Metrics (also called Key Performance Indicators) are what you use to measure the performance of every functional area of your organization; the things you do every day to create leads, make sales, provide your products and services, keep your customers happy, grow cash and make profits. We call this stuff “Business As Usual”. Once you determine the Metrics for every functional area, you should be able to distill a smaller subset of Metrics that you deem to be “critical success factors” - the most important drivers of your current operating model.

1. Metrics That Matter
Best practices based on research and 20+ years of real-world
experience helping clients execute their strategy and win!
Presenter: Stephen Lynch
Role: President, Head of Strategy at RESULTS.com
Linkedin: linkedin.com/in/stephengeoffreylynch
Slides: results.com/slides
Software Demo: results.com/demo

4. Metrics That Matter
Best practices based on research and 20+ years of real-world
experience helping clients execute their strategy and win!
Presenter: Stephen Lynch
Role: President, Head of Strategy at RESULTS.com
Linkedin: linkedin.com/in/stephengeoffreylynch
Slides: results.com/slides
Software Demo: results.com/demo

11. Metrics That Matter

13. 92% of companies don’t measure KPIs [3]92% of companies don’t measure Metrics/KPIs

18. In the past, we used Spreadsheets

19. Now we use software

24. …

30. RED = Unacceptable performance standard
YELLOW = Watch closely. Problem?
GREEN = Target performance standard
Questions / Answers:
#realKPIs || @RESULTSdotcom
Tracking Metrics (Key Performance Indicators)

35. Questions to identify your Metrics (KPIs)

37. Create
leads
Convert leads
into sales
Provide
product-service
Delight
customers
Grow cash
make profit

38. Choosing your Metrics

39. Functional Area

40. Marketing Metrics (sample)
Outcome
# Marketing Qualified Leads MQL = Leads that meet the qualifying criteria as being an ideal target market customer for your offering
# Sales Qualified Leads SQL = MQL that are interested in your offer, and potentially "ready to buy" within the desired timeframe
Activity
# New Leads Total number of new leads being created by your marketing endeavors over the period
# Impressions Total number of times an ad is displayed, whether it is clicked or not.
# Emails Opened The number of users who open an email
# New Subscribers Number of new subscribers to defined media content.
# Webpage Visits Total number of unique visits to a webpage / landing page
Effectiveness
$ Cost per MQL Cost per MQL is calculated by dividing total marketing spend by the number of new MQLs generated.
$ Cost per SQL Cost per SQL is calculated by dividing total marketing spend by the number of new SQLs generated.
% Email Click Through Rate Email CTR = Percentage of users that clicked on a specific link. .
% Advertisement CTR Advertisement CTR = Percentage of ad impressions that are clicked on
% Webpage conversion Measures the percentage of visitors to a webpage / landing page that respond to your Call To Action.
$ Cost per conversion The number of leads created by a marketing asset divided by the cost to deliver that item
% Visitor bounce rate The percentage of visitors who enter the site and "bounce" (leave the site) rather than visit other pages

41. Functional Area

42. Sales Metrics (sample)
Outcome
$ Sales or # Sales The $ value of sales made over the period being measured. Sometimes measured as # orders or # units
# New Clients The number of new clients signed over the period
% Revenue vs. Budget Sales revenue as a percentage of the budget / forecast target for the period
% Growth Typically compares last year's sales to this current year's sales over the same weekly or monthly period
Activity
# Calls Made The number of (verifiable) calls made with Sales Qualified Leads (SQL) in the period
# Appointments The number of appointments / presentations / demonstrations made with SQL in the period
# Proposals The number of sales proposals sent to SQL in the period
$ Value of Proposals The value of sales proposals that are awaiting acceptance within the period
$ Sales Pipeline value
The estimated $ value of Sales Qualified Leads in the pipeline that are expected to purchase within the
desired timeframe - based on existing SQL conversion rates
Effectiveness
# Days to close The average number of days it takes for Sale Qualified Leads to close
% Sales conversion The number of sales closed as “won” as a percentage of Sales Qualified Leads during the period
$ Average Sale Value The average amount spent by customers
$ Upsells The value of sales made to existing customers during the period
$ Cost of Customer Acquisition
Cost of Customer Acquisition (COCA) is the average cost to acquire a new customer. It takes into account
both the marketing and sales costs, divided by the number of sales made in the period.

