#475 - Why Sales Leaders Get Fired: A Sales Metrics Masterclass | Lead Playbook

Most sales leaders, because they don't have data, guess at what to do. When you guess at what to do, you're wrong more often than you're right. And then you start doing a bunch of initiatives that actually don't impact numbers. And then your team quits listening to you because everything you tell them doesn't help them. And the next thing you know, you don't have a job. The way to prevent that horrible cycle is the metrics. It doesn't matter anymore. Once you get to 15, 20, 30 million if you can go in and win a deal. What matters is, is can you create a self sufficient team that knows how to go in and win deals without you? That's your job.

Good morning, everybody, and welcome to this playbook episode of 30 Minutes to President's Club. My name is Armand Farouk and I'm here with my co host in studio, Mark Kosklo. And today, folks, there are a lot of really sexy topics in sales. As I should, by the way. You know, hiring, hiring, hiring, hiring, interviewing, performance, like everything in the world. And there are other exciting things in life. You know, carnivals, festivals, graduations for your children. But there is one thing that tops them all. It is metrics.

Metrics.

There's nothing that gets me more excited in the morning than talking about sales metrics. And so, folks, in all seriousness, today, the vast majority of sales leaders, I find, oftentimes lose their jobs not because they don't know how to make the news or they don't know what to do. It's because they don't know how to report the news.

Yeah.

Effectively. Or they don't know how to use metrics to figure out where to focus their attention. So they're just guessing. So today we're going to do a full clinic on every metric you should be looking at as a sales leader. Why those metrics matter, where they should live in terms of dashboards and how you communicate those things out. So, Mark, in your perspective, you've led organizations from 0 to 100 million-plus. Should people listen?

It's pretty simple. Your metrics determine your ability to be able to run the business. If you don't have a core set of metrics that are well defined, consistently used across the entire revenue organization, then you're going to have people misspeaking to each other. And then that's when you start to see things crumble. So I think that there's nothing more important than having those core metrics that everybody defines the same way, uses the same way, and interprets the same way so that you can be really consistent in how you run in the organization.

So let's unpack this a little bit. When we think about why metrics matter at all, there are two big things that pop out in my mind. So number one, metrics tell me as a sales leader where I should focus my time and attention. So, for example, today's show is brought to you by Text Us, which helps you move your deals forward faster. When timing matters, the fastest way to move a feel forward is to avoid getting stuck in the inbox. And so my favorite way to get on a text basis is literally when your prospect requests a demo, just send them a confirmation text saying that you're looking forward to the meeting and that opens the text channel for you to call back on it later. Folks, we put an entire guide on how to revive ghosted deals, nudge next steps, and use texting to keep deals moving forward. With Text Us, check it out. It's free in the show.

Notes.

If I see that pipeline generation is down, I know that I might need to focus on top of funnel. And then metrics can tell me where I need to focus, whether it's we're not making enough cold calls or we're not converting enough cold calls. So that's number one. And the number two metrics, to your point, allow me to tell the story of my business upwards so that my CEO or my other leaders don't literally need to be looking at every single deal in the same way that I am. So those are the two things in mind. They tell me where to focus my attention. They tell me how to tell the story of my business. Is there anything else that you use metrics for?

I think that metrics are a strange thing. There's infinitely many that we could look at. But I think what you're talking about is when you've defined what a metric means to you, this is how I want to tell my story. Then that's when you start to take the world of infinite metrics and narrow it down to, okay, what's important to me. Like maybe if you're a transactional company, like your cycle time is much more important than if you're selling huge enterprise deals. And so maybe you don't want to tell the story of cycle time in that enterprise situation. Maybe you do in the transactional side. So that's where understanding the story that you want to tell upwards, it's important to run the business will help you narrow your focus on which metrics to look at. And then that is getting that in place, you know, that's when you can start to tell the story in a better way. Even though that's very cyclical.

No, it totally makes sense. And I think what you won't get in this episode, folks, is this is a list of the metrics that you should look at for every single business.

Yeah.

We're going to give you a framework frame for how to think about metrics and a bunch of examples of how you can use metrics to problem solve.

