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Metrics, It’s All Relative

by David Brock on April 20th, 2011

A couple of weeks ago I wrote a piece, What We Miss About Sales Metrics.  In some of the discussions around that piece and in a number of separate discussions I’ve seen around the different sales communities, I’ve been amazed at some of  the “zealotry” around metrics.

There are a number of people, some self proclaimed guru’s, spending a lot of time about “the right metrics.”  The suggestion is that there is only one way a certain metric should be measured, or certain metrics are mandatory, or….. 

It may be my stubbornness or my resistance to follow the “rules,” but discussions of “absolutes” or “mandatory” tend to rub me the wrong way.  Science long ago determined there are really no absolutes–that everything tends to be relative.  It’s curious that we try to apply right, wrong, and absolutes to what we measure in sales.

The majority of metrics we track in sales are focused on how much we’ve changed or how much we’ve improved.  We track year to year revenue performance and focus on growth.  We track sales cycle time and look at how much we’ve reduced it, we look at win rates to see how much we’ve improved.  We look at productivity to see how much we’ve improved.  Yest we do have some absolute measures—we have revenue or quota targets, we may have number of completed calls per day, or others.  But for the most part, as sales managers, we want to look at progress, change and improvement.

So it seems you can choose almost anyway you want to measure something, and as long as you keep the measurement methodology the same, you can track improvement.  So, for example, if you are tracking win rates, you might track percentage of proposals that you win.  Alternatively, you might track percentage of deals that you qualify that you win.  Either is a valid measurement,  some might argue strongly for one and an equal number would argue strongly for another, and there will be still others that would argue strongly for at least 3-5 more ways of measuring win rates.  But they all seem relatively unimportant to me.  What’s most valuable, it seems, is to choose one—any one, and track it rigorously to see if you have improved.  Have you take a 70% wins/proposals and moved it to 80%, or have you taken a 50% win/qualified and moved it to 60%?  What important is the change, not the absolute measure.

Yes, there are some measurement approaches that may give more insight into specific issues than other similar metrics.  There are some that may be better to use in certain situations and others for different situations.  Yes, with any of the metrics, you can play games, perhaps trying to make yourself look better than you really are–but if you stick with the same metric over time, it’s pretty easy to see through that.  The biggest game we play with metrics is to completely change the way we measure–so that we can’t easily track the change or improvement.  Another big game is never declaring the measurement methodology, so  we each come to the table thinking that we are talking about the same thing, but we really measured it differently—win rates, sales cycle time, share, are all some of the favorite victims of this approach.

But to declare “there is only one right way,” seems to be a little silly and misguided.  Having a solid and consistent way of measuring key areas of performance–regardless of the measurement methodology is more important in driving sustained performance improvement.   Perhaps I’m a little too simplistic, but I tend to think:  Pick what you want to measure, determine how you are going to measure it, set a goal to see how you are doing, look at changes and improvmennt over time, and be consistent with the measurement methodology over time so you are tracking relative change consistently. Almost any way you choose to do it can be very helpful, as long as you are focusing on, “are we improving?”

Why make metrics more difficult than necessary?  Am I missing something?

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