each financial quarter. What is perhaps not quite so obvious is what those notches should represent.
The wrong measurement
Chances are you’re measuring your firm’s successes and weaknesses against time. How much time is spent on a file, how much work your employees get down in an hour, how much you’re able to charge per hour, things like that.
The problem with this approach is that you’re measuring tools instead of your firm’s health. It’s like a mechanic measuring their tools to gauge the final results instead of measuring whether the car is running better.
Turnaround time is a tool. Ditto worker efficiency. That even goes for how much you charge per hour if you’re still charging on an hourly basis. They are all tweaked for more efficiency, but they aren’t an actual measurement of the firm’s health as a whole.
How do we know this? Put yourself in your client’s shoes. Does your client come to you in the hopes of purchasing ten hours of your time, or do they come to you hoping to purchase a quality service?
Clients may have a due date so they may be concerned with turnaround times. However turnaround times represent when the client gets their numbers back, but he or she doesn’t care if you spent one hour or one hundred hours on the file.
Their primary focus is of course getting quality work; the amount of time your firm spends on their file isn’t a factor to them. Again, they want to pay you for a service, not for a selection of hours.
The right measurements
An auto-shop can have the most efficient tools in the world, but the garage itself isn’t going to prosper if there aren’t happy clients wanting them to be used.
So, in terms of your firm’s health, what should you be measuring instead?
Employee happiness
Your employees’ happiness is a big one. This isn’t ephemeral; it has a real and definitive impact on your firm’s income. There are all sorts of studies on the subject like this one that shows happy employees are up to 20% more productive than unhappy employees. If your employees are engaged in wooing clients, that number increases to up to 37% – what client is going to want to sign on with a firm where the employees seem miserable?
How do you measure happiness? The biggest clue is turnover – if your firm is constantly losing good employees then happiness is a problem.
Another method is to simply ask them. Schedule face-to-face meetings with your employees and ask if they feel like their work is having an impact, do they feel like they’re helping build the firm, and do they feel recognised for their efforts? You could also measure this with a questionnaire and a rating system of 1 to 5, 1 being a “no” and 5 being an “absolutely”.
Turnaround times
Another measurement of your firm’s health was mentioned above – turnaround times. Again, this is different from the other time measurements because this is a frame of time that directly impacts the client. The amount of time spent on their file does not impact them (unless you’re still charging per hour instead of a fixed rate per service).
A good turnaround time indicates that you have solid workflows up and running. More importantly, it’s something sexy to woo your potential clients with – get your account back in 30 days or you get half off the service price.
They don’t need to know that it actually only takes you a matter of minutes to send their info off to your virtual accountants plus a few more minutes for a quality check once it comes back from overseas. A firm that can offer such a guarantee is one that’s running on all cylinders.
Client satisfaction
Simply put – if clients aren’t happy your firm isn’t healthy. The happier your clients, the healthier your firm. In meetings with clients slip them a survey as part of your agenda asking them to give you ratings and asking for suggestions for improvement.
Your clients are always going to be your greatest form of marketing; so the happier they are, the more they’re going to recommend you to friends and colleagues as their firm of choice. That means there’s a direct link between the quality of your customer service and your acquisition of new clients.
The point is this – your firm’s health shouldn’t be measured by the behind-the-scenes stuff. Instead you should be measuring the things that clients can see and experience directly. Your clients are certainly doing exactly that.
