Episode E.010 Measurement Drill Down

Marketing has 2 prime objectives – Create Brand Awareness and Produce Qualified Leads for the sales funnel. Creating Brand Awareness is outside of the Balanced Scorecard approach and measured by conducting a yearly Market Study. 

Once our Marketing efforts has Created Brand Awareness, the focus of measurement is on moving Qualified Leads through the sales funnel:

• Frequency of Contact - how often do we reach out and touch prospective customers (qualified leads) with new information that provides value – this measurement is used to determine how many touches are required to initiate action by them;
• Open Rate - what percentage of our outreach efforts are opened (read) or reach prospective customers - it measures the power of an email subject line or the title and graphics of a social media post, actions taken from an outreach to potential customers;
• Balance of Communications - what is the balance of contacts initiated by us and initiated by our target customers; used to measure the quality of your leads list and the power of your ad copy.

​Sales is a more complicated subject than it appears. Everybody knows it is all about revenue – but is it? Starting with measurement, what is the ultimate result you seek? Given the demands of daily business operations, most business owners focus on revenue in the door and not money at the end of the day - margin per sale.

We understand the emphasis of making money now but its pursuit masks some serious problems. How many of these sales were obtained by special deals, discounts, etc., efforts to close something today that leaves nothing in the cash box after paying the bills? Our experience is margin per sale drives the right long-term behavior from both the sales force and management. Both need to hold the line on cost of acquisition and maintain price integrity. It is only by measuring it can you get your arms around it; you can only manage what is measured.

There are three drivers or causes for achieving larger sales margins:

• Close Ratio - percentage of closed sales to qualified leads - used to determine how many leads are required to meet revenue objectives;
• Time to Close - the amount of time between starting the sales process and closing the deal - used for sales forecasting;
• Average Sales Price - the average sales price per product, service, project, etc. - used to identify the level of price integrity.

Service is not a random act of kindness, it is a function of sales. This is not a common belief in business and that leads to a real competitive advantage for the few who can execute. The real objective of service is to transform satisfaction into enthusiasm for your company and offer, and to grow the amount of customer budget you own. Do you currently have 100% of their budget for the products and services you sell? Your Service relationship with existing customers will determine how much of their business is kept in house.

There are three drivers or causes for achieving Top of Mind (their first choice) and creating customer loyalty:

• Deliver on Promise – on-time, right first time delivery - used for establishing a reliability score, it is the only thing that matters until you fail;
• Recover from Failure – consistently dealing with unhappy customers because of unreliable delivery - when you fail does the customer feel like they have won;
• Front Line Authority – the existence of clear role descriptions that ensures authority equals responsibility - recovery must be handled on the spot by intelligent and caring people, not the owner or management.