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Evaluating Technology

Joe Romello

You need to have your people, processes, and data identified before you begin selecting your technology.

Let’s start with how to measure the business. What are the KPIs for your business?

If you are a for-profit business, then you care about profit. Which is the difference between revenue and cost. Pretty simple, right? Yes, it is, IF you are operating a lemonade stand and your parents provide the lemonade, table, and signage.

We are not talking lemonade stands here though.

Business Level KPIs

Revenue is your billings for products and services, typically monthly, but can be other periodicities. Your products and services can be transactional at the time, subscription-based, retainers, display advertising, licensing, etc. The types of revenue matter to your accountant but for the business, the top line is an indicator.

Cost is the amount of money it took the business to deliver the products and services. There are two distinct types of cost: direct, the actual money it takes to produce the products and services (labor, cost of materials, transportation, etc); and, indirect, the money that supports the delivery of products and services (accounting, business insurance, technology, accounting/benefits administration services, bank fees, etc.).

Profit is then revenue minus cost. Although profit can be looked at as gross profit, the difference between revenue and cost. There is also net profit which is gross profit minus taxes and other special fees. However, if no profit is being generated the considerations of gross and net are really moot!

At the executive level (CEO and Board) the KPIs are revenue, cost and profit.

Business Department Contribution to Business Level KPIs

The business KPIs do not directly apply to the operating divisions/groups/departments of the business. Marketing, for example, has no direct contribution to revenue; marketing doesn’t deliver any goods or services to customers. Marketing does contribute to the Cost of the business.

The triad of marketing, sales, and service delivery generates revenue. Marketing's objective is to generate qualified leads for the sales group; sales'  objective is to take a qualified lead and make them a customer of the business; and, service delivery's objective is to make every customer a satisfied customer who generates repeat business and/or referrals to others.

Arguably, these three functions are the most important in any business. Depending on the size of the business some of these can be combined and/or provided by a small number of individuals – in some cases, a function may even be outsourced. However, a business without a mechanism to identify new prospects and turn them into satisfied customers will not be a business for very long.

So, let’s understand the specific KPIs of each of the three main departments of the business which directly feed into the business KPIs of revenue and cost, which determines profit.

Marketing will identify targets and cast the business net into the target population to identify qualified prospects. Qualified is defined between marketing and sales but in general, a qualified lead has: shown interest in the business; is in a position to move forward to acquire the business services; and, has some sort of budget in mind for the services. As always, these generalizations are caveated by “depending on the business”.

Sales take the handoff from marketing and proceed to specify the product/service, timeline, and price resulting in a proposal of some sort that then is negotiated into a contract for product/services. The process will involve the delivery folks since they are responsible to perform the agreed-upon work between prospect and business.

Now the delivery folks are now responsible to make a satisfied customer after the contract is signed. They also provide the key to the business; they generate the invoices which become the business revenue. In addition, delivery also sets the tone for follow-up business with this customer and engages with the customer to exploit referrals by the customer to marketing.

Marketing KPIs

The marketing department is responsible for generating qualified leads for the sales group. While the definition of qualified is negotiated based on certain criteria between marketing and sales, the end result is that leads emerge from marketing, which is forwarded to sales to close.

The methods and mechanisms employed by marketing vary with the industry, product, and services of the business, but the goals are the same no matter the business. Target likely prospects of the business’s goods and services, create interest in the Brand, provide testimonials and references, provide webinars, white papers, case studies, highlight customer stories, etc. to bring prospective consumers of the business goods and services to the business.

Marketing is the lead end of the customer funnel. The wider the mouth of the funnel, the larger the number of prospects for the goods and services of the business. Realistically, every prospect will not become a customer, thus the need for a wide mouth on the funnel. Marketing will utilize analog and digital tactics to reach the target audience and generate interest in a conversation, visit, proposal, etc.

The key metric for marketing is the number of qualified leads that are entered into the sales pipeline for maturation into customers. Marketing will employ advertising, acquisition campaigns, conventions, website(s), email, etc. to sustain the brand image in the marketplace. All of this activity results in one thing – qualified leads that are handed to sales.

Since marketing is at the very beginning of the business pipeline, they look at certain measures to guardrail their activities and spending. The key measure is lead acquisition cost and can be simply calculated by dividing the total spend of the department by the number of qualified leads handed to sales.

Thus, the marketing KPIs are the number of qualified leads and lead acquisition cost.

Sales KPIs

The sales department sits between marketing and delivery. Sales looks to marketing to keep the sales funnel full (to overflowing). Sales is responsible to take qualified leads and convert them into paying customers. In general, a qualified lead has the budget to acquire the goods/services of the business, has a start date in the imminent future, and is at least a significant influencer, if not the decision-maker, on the decision to engage.

Sales then nurtures the Lead through references, referrals, and past accomplishments coupled with an insight into the lead’s desired outcome. Sales coordinates with delivery to ensure that promises made can be kept, timelines are realistic and achievable and that success, as envisioned by the lead, can be achieved.

A proposal or statement of work is then authored by sales, coordinated with delivery, and negotiated with the lead, hopefully to success.

Sales is selling more than a result, they are selling the culture of the business to: achieve customer success; support the customer post transaction; and, provide training to customer staff.

Thus, the key, some say only, metric of Sales is to convert leads to customers. Clearly, the conversion rate needs to be far, far higher than the marketing lead generate rate. A key element to closing business is the reputation of the business on the successful delivery of projects for other Customers.

