8 metrics to unlock peak performance
Tracking tools can change business development behavior and boost revenue
- By Bill Scheessele
- Aug 02, 2010
Bill Scheessele is chairman and chief executive officer of MBDi, a business development professional services firm.
During demanding times in an industry going through transformation, the focus must be on performance improvement if you’re attempting to grow revenue with a leaner organization. Strong business development plans and processes can only drive an organization so far. The spotlight must be on your people if you want to meet revenue objectives on a reoccurring basis. You cannot manage what you do not measure.
Many executives want to know whether their sales team is competent and who are their best and worst performers. To answer those questions, management can benefit by assigning appropriate key metrics to measure their revenue generation teams. Considerable attention should go into the behavior executives want to encourage and then develop appropriate business development metrics to drive that specific behavior. Those metrics will not be the same for every organization.
Implementing metrics into your business development organization’s processes can serve as the catalyst for change management, performance improvement and revenue growth. Measuring the health and effectiveness using business development metrics establishes a culture that demands improvement and accountability by making performance visible and thus subject to change. They also can be a useful tool in performance appraisals.
All metrics can be measured as a function of the organization unit, business development team, proposal team, geography, customer, market or other set of interest. After you decide which of those fits your organization and warrants tracking, you can begin graphing the resulting metrics per unit of time. Then use the information as the vehicle to foster changes in behavior to improve the metrics and reach the level you believe is appropriate for your organization.
Establishing metrics to assess your real effectiveness in developing business requires that you decide what you want your sales model to look like so you measure the appropriate attributes of your performance. Then compare the cost and results of your team’s behavior, as to what you expect, to that of your competition. Those comparisons provide a good road map for the metrics you need to retain to evaluate your performance and effectiveness and optimize your behaviors to ensure team success and company revenue growth.
Even though cost is one of the first metrics most selected, consider trying to collect all of the cost components and continually improve on them. That requires you know the cost of generating a lead in addition to the value of subsequent leads. Agreeing to the definition of costs and potential value of each lead will be a challenge to define and is the first step in deciding if you are ready for the metric. The overall cost to your organization to identify leads, converting leads to opportunities, proposing on those opportunities and winning the business are all examples of metrics, which could ultimately lead to improvement goals, thus increasing your efficiency in developing business.
Some examples of general business development statistics that can be used to positively affect revenue growth via performance improvement are:
Cost to generate leads.
Cost or volume processed to qualify of disqualify from leads to opportunities.
Pipeline volume: total leads vs. qualified opportunities.
Cost or volume of opportunities processed into proposals.
Average size of opportunity identified.
Average proposal submitted value, win value and loss value.
By using metrics in conjunction with a strong opportunity identification and qualification methodology based on gathering valid intelligence as essential components in your business development, capture and proposal process, you can promote change, encourage performance improvement and ensure revenue growth. In this constantly changing and challenging environment, business as usual is not an option. You are either improving your metrics or going out of business.