43. Functional Area

44. Operations Metrics (sample)
Outcome
% Net Promoter Score
Measure of customer satisfaction: “On a scale from zero to ten, how likely are you to refer us to another
customer?”. To calculate NPS, subtract % of Detractors (0-6 scores) from % of Promoters (9-10 scores) from
all survey responses. e.g. if 50% are Promoters & 10% are Detractors, your Net Promoter Score = 40%.
% Customer retention
Percentage of customers who remain customers during a given time period. It can be based on the % of
customer accounts retained, or % of "existing customer revenue" that is retained
% Customer churn
The percentage of customers lost during a given time period. It can be based on the % of customer accounts
lost, or % of "existing customer revenue" that is lost. In the case of revenue churn it is possible to have
"negative churn" if upsells to existing customers exceed lost revenue from customers who terminate
Activity
# Produced / Delivered The number of items produced / number of services delivered
# Billable Hours The number of hours that were billed to customers
Effectiveness
% Labor Utilization Hours that were allocated to billable client work as a % of total number of production labor hours available
% Labor Costs
Labor costs as a percentage of revenue. It includes all expenses associated with employees, including
wages, insurance, taxes, and benefits
# Project Schedule Variance
PSV is a comparison of the budgeted # days to complete Work in Progress and the actual # days taken. If
PSV is zero then the project was completed on time; if PSV is positive it shows an overrun (we took more
days than budgeted). If the variance is negative it means we completed the projects ahead of schedule.
% Return Rate Return Rate shows the rate at which products returned to due to damage or dissatisfaction
# Rework Hours
The number of hours fixing mistakes or redoing work that was rejected by customers. (And alternative
measure is # Callbacks
% Deliveries in Full on Time
DIFOT is the percentage of deliveries that were received in full and on time over the period (this could also
be applied to projects)
$ Cost of Inventory on Hand
Cost of Inventory on Hand shows the current cost of the inventory owned by the company in its various
stages. The inventory stages are Raw Materials, Work-In-Process, Finished Goods, and In Transit.
# Inventory Turnover
Inventory Turnover shows the number of times inventory is sold or used each month during the period.
Inventory turnover is also known as inventory turns, stock turn, stock turns, turns, and stock turnover.

45. Functional Area

46. Finance Metrics (sample)
Outcome
$ Cash Balance The amount of cash contained in company bank accounts
$ Current Assets The value of all assets that can reasonably expect to be converted into cash within one year.
$ Recurring Revenue
Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR) measures the predictable and
recurring revenue components of your subscription business. Typically excludes one-time and variable fees.
$ Customer Lifetime Value
Customer Lifetime Value (LTV) assesses the average financial value of a customer. The present value of the
future cash flows attributed to a customer during their relationship with the company
# Average Subscription Days Average number of days customers have been subscribing to the product / service
Activity
# Days to close financials Number of "working" days to deliver the financial statements from the previous month
Effectiveness
$ AR Owed > 30Days The amount of Accounts Receivable $ owing that is 30 days past the payment due date
% Gross Profit Margin
Gross Margin measures difference between revenue and the cost of making a product or providing a service,
before deducting overhead, payroll, taxation, and interest payments.
% Net Profit Margin
Net profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes have
been deducted from a company's total revenue.
$ Cash Burn rate The additional capital that needs to be injected per month to finance operations.
$ Cash Runway
Amount of time until cash runs out, assuming current income & expenses stay constant. Calculated by
dividing current cash position by the current monthly cash burn rate.
$ Revenue per employee Divides revenue by the number of employees. Measures how efficiently a company is utilizing its employees.
# Accounts Receivable days
Also known as Debtor Days or Days Sales Outstanding (DSO). The average number of days it takes to
collect revenue after a sale has been made
# Accounts Payable Days
Also known as Creditor Days or Days Payable Outstanding (DPO). The average number of days that your
company takes to pay its suppliers
# Inventory Days Also known as Days Inventory Outstanding (DIO). The average number of days it takes to sell your inventory
# Cash Conversion Cycle The number of days cash remains tied up in operations. CCC = DIO + DSO - DPO

51. …
Imagine this…

52. Critical Success Factors of Operating Model

56. Questions / Answers:
#realKPIs || @RESULTSdotcom

59. Metric In “The Red”?
What’s happening here?
What 1 thing can we do this week to
improve this?
What support do you need?

60. Modern Management – Getting it Right

61. ★
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Metrics (KPIs) - best practices

62. Metrics That Matter
Best practices based on research and 20+ years of real-world
experience helping clients execute their strategy and win!
Presenter: Stephen Lynch
Role: President, Head of Strategy at RESULTS.com
Linkedin: linkedin.com/in/stephengeoffreylynch
Slides: results.com/slides
Software Demo: results.com/demo

63. Thank you for your time!