Delivery KPIs

Finally, the rubber meets the road with delivery. Marketing has identified qualified leads; sales has nurtured these leads into customers; and, now, the expectation of the customer needs must be satisfied.

Delivery are the doers of most organizations; they make the magic happen. They have familiarity with what is expected because they participated and agreed in setting the customer expectations with sales prior to the deal being consummated.

Managing the expectations of the Customer through the inevitable changes that occur during the life of the contract is the principal effort of the manager of delivery. As the nuts and bolts of the project come together there will be changes, clarity in requirements, induced delays, and induced accelerations in the timeline. All of these have an impact on the initial expectation that was painted prior to ink on paper. But change is constant and inevitable! So, the delivery manager must interact with his customer counterpart to ensure that expectations are kept in line as change occurs.

Through all the ups and downs of the project, the delivery manager is charged with ensuring that the customer is satisfied, as that is a contractual achievement. In addition, the manager looks for additional work for the customer and referrals that can be passed to marketing/sales for entry into the pipeline.

Thus, the revenue (a business KPI) flows when delivery invoices for work. The delivery manager will be incented to achieve customer success with the least cost – not cheapen the success – but be efficient in the utilization of Business resources to achieve success for this, and other, customers.

Orchestration and Efficiency

We can now see that marketing and sales are done at a cost to the business. Lead acquisition is a measure of marketing efficiency. The sales closure rate is the measure of sales efficiency, also at a cost. Delivery generates revenue, also at a cost.

Each business is unique, and we can’t provide guidance on that range of numbers for lead generation, closure rates, and cost of delivery. They must be known within a business so they can be managed. One can construct a simple model of each to see initial ranges or look at history to calculate actuals. In either case, measuring each of the department measures will provide the basis for the cost of products/services. Efficiency can only make the profit better.

Technology and Its Role

Bill Gates said, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

The Data to be collected is clear at the top level, for each Business the actual data elements will be many and varied. The processes that you developed will now be automated so that the people that have the skills you need to deliver will be able to make the magic. The people, process, and data need to be identified prior to applying the technology to give yourself the best chance of achieving efficiency.

Having done that, the key to efficiency in the marketing – sales – delivery cycle is to record, refine and pass along the lead to the customer journey of expectations. Each presentation, email, call, visit, document, etc. that was exchanged, ideas that were discussed, brainstorm sessions that were had, et al, need to be available to the business independent of a department to ensure the best chance of success for both the business and the customer.

So, some technology generalities, which will apply to all businesses:

  1. A website that presents the business from the business perspective. Customer testimonials, industries served, solutions provided, customer service, FAQs, collateral information, community environment for sharing, etc. The website is the ONLY place where the business gets to author and present the business. There are templated websites that can be tailored to any business and custom websites that can be developed. The key decision is efficiency – how to get the best possible exposure quickly and accurately. And, keep in mind that EVERY website can be modified – it isn’t a building that will stand the test of time.
  2. Back off applications that are used for correspondence, email, presentations, generating proposals, invoicing, timekeeping, billing, payments, etc. Start out small and build up, efficiently grow based on demand. These can be owned and/or leased or a combination thereof.
  3. Payroll and Benefits applications. Unless you are a CPA firm, find a provider. It will reduce your OODEP liability, insurance, and exposure to mistakes of tax laws, pre/post payroll deductions, etc. A provider will also imbue confidence in your staff – remember the culture embodied in your staff.
  4. Marketing Automation – email campaigns, digital ads, advertising, conference/convention follow-up, etc. Depending on the size and scope of your business this is done in-house or with a service or a combination of both. The MOST important aspect is the data collected, not the prettiness of the graphics on the email, marketing brochure, etc. The data will provide insight and understanding of the market, the identity of your brand in the market, and the consumption of content of your brand. The data is the key result of all your marketing; make sure you can get it easily.
  5. Customer Relationship Management – this is way more than a contact repository for all to see although contacts are in there. This enables your marketing, sales, and delivery departments to provide different data points on your leads and customers and the journey from lead to customer to follow on business and/or referrals. These systems are always leased – even if you are a software business - you don’t have the resources to compete with the plethora of CRM systems on the market today. While your staff in marketing, sales, and delivery will come and go, the data and chronology of interactions with lead and customers, corporate data, will reside in and belong to the business.
  6. Project Management software. Another necessity is to keep track of the activities of internal projects and customer projects. Who is doing what when, when are things to be completed, how is progress against the goal, are resources under/over-utilized, etc. Don’t rely on you or your staff to keep track of the different tasks, assignments, actions, etc. keep it so that you can be efficient.

These are the basic functional areas of technology that you will need – whether you are a solo entrepreneur or have 10s or 100s of staff. Remember Bill Gates and efficiency. Don’t be afraid to make changes – thoughtful changes – to processes, people and data.


Efficiency in conversations occurs because the language has words that have meanings. Conveying ideas, concepts, and expectations are done through language. The language words provide portrays the meaning upon which the ideas are then conveyed.

Data within a business is the language that is a part of the culture of the business to deliver goods and services. Ambiguity results in confusion which reduces efficiency. Efficiency leads to a maximum profit for the business.

Thus, clear definitions of the business measures will provide a path to a clear understanding throughout the business. Define the steps and stages of marketing, sales, and delivery so that all know exactly what a status report by any department means to anyone in the company.

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