Yeah.

So if you learn to master metrics for your business, you will find that people stop poking into your business as often because you can effectively tell the story of your business and you can focus on the fewest metrics that tell the story of whether or not you're doing a good job. And then also a lot of sales leaders are just frankly guessing and they're just throwing more volume at the problem or they're throwing sales trainings at the problem, but they don't actually know if they're solving the right problem in the first place. And so your effort has a magnitude higher of output when you use metrics to make sure you're solving the right problem. So, Mark, let's actually talk about what metrics we should be looking at. And you talked about this thing called AR Ram where there are six stages of the customer journey and then there are metrics behind each of those stages of the customer journey. So could you walk through what those six stages are and then we'll dive into metrics for each.

Yeah. So Aram is recurring revenue operating model. It is a framework for how to think about your customer journey. And so I think that's the basis for any type of metric based conversation. If you don't understand your customer journey, you're probably not going to be able to figure out what metrics are important to you. So the one I subscribe to is Jaco Vanderkooji's and Winning by Design's revenue. Our recurring revenue operating model, Aram. And. And there's six stages. The first is awareness. Awareness is we need this person who has no clue who we are and may not even be aware of any problems that they have that we can solve. We need to get them educated and figured out and aware of what's going on. Right. The second one is education. Education is where SDRs live. Education is we're taking this person who's now aware of us and aware of a problem and they're showing signs that they might be interested. And we need to convert that demand into qualified pipeline by booking A the next stage is is selection. Selection is where the AES live. This is where your sales process lives. This is like your stage by stage conversion, right? This is where we take this person who's now qualified because they have a problem, they want to solve it, they have all the right conditions and we need to convince them that we're the vendor for them. Right. Then after they are selection, there's onboarding. Onboarding is where your implementation team lives. The idea there is how do we get them to fast value time to value. That's the whole thing we're trying to optimize in that part. After they're onboarded, they need to get continued value. Like proactive value creation is what I is what I think that this area is about in the use where your csms lives. Are we just sending an email every quarter hoping that they're going they're okay, or are we proactively figuring out how do we get them deeper into the platform? And then if your CS team is doing that, then you get to the last stage which is Expand. As you get deeper in the platform, you should lead people to use cases that require more products or more services that allow you to create a bigger revenue base inside that account. So that would be the expand part. So awareness, marketing and Demand gen education, SDR, land selection, AES are in charge of that area. Onboard implementation team use as your CS team and expand is your AM team. And you need to have a leader in charge of each area of this entire process. That is their stewardship, that leader's stewardship of the people in that phase. Their job is to usher them in and then help them move to the next place.

Great. And folks, one of the things we're going to go through is this is the highest level dashboard in the revenue organization.

Yes.

You'll notice as we go through these metrics, there are much more granular mark, you call them L2 level 2 metrics that are not here. For example, under education we're going to talk about sales qualified leads and sales accepted leads, which are basically how many accounts are worked, how many meetings are booked. There are a million metrics that happen in between those things. How many calls you made, how many emails you sent, what the conversion is on those. Those exist in level two dashboards. Well, but this is the highest level one. So I want to dig into the first three categories because those are the ones that are going to be the most relevant for most of the sales leaders that are listening to this podcast. So you have Awareness, which is owned by Marketing, you have Education, which is owned by SDR and you have Selection, which is owned by AE leaders. So let's do a top to bottom and let's just rattle off the metrics within each. I'm just going to do a quick read off of that.

Let's do it.

So for awareness, the three metrics that you shared with me in the prep were how many accounts are actively being worked by marketing.

Yep.

How many MCLs?

So marketing created leads.

Marketing created leads are actively being engaged. How many marketing qualified leads are meeting a lead threshold? That finishes the awareness category.

Yes.

From there the education category is when the SDRs come in, they're working those MQLs. So the first bucket there is SQLs. So sales qualified leads. How many of those MQLs are they actually working? From there the next bucket is how many sals.

Okay.

