Measurement is just great. A wonderful way for supervisors to hang staff. Or managers to hang supervisors. Or senior managers to hang managers. But the most wondrous thing of all is that those “hanging metrics,” as often as not, convict the innocent and exonerate the guilty. Especially in companies attempting to improve customer-alignment.\n<\/p>\n
\nWhy?\n<\/p>\n
\nSimple. You’re trying to do one thing while measuring another. While you’re trying to realign around customers, you’re continuing to apply traditional metrics that reward interfering behaviors while penalizing positive ones.\n<\/p>\n
‘<\/span>Any business process that creates conflicts with customers’ preferences instead of resolving them is inherently counter-productive.’<\/span><\/p>\n<\/div>\n <\/p>\n Consider a B2B company my firm worked with recently. Marketing generates lots of sales inquiries through the web, print and trade shows. And that’s marketing’s lead-generating metric: inquiries received. End of accountability—but not the end of responsibility. Marketing has to assign inquiries to either company reps or partners and distribute these raw inquiries. And marketing even makes a feeble attempt to track outcomes by sending out a computer printout monthly and asking for sales feedback.\n<\/p>\n \nThere are no sales results to show for any of this, but that’s not marketing’s job. Sales is responsible for closing new business. But it’s not accountable because there’s no data measuring close rates or even contact rates. Because most of these inquiries are crap, including some from inquisitive competitors, most company sales reps deep-six them. And no one knows what happens with inquiries assigned to partners, but we can sure guess. Sales reps get bad raps for being “uncooperative,” and partners get bad-mouthed for not being team players. Swell.\n<\/p>\n \nWhat’s the right<\/i> way to measure sales lead-generating programs?\n<\/p>\n \nStarting with the inflow of inquiries (how<\/i> to best generate inquiries is a whole other, very important discussion), here’s one model. It’s an approach taken by Performark, one of several quality, third-party, lead-management firms out there that happens to be a long-time client of ours and has assisted our own clients.\n<\/p>\n \nFirst, you realize you’re not dealing with marketing’s process or sales’ process, you’re dealing with customer<\/i> process—in other words, how customers want to buy. And any business process that creates conflicts with customers’ preferences instead of resolving them is inherently counter-productive. So you don’t go anywhere customers don’t want to go.\n<\/p>\n \nNext, you respect the reality that adding new value to customers is an essential first step to adding value to the company. Accordingly, you design the lead-management process, itself, to deliver value to customers.\n<\/p>\n \nBut beyond these important, but “soft,” goals, you measure hard numbers. And one dwarfs all others: the ratio of profitable revenue gained against expense required to generate new revenue. We commonly call this cost-per-order, or “CPO.”\n<\/p>\n \nSeems an obvious thing to do. Why don’t more companies focus lead-generation measurement on CPO? Resistance.\n<\/p>\n \nUnited<\/b> \nOn a management level, though, when you start integrating marketing and sales, you raise the specter of two management jobs becoming one or a peer relationship becoming a reporting relationship. Therefore, CPO measurement becomes, more than a goal, a change agent that requires functions to swallow hard and do what’s right for the company—and the customer. Enacting this type of change requires strong corporate leadership.\n<\/p>\n \nBut CPO is a “lagging” metric. You don’t see outcomes until after the fact—and after potentially wasting lots of money barking up the wrong trees. You’re also going to need “leading” metrics: process outcomes predictive of future success. That’s why Performark applies a number of different interim measures, each of which dictates specific process steps, and each of which generates more points of resistance:\n<\/p>\n \nOut of one measure come many. And from one point of resistance spring multiple points—which brings to light a terribly important concept:\n<\/p>\n More often than not, implementing measurement drives significant process change; and implementing process change creates resistance to change.<\/i><\/p><\/blockquote>\n \nBut more than a few companies are finally getting past the “resistance” phase and making the process changes required to enact appropriate measurement tools. And for you, I suggest the following leading and lagging measures for sales lead-generating activities.\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"Measurement is just great. A wonderful way for supervisors to hang staff. Or managers to hang supervisors. Or senior managers to hang managers. But the most wondrous thing of all is that those “hanging metrics,” as often as not, convict the innocent and exonerate the guilty. Especially in companies attempting to improve customer-alignment. Why? Simple. 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\nMarketing and sales quickly realize they’re going to have work as one to generate maximum CPO. Marketing will have to send only qualified, ready-to-buy inquiries to sales, otherwise sales follow-up costs for pursuing “tire kicker” prospects will go through the roof. And sales is going to have to follow up these inquiries, or there’ll be no revenue to track. Plus, sales will have to report back sales outcomes, so marketing can track inquiries generated by different channels, specific media outlets and different messages—enabling marketing to kill non-productive stuff and invest in what’s productive.\n<\/p>\n\n
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\n <\/td>\n Common Measurement Criteria<\/b><\/td>\n More Appropriate Measurement Criteria<\/b><\/td>\n<\/tr>\n \n Marketing<\/b><\/td>\n \n \n
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\n Sales<\/b><\/td>\n \n \n
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