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Banishing the Quarterly KPI

June 1, 2016 · Jeremy Boudinet · 10 Minute Read

Ambition COO Brian Trautschold was a recent guest on B2B Nation: Smarketing Edition. Run by TechnologyAdvice, the podcast tackles the most important topics in B2B sales and marketing today.

In Brian’s episode, he and Josh Bland discuss how goal setting is changing over time, why quarterly KPIs are so antiquated, and why marketers are becoming more transparent.

Below is an excerpt from the conversation.

Josh Bland: How do most companies structure their KPIs?

Brian Trautschold: Most companies look at goals and think about their quota. Whether that's a sales quota or marketing quota, they're thinking about a big number on the organizational level that should be hit. Best case for them is normally quarterly; however, a lot of times even looking at a yearly number doesn’t happen. We talk to dozens of companies every single day, and these aren't typically dynamic start-ups. They're Fortune 500s, traditional, large sales organizations, and that's how they're setting goals for people. They aren’t breaking KPIs into manageable steps.

Tools that exist in the market are changing that. We can track, measure, and set goals for teams, and individuals. Whether it is a customer service person, a salesperson, an SDR, a marketer, we can set targets, benchmarks, and goals on a day-to-day, weekly, monthly, and quarterly, yearly basis. It's an exciting time to be in sales or in marketing because so many new tools are coming out at the same time. They can all work together. We can bridge this gap. Typically someone had to run a report in Salesforce and send it out at the end of the month. That's ending; however, there's still a lot of room for growth.

JB: Are most companies structuring their KPIs incorrectly then?

BT: A lot of companies have problems. I don't want to say that everyone has it figured out. We've seen a big change in the sophistication of those customers. As we went from young, more dynamic companies who want to do something that's game-changing to stauncher, older, bigger, more stratified companies, they seem to have problems.

I'm breaking this into a two-part equation. One part is the metric side. That's where Ambition got its foothold and is still able to quickly provide value for companies. Tracking metrics, whether it be for someone in marketing and how many MQLs or SALs they've developed a month, or just how many leads they've brought into the system versus by how they're optimizing content or what they're doing online. Those can now be tracked in real-time. We can show how people are doing against targets. That's incredibly important because you want that accountability on a day-to-day level. You want people to be transparent with how they're doing.

Part two that I think we didn't even latch on to until recently, until our customers more or less demanded it, was that personal development is really poorly tracked. All these young people come into the workforce and say, "where do I want to be in five/ten years? How do I become that person?" A lot of companie are just looking at the metrics, they're saying, "did you hit quarter this year? If you did, great, we'll talk about it. Did you do this this month? Great."

They aren't developing in terms of, "Hey, Josh, what do you want to be next?" "Oh well, I want to take TechnologyAdvice content to the next level and I want to be the VP of marketing." We're seeing companies now embracing this smaller more transparent goal setting on a continual basis, something that managers have done but haven't really tracked the data all the way through.Now we can build those goals in a platform, track how people are achieving them, track where they're falling off and we can most importantly have alignment throughout an organization.

If the VP of sales comes in tomorrow and says, "I want everyone in the organization to close this many dollars this year. I want people to have this many opportunities in this pipeline." I'm going to put a subgoal-- each of you are talking to the 20 Fortune 500 companies by the end of the year. Now we can track that goal that is organizationally aligned, that matters for everyone, and we can see how we're doing against it. It's not something that takes second fiddle to quota or some of these larger, frankly, harder to achieve and harder to break down into shorter period goals, 100%, 200%, whatever the biggest number I can get is.

JB: Is the quarterly KPI antiquated?

BT: Think about a diet. If you only measured the calorie intake that you had, on a quarterly basis, 90 days down the line, you would have no opportunity to course-correct. So you'd get 90 days in, and you'd say, "Oh man, I've been eating 500 too many calories everyday." Or "I've been walking 1,000 too few steps everyday." When you break these organizationally driven goals - like a quarterly quota - into bite-sized chunks that are manageable on a day-to-day, weekly basis, now sales reps, marking people, customer-service people, they can course-correct. And they can set sub or related goals to those metrics or to those benchmarks.

Now they can say, "man, I'm not closing enough deals. Manager Jim, what do you think I could do to close more deals? Go schedule more meetings face-to-face?” Alright, now I'm going to go do that. I'm going to talk Jim every week, or every day hopefully, about how I'm scheduling more meetings. And that's going to, over time, affect, do I make this quarterly number?" Having the big goal - the big, audacious quarterly goal, end-of-year goal - is still great. What's important and what's changing is, there would have to be aligned relational goals that feed into that on a shorter period. If you didn't do it yesterday, you ought to make sure you do it today. And if you do it today, hopefully you'll do it tomorrow, and each week will be better and better. What we see is this-- to us it looks like data, looks like how organizations are improving in a data-driven manner. But it's really how people are changing behavior, how they're changing or more optimizing their own work-flow on a day-to-day, weekly basis, that feeds into the big, audacious goals their companies set.

JB: Why do so many companies use Excel and why is that bad?

BT: Josh, you have some goals. You probably have some big yearly goals that you want to accomplish. You have small targets that you want every quarter, every month. You're probably doing multiple of these podcasts every week, did you hit that number or not? If that lives in a spreadsheet that is either, A, inaccessible, or, B, not very interesting, not very friendly to users, we're just not going to check it, and then these things are going to be missed, there's going to be informational silos, there's going to be lack of updating, or different information stories being told around the company, and so you lose alignment.

Our generation is data driven. We are engagement driven. We want to look at our phone and know something immediately, or better yet have data come to us when things are important. It feeds into real time information, actionable intelligence, and transparency. If a number is in jeopardy, if a target's in jeopardy, somebody should know so that we can course correct or make adjustments.

Every single day I talk to a company that said, "I set this goal whether it's my marketing team, or customer success team for the month and gosh darn it these guys, they missed it and I don't know what to do." It's like well you talked about it on May first and you're not going to look at it again until May 30th, and so of course there's no transparency.

Accountability is being lost in the chain and you're making it harder on yourself and everyone on the team to hit those goals that you set by not providing them real time feedback clear transparency. And so I think it's something that's rapidly changing in the minds of companies, whether it's big like Oracle or small like Ambition, where we know that the data that runs our business has to be accessible for people to see.

JB: How important is transparency to this equation?

BT: Look at Slack, even Salesforce. Fifteen years ago, having a system where everyone could see the opportunities I was selling into, that'd be a little bit controversial. People would be like, "Oh, I want to protect my accounts. I don't want other people to see my leads." And now Salesforce, even though they only have 18% of the market, they're still the gold standard. You're seeing Slack change.

Every organization that I'm a part of, whether it's professional or my work at Ambition, whether it's investors using Slack, all this data is now flowing freely. Conversations are flowing much better than email, of course. They're much more transparent than emails, so I see no evidence that goals will be stuck. If anything, I think that the trend and data is going to become more open. It's going to become more accessible. It's going to be easier to visualize, to track trends, and we're going to be able to make better data-driven decisions, because that data is out there in the wild, not locked in some spreadsheet that you may or may not be able to access.

This podcast was created and published by TechnologyAdvice, a Nashville, Tenn.-based Inc. 5000 company that is dedicated to lead generation services. Interview conducted by Josh Bland.

Ambition: Hold Reps Accountable to Sales Performance

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