1. Best practices based on research and 20 years of
real world consulting to RESULTS.com client firms
Presenter: Stephen Lynch
Role: Head of Strategy & Consulting at RESULTS.com
Email: Stephen.Lynch@Results.com
Linkedin: linkedin.com/in/stephengeoffreylynch
Slides: results.com/slides
Software Demo: results.com/demo
“Metrics That Motivate”

3. Best practices based on research and 20 years of
real world consulting to RESULTS.com client firms
Presenter: Stephen Lynch
Role: Head of Strategy & Consulting at RESULTS.com
Email: Stephen.Lynch@Results.com
Linkedin: linkedin.com/in/stephengeoffreylynch
Slides: results.com/slides
Software Demo: results.com/demo
“Metrics That Motivate”

4. Metrics That Matter

6. “However beautiful the strategy,
you should occasionally
look at the results”
“However beautiful the strategy,
you should occasionally
look at the results”

7. 92% of companies don’t measure KPIs [3]92% of companies don’t measure Metrics/KPIs

8. 92% of companies don’t measure KPIs [3]

9. 92% of companies don’t measure KPIs [3]

16. In the past, we used Spreadsheets

17. Now we use software

18. Cascade: Company > Team > Individual

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

25. Aim for the stars,
even if you miss…
you’ll still reach the moon

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

36. Questions to identify your Metrics (KPIs)
1. What are the functional areas of our operating model?
2. What result or outcome are we looking for in each area?
3. What “activities” or “actions” drive this outcome?
4. What “effectiveness” measures let us know how well these
activities are being performed?

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

42. # phone calls
# appointments booked
# sales demonstrations
% who attend appointment
% who buy (conversion rate)

43. Functional Area Metrics (example)
Functional Area name = SALES Performance Thresholds
Metric Description
Person
Accountable
Time period RED GREEN
$ Sales Revenue Jenny Weekly $45,000 - $55,000
# Appointments Booked Jenny Daily average 20 - 25
# Sales Presentations Jenny Weekly 55 - 75
% Conversion Rate Jenny Weekly 50% - 60%

44. Goal Hierarchies (roll ups) (example)
Functional Area name = SALES Performance Thresholds
“Parent” Goal
Person
Accountable
Time period RED GREEN
# Sales presentations – total team Jenny Weekly 55 75
“Child” Goals
Person
Accountable
Time period
# Sales presentations - Jeff Jeff Weekly 15 20
# Sales presentations - Marie Marie Weekly 15 20
# Sales presentations - Sergey Sergey Weekly 15 20
# Sales presentations - Arzu Arzu Weekly 10 15

45. Choosing your Metrics
Less is more. 4 to 6 Metrics maximum per functional area
Choose Metrics you actually have data available for now
Data automatically reported from software > Manual
Data must be discussed at a meeting.

46. 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

47. 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.

48. 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.

49. Customer Service Metrics (sample)
Outcome
# Customer Effort Score
The Customer Effort Score (CES) is typically structured using a Likert Scale as follows: To what extent do
you agree or disagree with the following statement: “(Your company name) made it easy for me to solve my
issue” 1.Strongly disagree 2. Disagree 3. Somewhat Disagree 4. Neither Agree nor Disagree 5. Somewhat
Agree 6. Agree 7. Strongly Agree. From there you can take an average of all the CES scores obtained over
the period
Activity
# Support Tickets created The number of customer complaints / requests for support in the period
# Support Tickets resolved The number of customer support tickets closed as “resolved” in the period
# Average Response Time How quickly on average you responded to customer support requests in the period
# Lost Customers The number of customers lost due to other competition, dissatisfied customers, or any other reason.
Effectiveness
# Average Time to Resolution
How long, on average, customers have to wait from the time of their initial phone call (or support ticket) to
when their issue is marked as “resolved” in the period
% First Contact Resolution
FCR is calculated as the number of customer issues solved in the first contact, divided by the total number of
customer contacts in the period, expressed as a percentage.
# Customer Callbacks Number of repeat phone calls / support tickets from customers within the (typically seven day) period.

50. 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. - You are the CEO, and you are on holiday on a remote tropical island….
- All you can receive is a once weekly email that contains a small handful of
numbers (5 max) that tell you how well your organization is performing
- If the Metrics are “green” you can go back to reading your book
- If the Metrics are “yellow” you need to ring the office to see what is going on
- If the Metrics are “red” you need to cut your holiday short and return home
- What 5 Metrics are the “critical success factors” for your organization?
Imagine this…

52. Critical Success Factors of Operating Model
(Restaurant example)
Functional Area name = LEADERSHIP TEAM Performance Thresholds
KPI Description
Person
Accountable
Time period RED GREEN
# Customers Chloe Weekly 2700 3000
$ Average spend per customer Rajesh Weekly $35 $40
# Complaints Rajesh Weekly 10 5
$ Revenue per available seat hour (RevPASH) Mark Weekly $12 $15
Labor cost as % of revenue Mark Weekly 35% 30%

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

56. “Leaders owe it to the organization & their fellow workers
not to tolerate non-performing people in important jobs”

58. 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. Metrics & Accountability: Getting it Right
Growth inhibited by:
- Wrong person in the role
- Wrong Metrics (KPIs)
- Too many Goals
- Unrealistic performance thresholds
- Not keeping Goals and Tasks current and visible every week
- Not running weekly team and 1-on-1 meetings to discuss results
- Not holding each person firmly accountable for performance
- No consequences for poor performance
- Waiting too long to address poor performance
Organization growth maximized by:
- Right person in the role
- Right Metrics (KPIs)
- Realistic “green” performance thresholds, adjusted regularly
- Goals and Tasks kept current and visible every week
- Weekly team and 1-on-1 meetings to discuss results
- Each person held firmly accountable for performance
- Good performance and progress praised and recognized
- Poor performance discussed every week and addressed promptly

61. ★ Metrics drive “business as usual” (your current operating model)
★ Don’t just track outcomes or currency measures
★ Focus on activity & effectiveness measures that drive outcomes
★ Make performance visible on a dashboard
★ Weekly team and 1 on 1 meetings to discuss performance
★ Good performance praise and recognize
★ Poor performance discuss every week, “What’s happening here?”
★ Shame is not a motivator. Beware setting thresholds too high
★ Be conservative in beginning. Get everyone used to winning
★ Ratchet up performance threshold over time
★ Adjust thresholds every quarter to ensure relevance
Metrics (KPIs) - best practices

62. Best practices based on research and 20 years of
real world consulting to RESULTS.com client firms
Presenter: Stephen Lynch
Role: Head of Strategy & Consulting at RESULTS.com
Email: Stephen.Lynch@Results.com
Linkedin: linkedin.com/in/stephengeoffreylynch
Slides: results.com/slides
Software Demo: results.com/demo
“Metrics That Motivate”

63. Thank you for your time!