Moneyball News – Summer 2023
Motivational Moment
“If there are nine rabbits on the ground, if you want to catch one, just focus on one.”
— Jack Ma, Chinese business magnate, investor and philanthropist
STORY TIME
Conjunction Junction To Productivity
There are two ways to grow your business—more volume or better productivity. Schoolhouse Rock showed us with Conjunction Junction the result from being joined or united or linked. Here’s our thoughts on Productivity KPI’s that show your team has their activities joined, united, and linked to achieve desired outcomes.
Simplicity: Often there are too many KPI’s. Wouldn’t it be easier to stay big picture with sales looking at leads (volume) and close rate (productivity) rather than a KPI for each sales process step? Two sales people sold 10 units. The first has 100 leads and closes at 10%. The second has 50 leads and closes at 20%.
The first needs coaching to overcome objections to improve productivity. The second needs a pat on the back to build their confidence to obtain more leads. Less is more.
The Right Metric: A client stated their Gross Margin has been great. Is higher always a good thing? Beware of optimal measures like Gross Margin. Would you rather sell one unit a month for $2,500 or two units at $2,000 each? We recommend the primary metric be Yield rather than Gross Margin as it accounts for inventory turn (or team utilization).
Categories: Adding KPI’s rarely solves the problem. Rather, break down your primary KPI’s into categories —perhaps by location, product, or department. For example, Product categories shows hats and shirt have a fantastic Yield, so you want to add more of those products or increase margins. Shoes and Jackets have a low Yield to evaluate lower prices and reducing supply.
Personal Development: Keep in mind KPI’s are just numbers. Their purpose is to set expectations, recognize success, and identify opportunities to help your team achieve personal success.
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