20 Vital Sales and Marketing Metrics
20 Vital Sales and Marketing Metrics
20 Vital Sales and Marketing Metrics
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Today, we have abundant data, better information, fair knowledge and poor insight. Encountering wisdom is a rare occurrence! The data is out there on our spreadsheets, databases and hard disks. Here are 20 simple effective metrics for a Sales manager and a Brand Manager. It is not all these metrics, probably an ideal combination of one or two of these metrics for a given business problem can show a direction - The right direction. The wisdom is finding out the combination. I leave the choice to you. Lastly, as some one aptly puts it, A collection of data is not information. A collection of information is not knowledge. A collection of knowledge is not wisdom. A collection of wisdom is not truth.
Metric
A metric is a system of related measures that facilitates the quantification of some particular characteristic
Remember , What gets measured , gets done. If you cannot measure it, You cannot manage it
20 Metrics at a glance
1.Target achievement 2.Incremental and Growth 3.CAGR 4.Per capita per month 5.Contribution percent 6.Incremental contribution 7.Contribution Index 8.YTD 9.MAT 10.Simple Moving Average 11.Market Share 12.Relative Market share 13.Evolution Index 14.Market contribution Index 15.Rate of Cannibalization 16.COGS 17.Gross Margin and Profit 18.ROI 19.Performance Spread 20.Performance Span
1.Target achievement
Achievement vs. the Target
This can be measured at a specific time interval like Month, Quarter, Half-Yearly, Yearly, YTD (Year to date) etc. Use: To measure sales success
Growth
=
Last year sales
CAGR
End Sales
- 1
Start Sales
5.Contribution Percent
This is to measure the percent of contribution from each entity like salesman / Territory/ Brand to the total sale.
Use: To measure the degree of dependence on a brand / Territory /Salesman to the total sales
Contribution %
=
Total sales of all entities
6.Incremental Contribution
This is to measure the percent of contribution from each salesman / Territory/ Brand to the total Incremental sale.
Use: To measure the degree of dependence on a brand / Territory /Salesman to the total Incremental sales / Revenue
Incremental
Contribution
7.Contribution Index
Is a number that denotes the number of times the average contribution of each entity like territory / Salesman and Brand sales Use: To measure the relative contribution of each entity to the average
If it is more than 1, the Contribution is above the average of all, if equal it is on par else it is less than the average of all.
8.YTD
YTD : Year to Date (Similarly QTD and MTD)
Revenue/Sales form the beginning of the year E.g. On 31st March 2010 YTD sales means, sales from 1st Jan 2010 to 31st Mar 2010
= Jan -10 + Feb-10 + Mar-10 + Apr-10 (sales) = 1-Jun + 2-Jun + 3-Jun + 4-Jun (sales)
MTD 4/Jun/2010
9.MAT
MAT : Moving Annual Total Last 12 months Revenue/sales
E.g.: Feb 2009 to Jan 2010 sales are called MAT Jan 2010 Sales
Use: As it data is for the past 12 months, comparing two points of MAT data evens out the fluctuations
MAT Jan-10
MAT Jun-10
SMA of sales
(20 Days)
=
1 day to 20 day sales average, 2 day to 21 day sales average, 3 day to 22 day sales average,4 day to 23 day sales average,..
13.Evolution Index
Evolution Index is a number that denotes the rate of brand growth vs. the market Growth in a given geography
If the resultant index is more than 1,the brand is growing faster than the market. if equal it is on par with the market
Evolution Index
=
100 + (Market Growth%) X 100)
15.Rate of Cannibalization
Cannibalization is a process where the new introduction (say the line extension of a brand) eats in to sales of the existing brand ( say the Mother brand) from the same organization.
Use: To measure to assess the impact of new introduction on the existing brand
19.Performance Spread
Spread is measure how many entities* have performed on or above the benchmark ? * Entities can be salesman, brands, SKUs, territories, areas etc
Spread is often measured at a specific point of time like
* Spread is at a specific point of time, hence showing the point of time is essential ( Like YTD Jan 2010)
20.Performance Span
Measure of How often the performance is on or above benchmark in a given time frame is Span.
Measured for a time frame like Jan-Dec,Day1-Day31 etc. Use: To measure dispersion of success across time frame and also predictability of success and risk.
* Span for a given time interval, hence showing the time interval is essential ( Jan 2010 to Dec 2010)
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