How many meetings are they booking? How many sales accepted leads are coming in? And then that's when it transitions to the AE hands in selection. And that's when you get into sales qualified opportunities. So how many of those sals those meetings are turning into opportunities. And then from there you literally map out every single stage. How many stage ones, how many stage two, how many stage three, how many stage four, how many stage five opportunities. So that's everything from awareness to selection. Did I miss anything?

That's it. Those are the L1 top level lagging metrics that you need to match the financial plan in order for the revenue machine to work. Right. If you don't, if you're not monitoring those on a weekly basis, I would suggest that you are not really running a revenue organization.

So that is literally mapping out from lead to closed one.

Yes, everything.

And the reason that you need to map out all of these metrics in order, folks, is because this is where you start and this is where you can start to look at where things are down. That will tell you where to double click.

Yeah.

So let's do a couple examples here based on that.

Let's do it.

So let's start with the awareness bucket again. The three metrics are how many accounts are worked, how many MCLs are there, how many MQL are there? This is when as a sales leader I get the chance to heckle my marketing leader. Right. So what are some of the most common problems we could solve here? Or what's something that you would look at on a dashboard where you'd be like, oh, this is down and like we need to go solve that?

Yeah. For example, so let's say that I look at my financial plan. And on a weekly basis, we need to be creating 500 MQLs. All right? And I get into my weekly revenue meeting. I've seen it in Domo, tableau, whatever, choose your bi tool you want. And I get in there and the first thing we do is we look at These high level L1 lagging metrics and I see, oh my gosh, we now have a trend of being under 400 nqls a week for the last three weeks. Now I want to make sure we talk here a second about trend versus glitch, problem versus glitch. A glitch is, guess what, it's dreamforce. I sell to salespeople and we didn't set any meetings last week. Duh. That's not a problem with your process. You don't need to go figure out and bang your head of how am I going to fix this? You just need to let it pass and move on. But when we start to see a trend of multiple weeks of things being below, now we have a problem and problems require a program to fix. They will not fix themselves. You must go fix them. And so that's what we're trying to find. So obviously I get in there and I see my MQLs are under 400 for the last 3 weeks when they should be over 500 a week. So the first thing I'm going to look at is I'm going to click into my L2 metrics. All right, L2 metrics are the metrics that tell us what are the things that we can go diagnose. Now this is, I think, an important concept. L1 is a lagging metric. L2 are leading metrics. Every lagging metric should have anywhere from three to seven metrics that lead into that metric. Once you see those leading metrics, you want to order them in the level of importance or priority. And what you want to do is, you know, every dashboard begets another dashboard and that begets another dashboard. Every metric you look at means you could go look at another metric. Consistent, process driven. This is how we do things in our sales org is so important. So I see QL's are down. I now go look at my L2 metrics and I go, I start at the top and I say, okay, first one's green, second one greens, third one's red. Red is where I stop. I don't look at metrics 4, 5, 6 and 7 because they're not as important, they're not as impactful. And in the change, I go try to solve Issue number three, that's red. When I fix that, that should help me fix my overall number. But that's how you think about, you got to dig down into those level two metrics.

So if I want to play this back to you. So if MQLS are down, I'm supposed to be at 400 or 500 and they're at 200 to 300 MQLs generated. I'm going to go into my MQL generation dashboard and I should be able to see a series of five metrics in order that are similar to like the life cycle that we mapped out, but it's just for MQLs. And so it might be like how many paid ads did we run, for example, or how many marketing webinar leads did we generate? Or how many? Something like that.

Right. What is the time between touches for a customer? Like are they taking three weeks? Like all of a sudden they're taking like, let's say that we think on average our plan, they should be know a few days between touches in order to be qualified. Really. And we start to see that, that expand out three weeks. That would tell us that there's an issue with what we're doing in urgency. Right. And now we can go work on some urgency issues.

So let's do the same example, but let's bring it in.

SDR world. Yeah.

So we talk about the funnel. From there it goes MQL to SQL. So how many leads are being worked?

Yes.

And then SQL to Sal. How many meetings are being booked based on how many leads you worked? So let's say that we have a meetings booked problem and we said meetings booked are down. By the way, quick aside, when I look at this dashboard, is it showing me week over week numbers? Is it just showing me this week, Is it showing me monthly? What's time horizon?

