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Impact Metrics: Why they Count

Updated: May 19, 2021

Metrics are important. Impact metrics are vital! There is a difference and you’ll see why. There are metrics that can be used to measure the performance of a business. Of these, “impact metrics” are “people energy” metrics that measure true game-changers in an organization. Impact metrics come from two primary constituencies: The Customer and The Employee.

Impact metrics include:

  • Direct Customer referrals

  • Customer testimonials

  • Employee development

  • Employee innovations

  • Employee “wow” events

These “actions” bring tangible results to the business. Let’s review each of these metrics.


Direct Customer Referrals

It’s a common refrain that your best salesperson is your customer. When customers tell others to buy your product or service, most, if not all the heavy lifting of cultivating that sale is done. An example of this could include a friend asking another friend in a discussion “hey, what kind of smartphone should buy?” If the response is a super-strong endorsement for an iPhone or an Android, most of the selling is already done.

Customer referrals convey reassurance to the buyer prospect that the product or service is a good choice. Affirmation, given through Direct Customer Referrals, sends a powerful message to a potential buyer. While studies vary by industry, according to Nielson, 92% of people trust customer referrals from people they know. Direct Customer Referrals rank amongst the highest and most impacting of all lead sources.

These leads are qualified leads. The buyer has already been given the “it’s ok to buy this” from their friend, family member, or colleague.

Thanks to Clay Banks from Unsplash

Focussing on these leads will greatly benefit the organization. It is worthwhile to spend time and energy better understanding how these referrals are cultivated. Learning what prompts these leads will tell your marketing department how to further develop this strategic lead source.

Customers are a critical part of the overall value chain and the Direct Customer Referral shines above all others to impact future results. Per Reichheld in his Harvard Business Review study, The One Number You Need to Grow, referral rate is positively correlated to a company’s profit growth.


Customer Testimonials

Customer testimonials represent an action that a customer will take in sharing their feelings about their buying experience. In a recent ProsperCI blog post, Employee Juggernaut, we shared that there are 4 reactions most customers will have after buying your product or service:

  1. Be disappointed by the experience and decide to tell the world about it.

  2. Feel their minimum threshold was not met, i.e. not satisfied and tell no one.

  3. Feel their minimum threshold was met, i.e. satisfied and tell no one.

  4. Be delighted by the experience and decide to tell the world about it.

Optimally, after an experience with your company, they want to share a 5-star rated testimonial. Again, different studies show that up to 8 out of 10 buying decisions are based partly or predominantly on client / customer testimonials. According to Vendasta, 88% of consumers say reviews influence their online purchasing decisions. Measuring and cultivating these testimonials is another essential business function.

While we certainly want to track our customer testimonial ratings, we need to ensure a large enough sample of testimonials is gathered to be meaningful. Do your systems and processes make it easy for customers to be able to send you a testimonial? Customer testimonials, similar to Direct Customer Referrals, play a key role in the continuous improvement of your business.


Employee Development

Perhaps one of the most untapped areas of opportunity in business is employee development. We often see that this budgeted line item with little to no spending against it. Even worse, some companies don’t budget for it at all!

Photo by Clay Banks on Unsplash

Your single greatest business asset is your employees. Invest in them — heavily. Having an Impact Measurement targeted at employee development will have lasting effects on your organization. Employee (professional) development has many positive side effects including:

  1. Employees, by growing their skills, empower the organization to offer new products and/or services.

  2. Employees feel respected and valued by the company.

  3. Employee Engagement increases and so will their contributions to the organization.

  4. Valued employees are less likely to leave.

We believe a great way to amplify this impact metric is to bring employees through Continuous Improvement training. Continuous Improvement (CI) training and the methods, tools, and techniques tied to this discipline, help employees enhance their skills in many concrete ways. It encourages active participation by employees driving innovation and engagement.


Employee Innovations

Measuring employee innovations, by inference, encourages employees to create solutions and breakthroughs. It challenges your team to identify new and improved ways of doing things, focusing on internal and external customers. Employee innovations are game-changers in an organization.

The power and impact of employee innovation are limitless. One cultivated idea can improve sales, reduce expenses, grow profits, enhance the customer experience and further employee engagement. Innovations can move the organization to uncharted paths and opportunities.

Photo by Nong Vang on Unsplash

Business owners and leaders who cultivate such an environment enjoy a significant competitive advantage.


Imagine an unconventional approach:

We ask management to enable 3–5 employees to experience an “innovation retreat.” These 3–5 people will be away from the company for a period of 1–3 days in an environment fostering creative thinking (perhaps a beach house for example). These employees are chartered with one question: How can we significantly improve our business? And off they go.

You will seldom be let down by this exercise. We believe the benefits outweigh the costs on a scale of at least 10–1. You have to trust in the process — trust in your people and act on their findings. You will be surprised by the imaginative discoveries that emerge. Tracking employee innovation implies by definition you value it. Sharing this metric with your employees will firmly convey to them it is an important part of running the business and that they are key players.


Employee “WOW” Events

Employee “WOW” events are their own special category on our Impact Metric list. While innovations can be tied to this, it is often more closely tied to compassion, empathy and a desire to serve. An organization that recognizes the impact of this metric truly understands how the “human equation” is so closely tied to the business equation.

We all have experienced “Wow” moments in our lives delivered by an employee of a company, a friend, or a family member. Seldom, if ever, do these events have real financial costs tied to them, yet the memories last a lifetime. When these “Wow” events come from an employee, often spontaneously, it sheds light on the core values of the company. Encouraging employees to do the right thing, on behalf of a customer or fellow employee (or perhaps a total stranger), conveys trust and respect.

A Wow Moment

“Wow” moments are often inspirational and will leave employees feeling a stronger bond with each other and the company. This Impact Metric may or may not have a direct economic impact on the business, but it will have an emotional one of immeasurable value to the business. Measuring and sharing this metric with employees places special significance on it and conveys to all employees that leadership is behind them when they act on a foundation of goodwill toward others.


Impact Metrics play a vital role in business. They differ from traditional metrics in that they are derived from “actions” taken by Customers or Employees. These actions come in the form of customer referrals, customer testimonials, employee development, employee innovations and employee “Wow” events. These impacts have both economic and emotional impact on an organization.

Business models that embrace these actions and efforts dramatically improve the retention of both customers and employees. This, in turn, has a positive effect on future earnings and employee engagements. Thus, instilling these Impact Metrics in your business should be a key component of your continuous improvement strategy.

About The Author

David DiPerri,CPA is the founder of ProsperCI, a business advisory firm dedicated to helping businesses thrive and CI4Biz, an educational resource for business owners and leaders. You can connect with David on Twitter, Facebook, LinkedIn and Instagram.

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