Metrics: Designing a Metrics Dashboard for the Sales Organization
Metrics: By Mike Rose, Management Consultant.
Metrics can serve as critical measures of success for any organization and, in particular, the sales force can benefit immensely from an understanding of how to identify and track these quantities in a meaningful way.
The primary objective of the metrics dashboard creation process is to identify and implement key performance measures and indicators that will enable managers to quickly and effectively manage the sales organization. This can be accomplished through selecting metrics that support sales objectives, strategy and goals.1 Some of the benefits that will result from implementing the dashboard include:
Gain a deeper understanding of the drivers of sales productivity
Identify where management action is required to improve sales productivity and effectiveness
Develop a common vehicle for monitoring and improving performance
Understand sales performance from a variety of perspectives
Build consensus on key performance measures and drivers
Clarify accountability around specific measures
Enable performance benchmarking with competitors and best-in-class companies
Corporate vision guides the development of an organization’s sales objectives, strategy and tactical goals. Metrics are in turn driven by sales strategy and goals. At the tactical level, metrics serve as the primary vehicle for managing performance within the organization. Targets are set for each metric, performance is monitored and interpreted to provide timely feedback and corrective actions are initiated (see Figure 1).
Figure 1 But which metrics should we choose? The sheer abundance of metrics creates a situation in which it may be difficult to properly identify metrics that make the most sense. In answering this question, the first step is to create a framework in which all the available metrics may be organized and prioritized. This framework consists in two dimensions; first, a corporate perspectives dimension and secondly a sales performance dimension. The corporate approach takes a 360 degree view of the organization from five distinct perspectives: customers, employees, partners, investors and internal processes. This approach is typically utilized in the so called “Balanced Scorecard” approach.
Each of the corporate perspectives should be examined and appropriate individuals identified to provide a list of metrics. In addition to the corporate perspective, a sales performance dimension must also be included. This breaks sales performance into four elements: readiness, productivity, efficiency and effectiveness. Below we define each of these elements and show a few examples.
The key to the metrics identification process consists in both fact-finding and identifying metrics as well as categorizing metrics according to the above two dimensions, corporate perspective and sales performance. This basically involves the creation of a matrix with these two axes which then may be populated with metrics collected through the fact-finding process.
Dashboard Design Process
The dashboard design process consists in metric selection, design and implementation. Each of these steps involve some basic principles outlined below.
Supports stated objectives, strategies and goals
Can be directly impacted by sales management
- Can be measured in a cost effective and timely fashion
- Reflects one of the four key dimensions of sales performance (readiness, productivity, efficiency and effectiveness)
- Enables performance benchmarking with industry competitors and best-in-class companies
Dashboard Design Principles
Reflects senior management priorities
Balances internal and external metrics
Includes measures of past performance and indicators of future performance
Minimizes the number of metrics in order to facilitate management interpretation
The actual design process is outlined below along with the detailed steps involved.
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