So every metric in order to be useful requires two things, trend and context. Trend is the week over week, month over month, quarter over quarter. Trend and context is what is my benchmark or goal that I need to hit. If I just tell you, hey, Armando, we booked 83 meetings last week. You have no clue whether that's good or bad. And if I'm like, hey, our goal is 50, you're like, wow, Mark, that's good. But if I'm like, hey, we were setting over 100 for the last four weeks in a row and now we're down to 83. Do you still think it's good? Yeah, it's not good. Right. We're starting to see a decrease Even though we're still above our benchmark. So you have to have context and trend in order to understand what a number actually means.

This is so important. So a lot of times in your head as a sales leader, you'll be super excited because you see, oh, my God, rep booked 10 meetings this week.

Yeah.

So you go in the company all hands channel, like 10 meeting week, and you're like pounding the table and everyone's like, I don't get it.

Yeah.

And the reason is like, they're like, what does 10 meetings mean?

Yeah.

Like, I don't know.

Your engineers don't know. Yeah.

Like I write like 300 lines of code. Like that's like. It's like it means nothing to me. So you always have to explain what the metric is, what it was, and that's the trend and then what it means.

Yes.

What is it relative to the baseline? Because 10 meetings could be bad if you're always booking 16.

That's right.

So don't just shout out the numbers. You have to shout out what the numbers mean relative to the past or relative to the benchmark. So let's go to this sale example. I'm seeing weekly meetings coming in.

Yep.

Weekly meetings down. What do I do about it?

First thing I do is I look at the trend. How many weeks in a row are the meetings down? If it's one week, I'm now telling my SDR leader, or what I expect my SDR leader to report to me is, hey, Mark, we're down this week on meetings. I'm going to be watching it and I'll let you know if it turns into a trend because it could just be a glitch. Right. After a couple, three weeks of downward performance. Now what I want them to do is double click on that L1 lagging metric and go into the leading metrics. So I'm going to start to look for meeting set. I'm going to start to look for sales activity. Are we doing the dials then? Are those dials turning into connects? Are the connects turning into meetings booked? Like, that's for one channel that I would look at for calling. Guess what happens if my connect rate is looking off Now I'm going to go not yell at my SDR team for not doing enough activity or being bad on the phones. I'm going to go yell at my data provider for giving me bad phone numbers. And. Right. So like having these L2 metrics and understanding, okay, what are the inputs and how do they work? What are those mini funnels? Right. We've got the big funnel of, you know, revenue, but inside every area is a mini funnel that we need to make sure we're doing it. So like if I my reps are on the phone, I'm going to be looking at number of dials, connect rate and then how often are they booking meetings when they're on there? Then I'm going to look at emails, I'm going to look at open rate, reply rate, positive reply rate and then meetings booked off a positive reply rate. For social, I'm going to look at DM sent, you know, if we're tracking and we can track like, you know, replies received, are they positive or negative and are we booking meetings off of them? Now four areas that I can go look and see what's going wrong that's causing those meetings books to be off.

And notice folks, Mark isn't starting with those four areas. For example, and this is one place where people really struggle to communicate upwards is they can't tell the story of what's going on in their business to their VP of sales. For example, if I'm an SDR leader, you need to work your way backwards from what your VP of sales is thinking about. So if you literally look at this dashboard, a VP of Sales has no context for what 179 cold calls means nothing. Or what 2% connect rate means. But a lot of times SDR leaders, because that's those are the metrics they're using to coach their teams. They that's what they're sending upward. You need to start with like, okay, the thing that my VP of sales is looking at is probably pipeline generation. And then if I work my way backwards from pipeline generation, that's like number of SQOs, which is opportunities and number of meetings is the first thing that feeds into number of opportunities. And so now I can start to like walk my VP of sales backward from this is how much pipeline you need to hit your number. This is how many meetings I need to hit to hit your pipeline goal.

Yeah.

And then you can say, oh, our meetings were down. That impacts your pipeline goal. Here are the three things that impact my meeting number and you can start to educate them upward on why dial count matters or why connect rate matters. But if you just jump into those L2 metrics right at the beginning, they get lost in the yeats and frustrated.

