Our quarterly magazine focuses on the Truth in Sales and Marketing. As marketing and sales leaders, we tend to be overly optimistic and feel “We will make it happen.” However, we have experienced that often we shift to “We have to make it happen because we have over-promised and over-committed to hitting our numbers.”
It is not that we intentionally lie, but we believe in our team’s ability to achieve their goals. In addition, we are asked to push the limits since we are leaders in our organizations. In this article, we will focus on the hard reality of being honest with ourselves and how to track factually instead of emotionally. It’s very simple, you can get to the TRUTH, without the feeling of over-extending yourself.
Staying aligned with your board members, investors and executive team is the key to your success as sales and marketing leaders. I will never forget asking a CRO during one of my consulting engagements what were the top 3 KPI’s he was responsible for? He went on for 90 minutes and still could not describe the top 3. I stopped him and said the first thing we need to do is have alignment on your top 3 KPI’s so we can report quarterly on the truth and what we are doing to hit those KPI’s. After spending time with his Private Equity firm and CEO it was very clear.
- He would be evaluated on quarter-over-quarter ARR bookings in growth,
- CAC (Customer Acquisition Cost) – total sales and marketing resources associated with acquiring a new customer,
- hitting his number of $52 million.
I know, it seems simple, however, he wasn’t clear and therefore misaligned.
How to Track Truthfully to Your 3 KPI’s?
We spent the next 60 days putting in-place the right tools to track his 3 top KPI’s. We needed to make sure our reporting package aligned with tracking the ARR, CAC and the on-going tracking to insure he hit $52 million.
To make this happen we collaborated with the marketing team, sales team, CFO and others within the organization to make sure we had alignment of the right data, tools and resources to be able to report back truthfully on how we were tracking to those KPI’s. It wasn’t that he was lying; however, when you have bad data and misalignment of KPI’s it can look like you are dodging questions when put on the spot. Then when you miss numbers it looks like you had misrepresented your data. His board meetings became much more focused and accurate. More importantly, we could use the metrics to manage his team to hit the KPI’s!
Tools and Resources Utilized
We used the organization’s ERP, CRM and Marketing applications to derive data that was one source of the truth. We created dashboards in the ERP system and optimized the CRM system to display and track all 3 KPI’s – month-to-month and YTD. Yes, it was painful to set-up; however, it was much more painful to not be right. We could make changes rapidly and when we noticed trends that we needed to fix, we could make adjustments quickly. In addition, the cost of sales went down and revenue growth increased.
As you can imagine, the CRO increased his attention on the 3 main KPI’s that were always visible to all. He used to spend time on too many things outside of his scope that we actually termed C-Priorities and those were only worked on if the KPIs were being achieved. Simply put, before defining the top KPI’s he would waste time on many tasks and activities that really at times did not matter in the big picture. He started to have a bigger impact and more importantly had the accurate data to track/present.
In this article and others, we presented some hard-hitting facts on sticking to the truth. If you have alignment with your board, investors and executives and track all your KPI’s factually instead of emotionally, the truth is much easier to present. More importantly, this will allow you to not have any surprises quarter-to-quarter.