SCALE UP SALES MANAGEMENT

With Sales Management Metrics-you can Make Magic

Today’s Tale: the Tarigo Team share their secrets of success.Make sure you measure both the Right Thing and the Thing Right. Measure what matters. Only what matters. No more. No less. Just get going. Then add new metrics when what matters changes.

by Tarigo Chairman, Stephen Allott, with Tarigo Founder & CEO, Garry Avery. Special thanks to Nick Brown, Stephen’s ex McKinsey colleague in London. Team mates with Nick at McKinsey since 1990. Hired Garry at Micromuse in 1999. That’s 35 years with Nick and 26 years with Garry. Top top talents.

EXAMPLE TARIGO WEEKLY FLASH REPORT

Use the Right Dashboard. Win the Market.

Junk the Just in Case. Jive on the Just in Time.

Here is how to use Just 5 questions to Jump to the Front.

Look forward. Less is more. Fewer is simpler. And better. The way to win is to look forward. You can’t win by looking backwards. Not even month on month. I just don’t understand how people use a long list of monthly SaaS metrics to make their numbers if they don’t have a forecast of whether they are on track or not. If you are on the Titanic heading for that famous ice berg, you can only avoid it by looking forward and steering around it. You will hit that berg if you are looking backwards. You will hit that berg even if you are using hundreds of super sophisticated backward looking SaaS metrics.

Start with 5 metrics. Our Tarigo Tale explains our simple method to pick exactly the right metrics for you. No more. No less. You can then customise your dashboard for your personal situation. What are the right metrics for you? People also call the right metrics: “key performance indicators” or “KPIs”. Many people start with a common SaaS set of monthly metrics such as ARR, revenue retention and CAAC. And that is a good place to start. But what metrics would a blackbelt use? A one product company CEO supported by strong finance and sales operations teams will have a rich suite of metrics. What can a product manager learn from a CEO?

Building your Dashboard 1.0 — what metrics should you start with?

Tarigo Product Management Training define 4 different types of metrics:

First, start with the things you already know are important. They can include: -

• Numbers that have always been important in this business
• Critical goals from your strategy or planning process
• Things you know from experience are useful to measure

Second, monitor your strategy or growth plan milestones to check you are on track.

Third, Use Tarigo “Decision Engineering”, to design your metrics. Start with the management decisions that you take regularly and then identify the metrics or information do you need to have in front of you to make the highest quality decisions?

My great and lifelong McKinsey friend Nick Brown invented “Decision Engineering” in 1992 while working on a gas client. Nick and me used to walk to and back from Clapham South Tube station in London. I often asked Nick for finance advice. Lean, confident and good looking, he was a super polished and precise accountant hired into McKinsey from Coopers & Lybrand. With a dgree in Mathematics from St John’s College, Cambridge University, Nick was one of several accountants hired as part of a big programme to sharpen up the McKinsey London Corporate Finance Practice. McKinsey London had hitherto almost exclusively recruited MBAs at entry level from Harvard, Stanford, Insead and London Business School, Nick was part of an experimental Experienced Hire program which cast the net more widely.

Dominated by accountants, they also hired that year some FMCG marketeers, a doctor, a civil servant and me. McKinsey placed an ad in the paper saying they wanted to hire a lawyer into a mainsteam strategy role. I joined as an Associate, like Nick, in the same core Strategy Consulting track as all those MBAs. After reading law at Trinity College, Cambridge University, call to the Bar and practice as a commercial barrister, I had moved into in-house legal roles at Xerox and Sun Microsystems. As Sun UK Legal Counsel, I was the first in-house lawyer hired by Sun outside the USA. A big job. I had aced my Maths, Physics and Chemistry “A” levels and Physics and Chemistry “S” levels all at the highest grades. I had aced the written McKinsey maths entry test. I could do maths. But I knew nothing about finance nor accounts. And had never, aged 32, used a spreadsheet. Now at McKinsey, I had a problem. So I turned to Nick Brown. From St. John’s. Next to my college, the great Trinity College. the leader in maths at Cambridge. And which had studied maths since the year 1209. Nick was and is nice. He helped me. Thank you Nick.

Back to those metrics.

Fourth and finally, there are things that become important along the way even though you did not appreciate their importance at the outset. Tarigo call these Just in Time Metrics. Don’t bother with designing Just in Case Metrics. If no-body uses a metric for a decision, delete it. Use it or lose it.