As much as you think people make connections, they don't. And you talking about going to your VP of sales and saying, hey, we need a new data provider because our, our numbers are bad guess what? Most VPs, our sales are going to say, is it really that bad? How do you know it's bad? Whatever. So if you come with like, hey, look, our, our connect rate on for the last four weeks has declined while I've been pushing activity, our activity's gone up. So we're actually being way more inefficient now. What do you think a VP of sales is going to respond to that versus you asking them for just a new data provider like that. Again, we talked about earlier about the story that you tell. You have to be able to tell a story. Context and trend are so important in being able to communicate what that story actually means.

So folks, just to recap this, I know this is getting a little bit dense because we're talking about metrics, but like, this is the number one thing that helps you scale from IC to manager. Manager, especially to director. Director to vp. There's a certain point in the game where it's not about deals anymore. It's not about can you jump on a call, it's about can you figure out where's the broken problem in the system and go and solve that problem? Because you can't be across a thousand deals.

Yeah.

And this stuff is really, really important. So like a couple of key things you can do to just start. You can map out the metrics from beginning to end. And Mark talked about doing that in the RROm, the recurring revenue operating model. So literally from like lead to close. One, from figure out the highest level metrics. And then two, whenever one of those metrics is down, just figure out how to split it.

Yeah.

So if meetings is down, figure out the four things that lead into meetings, and then that's how you become a detective instead of someone who's just guessing and lifting up every single rock that you can possibly find.

Right. And as you start to do it, you're going to start to ask yourself other questions. Like, for example, I'll give you a story of a consulting customer that I had, a client that I had. They were looking at their numbers and they saw that they had a problem between the meeting being booked and the account being qualified. Well, they didn't have their metrics instrumented correctly, so they couldn't look at it by channel. So we immediately went in there, created a filter on inbound versus outbound. What we found out for outbound was really good at setting meetings, really good at holding meetings, really bad at those held meetings. Qualifying for inbound leads, we found out really good at setting meetings, horrible at the meetings. Helding but when they held they qualified really well. So what do we have to do? We had to create a specific meeting hold process for inbound leads and we had to go retrain strs on how to do qualified leads better. But because they didn't have that granularity before I got there, they were trying to do something that actually was like where they were like we just need to train the SDRs better, which would not have solved the inbound lead problem and they still would have had issues. So like this is how important it is to understand. Like when I have my stuff broken down, I can go look at all of those leading metrics. When I have the ability to look at it by channel or something like that, now I can really start to get granular on what's affecting it and that gives you a specific fix. And something I've learned in leadership is really simple. Most sales leaders, because they don't have data and because their reps don't tell them what they need help with, because their reps don't need help with guess at what to do. When you guess at what to do, you're wrong more often than you're right. And then you start doing a bunch of initiatives that actually don't impact numbers and then your team quits listening to you because everything you tell them doesn't help them. And the next thing you know, you don't have a job. And so the way to prevent that horrible cycle is this right here. It's the metrics. And like you said, it doesn't matter anymore. Once you get to 15, 20, 30 million if you can go in and win a deal as the leader doesn't matter anymore. What matters is is can you create a self sufficient team that knows how to go in and win deals without you. That's your job.

That's right. So Mark, I want to do one more double click on this dashboard and then let's talk about comms internally. So I have this master rm we get into this selection area. So again education with the SDRs was SQL Sal and now selection is sqo. So how many meetings are turning into opportunities. And then you have stage one, stage two, stage three, stage four, stage. So you literally have like how many opportunities are in or being moved into.

Yeah, progressing for. So is this is an important inflection point. This aram can be measured two different ways. One is with bulk numbers like number of accounts being worked, number of MQLs, number of MCLs, number of SQLs. You know you can. Those are like Raw numbers. But then there's dollars. What is the dollar amount of the accounts that we are reaching out to? What is the dollar amount of mcls? And MQLS was a doll pipeline that we're creating. Right. You have to look at it on both dimensions. If you don't look at it on both dimensions, what ends up happening is, is if you're converting a lot of big dollar deals, your actual number conversion rates could be horrible. You could be missing out on all the small and medium deals, even though your dollar conversion rates look awesome and vice versa. If I'm converting all my small accounts, my number of conversions, like, oh, I'm converting this many meetings into qualified opportunities, it looks great, but if my dollars aren't good, then that means I'm not qualifying the biggest accounts. Right? Yeah. So you have to make sure that you're balancing what you're looking at when you are looking at these metrics.

