What's In A Number?
 

August 26th, 2003

Sales...it's all about the numbers...the number of people you talk to...the number of people that you meet with...the number of people that become customers...the amount of money you receive from each customer...the length of time you keep a customer.

Marketing...it's all about the numbers...your market share...the number of times a prospect sees your company name...the cost of identifying a new suspect...the number of suspects and prospects in your prospect database...how many times you've touched each of them.

Selling and marketing

In our newsletter on effective pipeline management a year ago, we noted that "you cannot manage what you do not measure."

Makes sense, right?

Everyone supports this truism.

But people continue to be surprised at how closely the sales and marketing activities of a business can be measured and managed. Here are some of the more basic metrics we track or calculate:

• Cost of a prospect
• Value of a prospect
• Value per prospect by campaign or geographic region or sales person
• ROI of a campaign conducted in January versus June
• Value of a telesales follow up after a seminar
• Conversion rates of people who didn't attend a seminar

While some of these metrics are relatively easy to gather, others can take a lot of work. Some will remain imprecise, educated guesses at best. But all help to track the progress of the prospect through the AIDA process we've discussed in the past.

And each helps to quantify the performance of the selling and marketing people and systems at each stage of the process.

Powerful business decisions

With these metrics, really powerful business decisions can be made - decisions that dramatically affect revenues and profitability.

Wouldn't it be great to know that while your western region is growing more slowly than your eastern region, it's because buyers in the western region will buy only after more than 3 sales visits. (And your sales management has been pushing sales staff to cut bait after 2!)

Wouldn't that little tidbit of information change behaviors?

Or that while you don't get a lot of attendees to your seminars, you regularly identify a handful of high quality prospects who registered but didn't attend the seminar!

Wouldn't that nugget keep you from abandoning those sparsely attended seminars? Who cares if the room is empty as long as you're closing business from the activity!

Good sales and marketing metrics can lead to powerful conclusions like these and more, helping you to see your business from a different perspective. But you have to be able to pick the right metrics, implement measurement techniques that will provide consistent information, and be ready to analyze and act on that information.

What to measure first?

By the way, in our experience, the simplest metric to measure also provides one of the single best indicators of company health.

Shift this metric and revenues, employee job satisfaction, and even profitability will be directly affected.

What is this magic metric?

It's the number of times each quarter that your CEO meets with clients.

Thanks for reading!