Use a configurable metrics dashboard that is easy to build, easy to share and easy to comment on. A shared Google sheet is a great prototyping tool. Other dashboard tools are

• Google Data Studio: Free tool for creating customizable dashboards with Google Analytics.
• Tableau: Flexible data visualization software.
• Power BI: Robust analytics tool suited for business intelligence.
• Looker: Cloud-based platform focusing on business intelligence and analytics.

You are now in the driving seat but make sure it’s right for you.

Winners keep asking these 5 questions:

• Are we going to make our numbers?
• Are our tactics working?
• Are my specific growth initiatives / experiments succeeding or failing
• Do we need to change something? Or do we just carry on?
• If a change is needed or what is our initial hypothesis for what needs to change?

Different industries and different products need different metrics. A car business and a database business are different.

Even identical businesses can have different growth motions. Fashionable Product Led growth has joined the more traditional Marketing Led and Sales Led motions. You can mix and match all three and use tools from Danish company, Dreamdata, to create holistic revenue attribution data.

Winners measure the Right Thing as well as measuring the Thing Right

Measuring the Right Thing means measuring things like leads, sales and customer reference-ability. The Right Thing will vary by each function in the revenue cycle. New Business Sales, Implementation, Customer Success, Account Management and Renewals each have their critical measures. For sales it’s about hitting the target. Implementation is about getting it into production. Customer Success is about realising the projected Business Case ROI. Account Management, like Sales, is about hitting the target and saturating the account while Renewals is about retention.

Your strategy or quarterly plans will all have business improvement initiatives. Entering a new vertical market, entering a new country or testing a new lead gen or sales process are all examples of an initiative. The Right Thing is to measure the success of your initiatives.

The Right Thing to measure will vary by category maturity and market share. Pioneering a new product category where you educate the market that you have a solution to a previously unsolved problem is very different from entering an established market with a low-cost competitor. A market leader measures their performance differently from a challenger. Our “3 Act Drama” model explains how the game changes in each Act of the Drama.

Winners constantly want to know whether they are On Track to Win. Knowing what has been sold is different to getting a sales forecast. The question is Are we going to make our numbers? Tarigo advise adding the bookings made to the value of deals forecast still left to close to produce our favourite metric: the Outlook. This is the Past + the Future. It is the prediction of whether you will make your plan. Measuring the thing right means predicting the future on top of recording the past.

Another aspect of measuring the Thing Right is the measurement interval. When are quarterly targets best and when are monthly targets best? Even annual or weekly targets might make sense in some cases. Modern SaaS theory stresses Future vs Past monthly growth rate metrics. That can make you quite passive as you watch the business grow. On the other hand, striving to hit a quarterly target will drive innovation and effort. Popular KPIs for SaaS include Monthly Recurring Revenue (MRR), Customer Acquisition Cost (CAC), Customer Lifetime Value (CLTV), Churn Rate and Net Promoter Score (NPS)

Getting the Thing Right can mean metrics will vary by product type. Hardware, SaaS software, Enterprise software and Services may all need different metrics. There is a full discussion of how to keep score in SaaS software in this Sales Tale.

While Business is more about the money while Products are more about the customer, Business management and Product management can be very close. Design your metrics to win.

Tips

At one of our clients, the CEO weekly whiteboard tour visited each department for a 30-minute standing review around their KPI whiteboard. We used thin black tape to create neat lines on the whiteboard. Numbers were written up in pen. All the team gathered around for the presentation and discussion. Best practices of winning teams included

HAVE PURPOSE

1. Adopt a Customer-Centric Approach:
2. Balance Quantitative and Qualitative Metrics:
3. Align Metrics with Business Goals

INCREASE PACE

1. Utilize Real-Time Data:
2. Establish Benchmarks:
3. Prioritize Actionability

RAISE YOUR GAME

1. Regularly Review and Iterate:
2. Involve Stakeholders
3. Use Cohort Analysis for performance comparisons

Let me know how you get on.

Further Reading

Mind the Product: This platform publishes various articles written by product management experts. Look for pieces related to defining KPIs and actionable metrics.

Roman Pichler’s Blog: Roman Pichler is a renowned author and expert in product management. His articles often cover metrics and KPIs in the context of Agile and Lean methodologies.

Harvard Business Review: HBR contains several articles on the importance of metrics in business management. Search for articles that discuss performance measurement and strategy.

“Measure What Matters” by John Doerr: This book is a great resource for understanding OKRs (Objectives and Key Results), which can be applied to KPI design.

Product Coalition: This online publication features numerous articles on various aspects of product management, including KPI development.

Industry Blogs and Whitepapers: Websites like ProductPlan, Aha!, and others often provide in-depth guides and whitepapers on product management KPI design