If I just open up this R ROM dashboard, I've probably got two columns, maybe a third. I'll get to the third. Column one is maybe dollar versus of it. Column two is number version of opportunities. And then what about conversion percentages? And the reason that I ask is if I see that sqo's are down, my first gut take is to just look up at how many sals did we generate. Be like, maybe sales was down, so that's the problem. Or if sal stayed the same, my mind is like, is our conversion percentage on sals down? So do you have conversion metrics on this dashboard too?

There's three parts to the dashboard. One is the volume metric, if you will, like the, the, the, you know, the number of things. The second is the conversion. So are we converting dollars or converting numbers? And the last is the time that somebody spends in each of those areas because time is a huge component. If I convert, I can theoretically convert 100% of my inbound leads and win every single deal. But if it takes me 100 years, the business goes out of business. Right. And so you have to make sure that you're looking at the number, whether it be dollars or number of opportunities or whatever. You have to be looking at the conversion rate between those, and then you have to be looking at the time it taken you to convert. Got it.

And so you have stage by stage conversion, percentage wise?

Yes.

In this dashboard as well.

100%. Yep.

And I imagine looking at this week over week, like it's probably all over the place. Like, if I'm in an enterprise business, stage by stage conversion on a weekly Basis is probably all over the place. So how do you like smooth that out? Is it like a trailing 90 days? Is it a, do you just change that to a monthly for a bigger business? Like how does that work?

That's exactly right. Yeah. So we do you like, we smooth out an average over 90 days over the last quarter. Okay. Yeah. Because if you look at that every single week, the data will be nonsensical.

Got it. So conversion metrics get put over a longer time horizon.

They can be, I think it depends on the area. And again, if you have a good rev ops or business analyst type of person, I had a really legendary one, name was Brett Madres. I was like, listen Brett, I want week over week stage conversion. He goes, mark, you let me just show you what that would look like. And I was like, oh my God, I can't tell anything from that. And so then he was the one that helped me smooth me out. Like as sales leaders, I think most sales leaders would say this. I'm not a statistician. I don't understand necessarily. Oh yeah. Until somebody tells me there's a cohort of like, hey, here's everybody that we booked a month ago. And then there's a cohort of like here's everything that happened in this month. Right. Those are two very different things. And so you really need to make sure that you have a good partner when you're doing this, otherwise you'll make a mistake. Like, like I may with the stage conversion stuff.

All right, so let's go into other common dashboards off of the Aram really quickly. You talked about three. You have a forecasting dashboard, a pipeline review dashboard and a pipeline generation dashboard. We're not going to go through literally every metric for all those. But could you just give me the high level story of if I'm, if I'm putting together my forecasting dashboard, what kind of stuff should be in there? Same with pipeline review. Same with pipeline generation.

Yeah. So when you're looking at their overall. So every week we're going to get together and we're going to look at this RM from beginning to end. And each functional leader's job is to take five minutes and talk about this is how I'm doing and here's my problem area and here's a program I'm running to do it or hey, I've been running this program for the last three weeks. This is what is resulted in. Right. So in order to understand what we need to do, you have to double click into that area. Right. What we just talked about that's where the level 2. So these other dashboards are those dashboards. Right, those are the dashboards. So forecasting all has to do with like how many deals do we have and where are they at in the sales process and what is the risk associated with each of them. That gives us a likelihood of close. Right. That would be a dashboard. That would be a double click into the selection part of that arm and you would have something that was like, you know, here's what our commit is, here's what our best case is, here's our pipeline, here's what we have that's not even forecasted right now.

