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April 23, 2010

Fish Story

I just returned from a short visit to the sport fishing capital of the U.S., a place also known for its limes. We were pretty much the only ones at the marina hiring out a boat and not taking fishing poles along. Our preference is to catch fish on camera while paddling along with the aid of a snorkel rather than the use of a hook. However, the whole fishing thing got me thinking.

When we return from a vacation we all invariably get bombarded by co-workers and friends with the same necessary question – “how was your vacation?” And this polite behavior requires that we have to have an answer, and mine is always based on how much enjoyment I experienced. So for me, when it comes to skin diving, the criteria for success is measured by things such as the number of unique fish I got to see, or the quality of underwater pictures I managed to take. So, my answers to these inevitable inquiries include things like – “Great, I got to see my first school of spotted eagle rays!” Then, the fishing thing came back into my head and I thought, if I had been fishing I would rate my vacation on how many fish I caught or how big of fish I caught – such as my co-worker’s sister who landed a 7 foot sailfish! That is a serious success.

But then my warped mind kept pondering this and I wondered if I would rate my fishing vacation on something like how many times I cast my line into the water. Yes, I know this sounds pretty weird. And what is even weirder is that I then pondered the connection between fishing and selling, or, more specifically, the comparison between the measurement of fishing success and the measurement of selling success.

No. Fishermen and fisherwomen do not measure their success on the number of casts unless the measurement is something like how many strikes they get per cast. Otherwise it is all about snagging the fish on the lure.

On the other hand, there are quite a few companies that think it makes sense to measure how many sales calls a rep makes – the equivalent of the fishing cast. For the most part I think this is a mistake. If we measured fisherpersons on their casts, they would be motivated to drop the hook into the water as many times as possible, which would drive bad fishing behavior. They might not reel in the lure correctly, or leave the bait in the water a sufficient time to attract a fish. Maybe they would throw the line in the water too close to shore so they don’t waste time puttering out to the right fishing hole. Rather, the measurements need to be fish strikes, fish brought to the boat, and whether the fish is a keeper.

My point in all this is that we need to measure sales folks correctly. While measurement has to be focused ultimately on the deal (how many keepers did you get), it can also be focused on whether they are using the right bait or fishing in the right spot. But measuring how many times they cast the lure into the water is truly a weak measurement.

If we have a good set of pipeline stages defined, we should be able to know what sales activities are needed to advance a deal. We should measure whether those activities are performed and whether the sales stages have advanced. Those are great measurements, just like how many strikes and how many fish make it to the boat to the type of bait used. The number of casts just doesn’t get us very far. It would be as if we did not trust the fisherperson to fish enough – maybe we suspect they are just sitting in the boat and drinking beer.

OK, there are exceptions. A green sales team may benefit from this monitoring. Sometimes sales visit targets for certain segments can help change call behavior so that higher value customers are being called. But these are limited situations and we should only wield this kind of measurement for this type of circumstance and for a limited duration. Otherwise, setting sales call volumes and measuring against those targets is fairly immature measurement approach.

So, yes – thanks for asking - my vacation was pretty good, and I did get to swim for a while with that pack of rays. It ranks below the outstanding trip where I dove with the 5 foot long leatherbacks one day and saw my first feather duster the day before. But, it ranks above the so-so trip where the water was murky and the only interesting fish were hungry barracuda.

Now, go catch some fish – you decide if you use a rod or a camera.

Wild Gills

April 02, 2010

Early Warning

I uncovered my boat this week, took off the winter blanket and brought my means of summer therapy out of winter hibernation. Hope springs eternal for me when I perform this annual ritual over the course of the first nice weather weekends of the vernal season. In addition to that first-of-the-year admiration of one of my great sources of enjoyment, I also do a quick overview of how the many different elements of the watercraft faired during its long winter nap. First is a quick glance at the winter grime followed by an examination of the different chafing spots from the cover. Then there is the look into the galley and head to see how things fared in the cabin. My biggest hope is that a raccoon family has not made a home in my vessel.

Eventually I’ll check out all the electronics and mechanics and make sure that everything is in working order before we drop in the ocean. This beginning of the season ritual also brings along memories from the past summer. Barbeques on the beach, watching fireworks afloat, outrunning thunderstorms – these are all the things that make the boating life so much fun. As I was looking over the helm I glanced at the depth gauge and was reminded of one particular trip coming back from a mid-summers dinner celebrating my daughter’s 18th birthday.

There was no moon that night so the trip back to port, following a long stretch of bird sanctuary, was a dark ride with no beach-side houses or businesses to light our way. Eventually this dune-scaped island turns a corner and our harbor appears out of nowhere. However, this presents a challenge as a constantly shifting set of sand bars protects the entrance to the harbor. At night it can be quite a challenge entering the harbor safely, especially with no lunar or artificial lighting. This is where the depth gauge becomes so handy.

When you keep your eye on the up and down movement of the numbers you get a great sense of what is below you, and, if you keep the speed in check, you can tell in advance if you are about to run up onto some undesirable sand. The depth gauge serves as an early warning system – a set of eyes on the bottom helping to keep you clear of an unpleasant journey’s end. On a boat the helm is like the dashboard of a car, and my number one dial on that dashboard is the one that tells me how much water I have below my propellers.

Hydro Therapy

There is a lot of talk about dashboards in the CRM industry these days and, in theory, they should perform the same function as the one on your car or on my boat – help to make sure we steer in a safe and correct direction. But, not all dashboards are created equally. The problem with most of the dashboards I see is that they don’t necessarily measure stuff that helps you steer – they mostly measure stuff about where you have been instead of where you are going. Just like my depth gauge, the most important dial on a CRM dashboard is the one that provides information to keep you on the right direction – especially a direction that keeps you out of trouble. This would be the early warning system.

When it comes to sales, I think it is great to know how many deals you close and what your close rate is. But if you want to steer the boat safely you also want to know what is in the pipeline. If you track the number of deals at early stages, monitoring the conversion rate, you will know if you will make the number at the end of the quarter, before you get to the end of the quarter. If you don’t have enough deals at stage 2 to fill the rest of the pipe, this is your early warning indicator. It means you need to pull levers that drive more early stage deals. This drives up your chance of being successful when the quarter end measures are made.

Marketing has early warning indicators too. For example, you don’t want to finish a campaign before you learn if it is generating leads or not. You need to measure lift early to know if this is a campaign to keep running. More importantly, we want to know if the leads being generated are moving through the pipe effectively. Good dashboards need to look at the relationship between campaigns and opportunity conversion to ensure that we don’t invest in campaigns that don’t pay off, just like we don’t want to run the boat up on a sandbar.

The services function needs its own early warning system. The last thing we want to find out is a poor customer satisfaction rating due to customers being dissatisfied. That may sound crazy, but there are indicators that will predict the possibility of poor satisfaction before it has to happen. Let’s monitor those and take action before we see a drop in satisfaction ratings.

Are you looking at the right dials on the dashboard? Do you even have the right dials on the dashboard? I had a boat without a depth gauge once. It was risky business. A good CRM dashboard needs to have the right stuff in place to make sure you aren’t driving by looking through the rearview mirror.

Stay off of those sandbars!