Once Upon a KPI: How to Track Marketing & Business Development Performance

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Are you making up stories when it comes to understanding and interpreting your progress toward achieving strategic initiatives? Or do you genuinely have meaningful data for informed decision-making?

A boat can move forward without a rudder, but the captain is powerless to steer it in the intended direction. Winds, waves, and currents will continually change the direction of the boat, no matter how much the captain attempts to steer against these environmental conditions. Maybe the currents are friendly and move the boat toward the target destination. More likely, the boat will ultimately reach a destination far away from the intended one.

In the business world, we develop strategies to reach specific destinations. We define our markets, profile ideal clients, staff companies to deliver the required services, develop marketing programs to generate interest and demand, deliver work to high-quality standards, and develop long-term relationships with our clients.

Throughout this process, we typically identify Key Performance Indicators (KPIs) to help us understand where we are in our journey and help us change course or take corrective action. Some typical business KPIs for AEC firms include revenue, profit, and utilization.

These metrics act as a GPS (to help us know where we are) and a rudder (to help us navigate toward our intended destination).

Unfortunately, on the “Get Work” side of our business—known as marketing and business development—we are often blindly floating at sea, at the mercy of the winds and currents. We don’t track enough metrics, much less have a good sense of the key indicators that are the most important for helping us achieve our goals.

A ship without a rudder may be going places, but we won’t know the destination until the ship arrives. That’s no way to run a business.

Metrics Versus KPIs

A metric is simply a measurement of something. There are dozens of marketing and business development items that a firm can measure, and they vary in levels of importance. In many instances, metrics are measurements of tactics.

On the other hand, a Key Performance Indicator is a higher-level metric used to determine success against important goals. Think of KPIs as strategic metrics. Companies use these as their rudders to ensure the boat is headed in the right direction.

Consider the axiom of “What gets measured gets done.” We can’t measure everything; if we did, we’d be drowning in data. On the surface, it would be easy to say that a firm’s metrics are the KPIs; however, if a company is not measuring the data that matters most, it is not tracking KPIs.

Consider a strategic goal to increase bookings from new clients by 10%. Most firms are looking to grow new clients to replenish business from existing clients and grow the company. Note here that I’m using the term “bookings” to represent work that has been contracted. The revenues – another critical measurement – might be spread out over multiple periods, like months or years, but the “booking” is a one-time measurement.
If a firm had $1,000,000 in bookings from new clients during the last period, the new goal would be $1,100,000. Progress toward this $1.1M figure becomes a KPI.

For example, let’s say this firm’s goal period is one year, and they are at the six-month mark at the point of measurement. Their total bookings goal for the year is $5,500,000, and their YTD bookings reveal the following:

  • Bookings from Existing Clients = $2,300,000
  • Bookings from New Clients = $425,000
  • Total Bookings = $2,725,000

With a one-year bookings goal of $5.5M, the total YTD bookings represent 49.5% or almost half. The firm is tracking roughly where it needs to be to make the year-end goal.

However, when analyzing the bookings for new clients, the firm determines that they are only 38.6% of their year-end goal. Theoretically, new client bookings should be around $550,000, or 50% of the goal. The breakdown of new to repeat bookings is simply a metric. However, because the firm has identified new client bookings as a KPI, they can use this data as a rudder and adjust their marketing and business development efforts accordingly.

Maybe they need more outreach to prospective clients – email marketing, trade shows and conferences, client organizations, etc. Perhaps they need to re-evaluate their pursuits. Maybe they need to focus on generating more inbound leads. Whatever the decision, they are now aware that they are falling short of a strategic goal and need to take corrective action.

Note that KPIs rarely live in a vacuum. There are outstanding proposals, the overall opportunity pipeline, and other metrics informing the new client bookings KPI. For instance, although the example firm is behind its goal for new client bookings at this moment in time, perhaps there are more than a million dollars in proposals to new clients. At a 40% hit rate, the firm anticipates another $400,000 in bookings with new clients in the short term.

Making KPIs Cultural

As you work toward having more intentional KPIs at your firm, here are some steps to take:

    1. Identify the metrics that will be the most meaningful for tracking marketing and business development success. These will typically be based on your strategic goals. What is the company trying to achieve strategically? How do the marketing and business development plans align with this? What goals are in place that need to be tracked to determine success? And remember, if it is not measurable, you’ll be relying on a “gut feel” when it comes to understanding your progress toward a goal – which is no way to manage. Consider the SMART Goal framework: Specific, Measurable, Attainable, Relevant, and Time-Bound. If it is not measurable, it is probably not a strategic goal.
    2. Determine if your firm can track these KPIs right now or if new mechanisms (processes, technologies) need to be implemented. It may be relatively easy to select the most critical metrics, the KPIs, only to realize that the infrastructure is not in place to track the KPIs right now. In the example scenario of new client bookings, if you are not tagging opportunities with a code to distinguish new clients from existing clients, how will you know how you are doing or if you need to correct course? Furthermore, where are you tracking this information? Do you have a robust, effectively-used CRM database, or is it garbage in – garbage out scenario?
    3. Regularly update and distribute KPIs to key stakeholders and goal owners. Once you have identified the metrics to track and selected the Key Performance Indicators, you must now do something with the data. For starters, monitor it. Then, determine how often it will be reviewed and distributed. Do you need real-time data? Weekly? Monthly? Quarterly? For most KPIs, a monthly review is appropriate. For longer-term goals, perhaps quarterly makes sense. For KPIs to be useful to a firm, they must be collected, distributed, and reviewed.
    4. Utilize KPIs for informed decision-making, agility, and course correction as necessary. Don’t fall into the trap of merely sending out the data and believing you are done. If this data truly serves as a rudder for your ship, key stakeholders and goal owners must discuss the KPIs regularly to determine what actions, if any, need to be taken to reach the destination (strategic goals). This is why agility is so important. Maybe the tactics supporting the strategy are not working. Maybe the market conditions have changed. Maybe the goal no longer makes sense or needs to be significantly altered. Effective KPIs can help us determine critical decisions that need to be made.

There’s no need to create fictional stories to guesstimate how your firm is doing in marketing and business development. Establishing, tracking, sharing, and interpreting Key Performance Indicators is critical for a firm to understand progress toward strategic goals. However, a company needs both the infrastructure to track these vital metrics and a culture that promotes regular review of KPIs to allow for course adjustment when required.

Are you confused about metrics and KPIs? Wonder which ones your firm should be tracking? Watch this complimentary Stambaugh Ness webinar, The Critical KPIs of Business Development & Marketing, to determine how you’re really doing. Effectively utilize KPIs to improve your firm’s strategies.

Scott D. Butcher, FSMPS, CPSM

Categories: Marketing