Just like we talked about that for pipeline generation. When I was running an SDR Org, it was similar. It was that you start with pipeline generation at the top and that's number of opportunities, number of meetings and then you break down what are the things that feed in the number of meetings and it's volume, times, conversion.

Yeah, yeah.

So it's like how many dials are being made? How are those dials converting? Connect rate, set rate, how many cold emails are being sent? What's the conversion rate on those cold emails? Yeah, open rate, reply rate. Right. And you can start to just see this, you can start to break down the, all of the bigger pieces into smaller pieces and it just waterfalls all down from that one Master Aram dashboard.

That's exactly what. Yeah, that's exactly how it works. And one of the reasons why that's so important is because I remember several times in my leadership career where I would come into a meeting and somebody would show me data, a report that they built to answer a question and when I would go look in at how that was built and I don't know if this was always the case, but like there would be some kind of bias inside of it that maybe didn't make it look as bad as it was or make it look better than it should have been. Right. Or maybe they did, they forgot a key part of like, oh, I need to filter on this to really actually get the data that I want. I would tell you that if your managers, first line, managers, second line directors are creating their own dashboards, you absolutely must stop that immediately. If they have their own pet reports that they're using to coach their team, I guarantee you their definitions of things are different than yours. They're looking at things differently than you are. And now you have multiple teams working in the, in different ways. And now as the overall leader of the org, the data isn't Normalized and you can't tell anything from it.

I've made the mistake of having a million pet dashboards and a million. It's like the report to solve a problem.

That's right.

But the problem is, unless you literally go recreate the dashboard that you have, usually it's cherry picking a couple of parts of the problem.

Yeah.

It's like, I think the problem is a cold calling issue because our meetings are down. And so I'm going to be like, our meetings are down. Let me look at our cold calling. Set rate for not interested objections. Yeah, it's like, it's like this is down. That must be the thing. It's like, no, that needs to be one part of the waterfall equation, because that might be one contributor, but you can't understand how big of a contributor it is until you look at the other three or four biggest contributors right next to it.

That's right. And if you don't follow the customer journey, what will happen is, is your SDRs will be complaining that they don't have enough training to be good on cold calls.

Yeah.

Or your AES don't have enough training to be on negotiations. But when you actually look at it, the problem is before that, like, oh, you know what, it's not that you're not good on the phone, it's that the connection, we're not giving you good enough data to get the connection rate, that even if you were at a good booking meeting. Right. You couldn't hit your number. Right. As a leader, there's kind of the two worlds you live in. There's the world of your own thoughts and what your team is saying and then there's world of the. The world of truth. Sometimes there's like a Venn diagram. There is overlap there and what they think is wrong actually is wrong. But I would say more often than not, that's not the case. What is most painful for them, what they don't like the most, what they're biased to, that's what they're going to be loudest about, even if that's not actually the core issue. So that, yeah, metrics help you separate that. And when your reps are asking for things that they don't need help with, it's easy to show them why you're giving them the help that you are.

So let's talk about the final piece, which is I want to understand, what do you expect as a CRO from your managers? In other words, what should managers report up to their bosses if they want to start managing up with metrics and then you as a, let's call it you as a VP of sales. So we isolate it to sdra. What do you report up to your CEO basis? So let's start with manager up to VP and let's go VP up to CEO.

The beautiful part of the Aram is you create a filter that takes the entire situation and it's like, let me just see Julie's team. And it's the same exact dashboard, it's the same exact numbers, but now it's just narrowed down to Julie's team. So what I would expect if I was to be a VP of sales and I'm talking to Julie is I expect Julie to understand and look at that, see where the red spots are and have programs in place to fix those things. So what I would want her to report to me as VP is show me how many areas are messed up and what you're doing in those areas to fix them. Right. And I can look to see is she fixing eight things at once, that means she's fixing nothing. Or is she fixing like, oh yeah, you know what? She has identified the two biggest things that are probably and those are always the things that are earliest in her area of responsibility. Like you can go work on, for example, you can work on your SAL to S QO conversion, but if your SQL to S A L conversion is bad, that is more meaningful because it's just the power of math. If I improve that more, then everything downstream improves automatically. Do they have, do they understand the problem? Are they have a program in place and is it digestible for the reps? Right. That's every single week. I want to meet with that manager and be like, okay, yep, they, they're working on the right things for their team. Great.

