Proxy Measurements: How Some Numbers Can Be Misleading And Dangerous

Lies, damned lies and statistics

Lies, damned lies and statistics

People like numbers. Read a piece of text and our eyes are naturally drawn to any numbers it contains: percentages, ratios, fractions, money and even plain old numbers just draw us in.

The problem is that some people use this to their advantage by measuring things that have no real effect upon the end-goal. Check these out: –

  • Number of inches of published PR/how much it would cost if you’d paid for it.
  • Number of people who attended an event.
  • Number of business cards collected at a trade show
  • E-Newsletter subscriptions
  • Number of connections on LinkedIn; followers on Twitter, blog subscribers or friends on Facebook.
  • Numbers of likes, shares or retweets on anything.
  • One law firm I know (not a client) even measures the total number of words in their blogs – how desperate is that!

None of these numbers have a direct connection with how much revenue a business makes. People like to think they do but it’s mostly anecdotal evidence and therefore so much hocum-pokum.

So here is the definition of a real performance metric. Anything that you can relate directly to your end objective – in most cases revenue or bottom line profit.

Now, I’m not saying don’t collect numbers and statistics (I love to see how many followers I have on this blog – “oh vanity thy name is Michael”) but what I am saying is either treat them as a bit of fun and attach nothing important to them (budgets, pay rises etc.) or gather additional data that will allow them to become meaningful performance metrics.

So for example recording the number of new prospects added to your pipeline each month really doesn’t tell you anything useful (they might all be poor candidates). But if you also happen to know the average conversion rate of prospects into clients this figure takes on a completely different importance. If you also happen to have an average revenue per client figure you can estimate the effect on your  revenue an increase in prospects is likely to lead to. Now that’s a performance metric I can get behind!

Measurement by proxy is often championed by those who can’t prove their worth but feel the need to do so. They’re pointless, misleading and sometimes delusional statistics. My advice? If you see them simply ask “and so how does this affect the bottom line?” and see what happens.

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Posted in Blog, Sales Communication, Sales Effectiveness, Sales Lead Generation, Sales Leadership, Sales New Business

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