Archives for posts with tag: Metrics

I realise that are two ways you could interpret the title of this blog post. I don’t mean that the good ones want to be measured in their approach, in other words, considered, careful, circumspect, even though that might be a good thing in many situations. I mean that they want to be measured, by us.

Good sales people are confident in their abilities and want to be measured. The better measured they are, as long as the system of measurement is fair, the clearer their effort is, the better they sell, the better they’re rewarded.

The less good don’t want to be measured, or want to be measured less. The less they’re measured, the more they can hide in the grey areas that are equivocal and open to interpretation, wiggle room and excuses. Same for marketers too.

If you’re hiring sales people, and you know you have a product that sells well – not that you can sell well, that other people can sell well – look for the ones that want to be tied down to targets and measurements. They’re the ones who want to see their progress, be judged accurately on their efforts, and be rewarded accordingly.



In sales, there is a lot of complexity. A lot of moving parts, a lot of scenarios, a lot of things to measure. If you can’t measure, you can’t manage, so how to make sense of the data onslaught and focus on the really important stuff?

I used to work with a company called The TAS Group, who invented something called The Sales Velocity Equation to help with the problem. In this equation, anyone in charge of sales needs to focus on – and measure – just four things to get a sense of how successful their sales efforts are, and whether they are improving or not.

The four levers are the number of qualified opportunities your team works in a given period, the average deal size of the deals you win during that period, your win percentage, and the length of the sales cycle of all qualified deals before you win or lose them.

Your sales velocity – which is a measure of how effectively you sell – is a function of the top three levers multiplied by each other, divided by the all-important factor below the line, the sales cycle length. This gives you a dollars per week, month – however you measure your sales cycle – for a given period.

Consistency is the name of the game with this. You may know that I’m a big fan of consistency. You must be consistent in how you define the period (I recommend looking over at least a quarter) and in how you measure a qualified opportunity, otherwise you’re comparing apples and oranges. If your sales velocity increases from period to period, you’re selling more effectively. If it decreases, less effectively.

The key is to have an iron grip on your sales process and your sales cycles, because time is a killer and that factor below the line can kill all your good work elsewhere.

You can read more about this important topic here and here.

I was looking at a presentation the other day on 50 digital marketing metrics for CMOs, CIOs and other CXOs.  It was by a pretty stellar CMO who’s especially active on Twitter. It really was very thorough, a great piece of work. What I found odd, though was that only a couple of the 50 metrics focused on the sales side of the funnel.

Only this morning I was talking with a senior director of a globally renowned BI company about the divide that exists between sales and marketing, principally because the two areas – which should be joined at the hip – were judging success differently. One area saw a high volume of leads as successful, the other saw the lack of quality pipeline as unsuccessful. You see this gulf in many companies. I’m sure you’ve seen it in companies where you’ve worked.

To return to the marketing metrics presentation: the success of demand generation is in the amount of business that results from an activity. You should break this down further into 3 key metrics that have a direct bearing on the success and wellbeing of the entire company:

– deal size. What is the average deal size of a lead from a marketing activity that became an opportunity? What is the average deal size for the opportunities that you won? Some marketing activities will generate bigger average deal size than others.

– win rate. What percentage of the qualified leads did you win that were generated by marketing activities? What percentage of the qualified opportunities? Some marketing activities will generate better close rates than others. This tells you about the quality of leads you create, and the quality of your qualification process from lead to opportunity.

– close cycle. What was the average total elapsed time from lead creation to closed deal? From lead creation to opportunity creation? From opportunity creation to deal closure? Some marketing activities will generate faster close cycles.  Speed is of the essence when you’re trying to grow the business.

You have to tie marketing efficiency forward – not back – to revenues.  Better to focus on a few metrics that measure sales + marketing than 48 that measure marketing alone.