And then for you, up to your CEO, what does that look like?

I want to now take what each team is doing and find what are the org wide trends that I need to invest in to help everybody. So let's say that eight of my 10 teams are really discounting too much. I now have the ammo. I need to go to my CEO and be like, listen, we're having trouble with our pricing and packaging and so we need to get in here and figure out like what do we need to do? Because our competitors have changed some of the stuff that they're doing and it's causing us to lose in negotiation or hey, I need a negotiation training to help my reps because it seems like everything stayed the same, but we're just giving up too Much because reps aren't confident. Right. So my job as a VP to my CEO is to find the overall business trend and where we need to invest in order to help. You know, the entire team was an area that everybody's struggling with.

And last question that might sound like a somewhat dumb question, where does forecasting come in relative to this? Because this is saying you're looking at a manufacturing line and you're like 10 small widgets are turning into this many medium widgets are turning into this many big widgets. But at no point is this like, this is our forecast for how many widgets at all are commit the key deals that are backing the commit. So how do metrics and forecasting relate? Or are they two completely separate concepts?

They're separate concepts. So this metric and this Aram and this model that we're talking about is helps you understand are your business processes working or not? Right. So you can go look at a process, a forecast isn't is your business process working or not? It's how well are we using the business processes to deliver the outcomes that we want. Right. So two very different situations. So you could have everything look great from a conversion standpoint, but if you don't have enough volume, then you won't hit your number. Right. And so that's the kind of stuff that forecasting helps you understand is like if the numbers look good, but are they still leading to the place that we need them to or not. Great.

And so if it's the end of the month and I'm giving my big sales update, call it to the entire company. My guess is there's a combination of these Aram metrics and there's probably a combination of some forecasting goal stuff. I even think about things like average deal size, for instance, or our win rate or things like that. So what, what goes into like the big state of the union of sales on a monthly or a quarterly basis? Because sometimes telling that story is hard.

Yeah. So for, for me, it's three things. One, I want to highlight the areas of the business that we're doing really well in. Right. I don't want to just tell bad news, but I also don't want to hide the bad news. So what I'm going to do is I'm going to talk about here's the two or three or wide areas where we're doing it. And then the third thing I do is I'm going to show those exact programs that we're using to get it and what we expect to happen. Because We've implemented those programs correctly. That's the, that's like the big picture from a metric standpoint. From a forecast standpoint, I'm going to talk about what is my forecast, what is my goal, what is the gap and what am I doing to close that gap in order to make sure that I hit my number by the end of the quarter.

Boom, folks, that was a hell of a lot to digest on metrics, so I would recommend you listen to us back. Also in the show notes, we're going to include just a bullet by bullet list of all the metrics that we included on the aram. Again, going from awareness all the way through expansion and you can just start to use those to build your own dashboards and start to problem solve on your own. But to recap, we covered everything from why use metrics at all. We talked about the rum, which went from awareness to education to selection to onboard to use to expand. We talked about a couple of examples where you can use metrics to solve problems. And when you start splitting metrics, you start going from L1 to L2. So if meetings booked is down, you split that into 5L2 metrics that drive that problem. And then lastly, we talked about what your dashboard should look like and where you communicate those things. Anything else before we wrap?

No. I would tell you that the sales leaders that I get to work with that get to run their own shop the way that they want to run it are the ones that have master disc because don't forget, there's three horizons that a sales leader needs to be aware of. And depending on where you're at in the org, depends on where your main focus is. There's what's going on now. That's the sales manager's job. There's a hey, let's look around the corner and peek into next quarter. That's a sales director's job. And then there's a hey, how are we going to make sure that we hit next year, which is your executive or VP's job? And so having these metrics in place allows you to look at those things and make sure that you are seeing the thing that you need to see. And when you do that, people leave you alone, folks.

Go get left alone and hang on for the next episode next week, folks. Oh yeah, and go get that metrics cheat sheet in the show notes. All right, peace out.