Steven Power is a master of something we all care about: generating revenue.
He did such a good job at it as the founder and CEO of ReachLocal Australia that they asked him to do it internationally, as head of global sales for ReachLocal Inc. He’s now applying his methods to BigCommerce as chief revenue officer.
BigCommerce helps small businesses quickly move their shops online by helping them turn on hosting, marketing, coupons, CRM, etc., with the turn of a key. Its 36,000 stores (clients) have collectively generated more than $2 billion in sales, cut across 25 industries in 65 countries. Steve Case, former chairman of AOL, believes enough in BigCommerce’s potential that he and his Revolution Partners investment firm just announced they were making their biggest bet yet, committing $40 million to the company. Case calls BigCommerce “the big equalizer.”
So when someone like Power speaks, I pay attention. And you should, too.
I spent a couple of hours interviewing Power on camera. We will start posting highlights of that interview in the next few weeks. But I’m eager to share with you a concept of his that I find deceptively simple.
As I grilled him for some secrets to generating revenue growth, Power revealed a gem from his tool kit. To understand why this concept is different, and, if adopted, could change how you run your business, look around for a dashboard. First introduced as a tool to help manage your business in the 1980s, dashboards are now everywhere. Amazon carries over 400 books on the topic. There are hundreds of consulting firms and software programs available. One of my clients, the IT department of a $35 billion-plus company, uses multiple dashboards for each business line.
But have you ever tried using your dashboard to drive your car? Not if you are still here reading this.
No, to drive a car you need to look across three zones: through your windshield, at your dashboard, and in your rearview window. If you are a minivan-driving father like me, you also have that curved mirror that allows you to inspect the interior cabin for threats of flying food.
So why should you think you can drive your business with just a dashboard?
Instead, Power suggests you need to track three kinds of metrics: your windshield metrics, dashboard metrics, and rearview window metrics. I am being a little tongue-in-cheek here because you can, of course, track all of these on one “dashboard,” but play along with me. The distinction this concept suggests is powerful.
Before you commit to whatever metrics you are now considering as you seek to grow your business, make sure you consider at least three sets of metrics you may be overlooking:
1. Through the windshield: When driving through the storm, you want to be able to look ahead, see when a new situation is coming. So you want to track metrics that are leading indicators--things like the number of Facebook likes or website visits you are receiving, since these things indicate people starting to engage in your brand, before they make a purchase. Thinking through the typical sales cycle of a customer, what do they do early on when they are just starting to open up to the idea of buying from you? How could you start measuring this?
2. Dashboard: These are the metrics that tell us what is going on now, things like the number of proposals submitted, number of contracts signed, and the like. What is important about these is that they are things your team can influence. At 10 p.m., when your salesperson is about to go to bed, he looks at the dashboard and realizes that if he just sends out one more email, he could notch up another client visit or quote or close. That is what you want to measure here.
3. Rearview mirror: Finally, you want to track what your amazing sales team leaves behind it, the results of doing great dashboard work, things like revenue and market share. These are likely the things that ultimately matter to your company’s health and your investors. But they are not things your sales team can directly influence with their day-to-day actions. They are lagging indicators, reasons for celebration.
So take an hour or so now, find a quiet spot in a coffee shop, and ask yourself:
• What are the one to three key leading indicators that tell you customers are gathering interest in your product or service (windshield metrics)?
• What are the one to three key activities, and their related metrics, your sales team needs to do to turn customer interest into sales (dashboard metrics)?
• What are the one to three key metrics that show why the right sales actions (defined by your dashboard metrics) are producing something worth celebrating (rearview mirror metrics)?
[Image: Flickr user Marek Detko]