Some companies measure marketing and sales results by looking at gross profit contribution, yet many functions are out of marketing's control which significantly impacts this measurement. For example, purchasing may not be effective in buying raw materials and production may not have the plant labor efficiency to positively impact profitability. In addition, distribution centers, service centers, or credit and administrative departments tend to cloud the real performance of a marketing and sales function.

How do you measure sales and marketing performance if marketing does not control a measurable benchmark? Below are ten metrics that most businesses can use to assess the effectiveness of marketing and sales efforts. You can apply them to the entire company, a region or division, or an individual territory.

1. Growth in units and revenues of major existing accounts (each company must define their major accounts).

2. Number of individual products sold to major accounts will determine the penetration into existing accounts to identify hidden opportunities.

3. Number of significant new accounts acquired during the period is critical to all businesses to offset attrition from the existing customer base.

4. Number of individual items on each sales quotation shows what additional products can be pursued to get the full lineup of products and services into an account.

5. Percentage of successful sales quotations to identify the effectiveness of the entire marketing and sales process.

6. Total marketing and sales cost as a percentage of revenue to indicate productivity. Cost as a percentage of revenue should trend downward over time, showing the effects of stronger relationships and better understanding of the industry, markets, and individual strategies and tactics.

7. Customer lifetime revenue contribution to identify the customer life cycle, positive impact of customer retention, loyalty, and sales effectiveness.

8. Number of new products or services added in the period to indicate marketing's effectiveness in keeping the company current in the marketplace.

9. Market share trend to compare the company's effectiveness relative to that of competition.

10. Additions and deletions from the Major Account List to identify major account trends and customer turnover issues to be investigated.

Marketing executives should measure each brand, identifying individual contributions and problem spots. There are many other benchmarks, some specific to particular industries, which can be used. Determine which benchmarks are critical to you, then measure and analyze results against goals. The bottom line is that marketing and sales performance can and should be measured, trends identified and future objectives established.

Cross Border News

Americans Go Spending-The U.S. Commerce Department said that incomes rose in April and a separate report from the University of Michigan said consumer confidence rebounded in the second half of May as fuel prices began to decline. "While consumers have been saying that they are worried, their spending patterns suggest otherwise, said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich Conn.

U.S. Big Box Crosses into Canada-Lowe's announced this week that it will move into the Canadian market following on the heels of Home Depot. Currently the Canadian market is dominated by Home Depot and Canadian, Rona Inc. This will likely be a good lesson in how three large companies develop strategies that differentiate themselves as they duke it out in the Great White North.

Internet Sales Up-A new report from Statistics Canada shows sharp growth in Internet sales, with Canada and the United States growing at about the same rate.

Performance Notes

Challenging Marketing Laws--There is a lot of talk about crowded market segments, declining product life-cycles and yet through a bold move, a Wisconsin company, Super Fast Pizza is taking on the big boys and rewriting the laws of marketing. How? According to Trendspotting, they figured out how to deliver piping hot pizzas within 15 minutes by using high-tech mobile kitchen vans, officially licensed as restaurants, which are outfitted with custom ovens that can cook pizzas at 600 degrees. Fully powered and wifi-enabled, Super Fast Pizza's kitchens on wheels take orders and cook pizzas while on their way to customers. To save time and make the best of the limited cooking space, all processes have been standardized: the menu only offers the seven most popular pizzas (think deluxe, sausage, sausage and pepperoni, five-cheese, four-meat, pepperoni, veggie, and a pizza of the month), all pizzas are uncut and medium sized, and all cost USD 10.99. Online ordering is encouraged.

Super Fast Pizza challenges one of marketing's 'natural laws', in this case the notion that preparation of product needs to take place in a fixed location. How many other businesses would benefit from shortening or deleting production-to-delivery times? Could your company benefit from combining delivery with production, whether in vans, on trains, planes or container ships? Floating factories anyone? Just start with challenging the norm.

Performance Tip--Quit trying to improve just a little on what has been done before; start from scratch and build what customers will rave about!

High Energy, Better Ideas 

Facts are facts or are they? Is the glass 'half full' or 'half empty'? And, do you see that as a 'good' thing or a 'bad' thing? We each have a predisposition to view things in a certain way and place a "value" on them. Whether it's a positive or negative tendency, it can get in the way of the energy flowing towards constructive resolution of the question at hand.

In the same way, when we have a negative reaction to someone's ideas the energy flow is diminished which makes them reluctant to offer more. Developing an environment in which we accept ideas--while not necessarily agreeing with them--and looking for qualities within them that can be part of a chosen answer will increase the energy flow.

Energy Flows Where Attention Goes
If we concentrate on why an idea will not work, we can be assured our minds will accommodate us and prove beyond a shadow of doubt that it will not. Conversely, if we focus on the positive aspects of the idea, our minds will more likely figure out how to make it work.

You may have caught yourself, on some occasions when someone raised an idea, automatically thinking of all the reasons it would not work. This is a normal reaction. Because we make most decisions based on our past experience, it is natural for our automatic thoughts to come into play and apply past judgments, even when we face a new situation.

To change this we need to become more aware of how and what we think. Once we are aware, then we can change our frame of mind and focus our mental power on how to make things happen that we want to happen.

Help People Contribute
To help change your frame of mind, start by accepting that people are really trying to do their best; their intent in putting forth an idea is to contribute to the result.

Next, remember that the best solution is produced when people are at their most creative, and they are most creative when they are not afraid. By actively perceiving the positives, we help to drive out the fear of rejection and the fear of being invalidated. Here's what to do when an idea is raised in a conversation:

1. Begin by staying aware: notice your reactions to another's ideas.

2. Try to reach a neutral state of mind: acknowledge and suspend your judgment about why the proposed idea will or won't work.

3. Clarify your understanding of what the idea really is all about, from their perspective: ask the person raising the idea to expand on their idea by asking "could you expand on that thought?" or "tell me how that might work in this situation?"

4. Identify and declare four positive factors about the thought: try starting off your response with "What I like about the idea is…"

5. Frame what you think is a negative aspect of the idea as a "wish:" to avoid being perceived a critical, state the wish as "we" focused, rather than "me" or "you" by saying something like "I wish we could…"

6. Ask how that wish might be addressed: focus on how to make the idea work rather than challenging the whole idea or the individual proposing it.

This process should be part of your ongoing employee coaching and initially it may seem to take a lot more energy or be uncomfortable but in time it will become easier and energizing to you.

Linda Speaks

Linda will be giving two presentations at The Heating, Refrigeration and Air Conditioning Institute of Canada in August 25-27 in Huntsville, Ontario. If you would like Linda to present a program to your company or group please email her at lhanson@llhenterprises.com.

Please give us feedback on this issue of The Superior Performance Report (click here) and let us hear your insights and what you would like to hear about next time.

Copyright 2003 by LLH Enterprises-reproduction for publication is encouraged, with the following attribution: From "The Superior Performance Report," by Linda Hanson, CMC, www.llhenterprises.com.

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