What Metrics Should I Track?
As an acquirer of vertical market software companies, Volaris Group and its parent company, Constellation Software, have spent decades refining their understanding of business performance. Through analyzing data from over 1,000 diverse software companies, they have developed a robust framework of metrics that enable businesses to measure their success effectively.
This expertise gives the Volaris Automotive portfolio of companies a significant competitive advantage. By leveraging these metrics, business leaders not only evaluate performance but also drive strategic decisions to achieve sustained success.
The Challenges of Metrics
Every business uses at least one key metric to measure success, such as recurring revenue, cost per customer acquisition, or net promoter score (NPS). However, successfully measuring and monitoring metrics—particularly over the long term—can be challenging.
The biggest challenge is understanding what a business’ full potential could be.
When businesses lack direct peers to benchmark against, tracking performance against past achievements is the most likely solution. This method can highlight trends but may not reveal untapped potential. Metrics are most valuable when they help a business understand both current performance and future possibilities.
Other common issues of metrics include:
1. Defining the Right Metrics
With numerous priorities, identifying metrics that genuinely impact business outcomes is difficult. Choosing the wrong ones can lead to wasted resources and misaligned efforts.
2. Unrealistic Targets
Setting unattainable goals can focus efforts on unproductive activities, causing distractions and lowering morale across teams.
3. Misaligned Metrics
When metrics conflict, teams may focus on activities that don’t align with the organization’s overall objectives, leading to inefficiencies.
4. Ownership Issues
Metrics often span multiple teams, making it difficult to assign accountability but also in determining whom is responsible to track and manage said metric.
5. Data Quality Challenges
Metrics developed after systems are in place lead to difficulties in collecting or verifying accurate data. This can undermine decision-making until there is confidence in the data, which is especially problematic for metrics which require year-over-year comparisons.
6. Too Many Metrics
Tracking an excessive number of metrics can create conflicting insights, dilute priorities, and overwhelm teams.
To avoid these challenges, Volaris Group has given all its companies a set of target metrics. This standard nearly eliminates all the issues outlined above and provides an achievable benchmark by which our companies can determine where they currently stand against their vertical market software peers as well as their own potential.
Our Baseline for Success
At first glance, Volaris Group’s diverse portfolio might suggest that each company should have different metrics. However, a closer examination reveals a shared foundation: these companies are all software businesses pursuing the same goal—long-term, sustainable growth and profitability.
Viewing performance through this common lens, it becomes clear that adopting core metrics across companies is not just sensible but also highly effective. By applying the proven metrics that have driven success for other Constellation Software and Volaris Group businesses, newly acquired companies gain a powerful blueprint for growth. These metrics provide flexibility for companies to chart their path to success while adhering to a tried-and-tested framework.
What Gets Measured, Gets Managed
While specific metrics may vary between companies, Volaris Group’s businesses adhere to core categories that track performance across key functions:
- Administration
- Sales & Marketing
- Professional Services
- Research & Development (R&D)
- Customer Care
Standardizing these metrics across the portfolio offers a unique advantage. It enables businesses to connect with peers in similar industries, geographies, or sizes and share insights about how to meet or exceed their goals. These shared learnings accelerate success for companies that have recently been acquired and are ready to embark on their next growth challenge.
Determining what metrics to measure, setting realistic targets, and defining success for a business is no easy task. Challenges such as misaligned priorities, poor data quality, and cross-functional collaboration can make the process even more complex. However, Volaris Group’s deep expertise in analyzing company performance has allowed it to create a standardized approach for its acquisitions.
By leveraging decades of knowledge and experience, Volaris Group provides its companies with a roadmap to long-term, sustainable growth. These carefully crafted metrics streamline decision-making, foster collaboration, and enable businesses to achieve their full potential in a competitive landscape. The success of Volaris companies is a testament to the power of measuring—and managing—the right metrics.
