In God we trust, all others bring data – attributed to W. Edwards Deming
I know a water polo coach who tracks an unusual number for each of his players. He calls it the Plus-Minus score. Plus-Minus captures how well you do at preventing the other team from scoring. Its purpose is to reward players who perhaps don’t score a lot of goals but who are good at making sure the other team doesn’t score either. In other words, it awards defense.
Plus-Minus is measured by tracking the number of times the other team scores while you are in the water playing a game. The coach tracks this number over the course of a season and the players on the team are very aware of how their Plus-Minus score compares to the other guys on the team.
Now I don’t want to give you the wrong idea. This coach does lots of other things to build a successful team. He teaches fundamentals and strategy, he encourages his players to think of their athleticism as a way of life and to “be your best” in everything you do, he’s very competitive and he wants his team to win.
And he tracks numbers. Not just his win-loss record, but lots of numbers. At games and at practice. During the season and during the off-season. And his numbers, like the Plus-Minus score, find relationships and drivers in the system of water polo that help his players improve across many aspects of the game.
Capture the numbers and watch the trends
Unlike this coach, we haven’t been so good in marketing and sales about tracking numbers and using them to be successful. Oh sure, we track our win record (completed sales and revenue), but we rarely track losses, let alone all the other factors that go into finding, winning and keeping a customer. But to improve a process it’s critical to start tracking the actions at each stage. And, like the water polo coach, to track the numbers that really get at what is happening inside your system. Or as Michael Webb says, to get at the facts that drive customer actions.
Here are three considerations for the principle of managing on data and facts:
1. Individual metrics by themselves don’t tell you much. It’s how they fit into the marketing and sales process. Measuring traffic to your website is good, but not if the traffic numbers stand by themselves. What are the sources that are bringing the traffic? What happens once visitors arrive at the site, do they bounce out right away or spend time on the landing page? Do they convert by registering or making a purchase?
2. Focus your measurements on the most critical component in the system. If you try to focus on every number all the time it can quickly become overwhelming. Find the most urgent one or two problems in your marketing/sales process (the biggest constraint in your system) and use data to understand the problem. Then when you start testing ways to fix the problem, continue to refine your use of metrics to measure your progress. Once that problem is fixed, you can move on to the next most urgent problem.
3. Connect your measurements to the financial system. Most of your metrics will not be financial measurements and thus won’t tie directly into your company’s financial system. What you will mainly be tracking are actions in the marketing/sales process, outputs from one stage which become inputs to the next stage. But the more you can do to map marketing and sales activities to your costs, the easier it will be to see how the results of your sales process fit into the larger financial picture of your company.
And finally, you will want to develop ways to not only measure results, but also to find what drives those results. Like the Plus-Minus score, these drivers inside your system will start to reveal the relationship between cause and effect in your sales process. Cause and effect will be the subject of my next post on lean marketing principles.
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