I have seen a lot of entrepreneurial scorecards, and one thing is consistently missing…  the client’s perspective.  Some businesses track NPS which asks customers/clients how likely they are to recommend the product or service to their friends or colleagues, but this is only a good starting point.

The challenge with NPS is that it is a very macro/high-level metric, making it difficult to take a specific action. Tracking your client’s experience more specifically can enable you to take the right action sooner to positively impact how your clients navigate their experience with your business. You may ask: What is involved in measuring Client Experience over and above NPS? Mapping out the Client Experience/Proven Process/Client Journey more specifically provides the framework for breaking down silos and aligning the business to improve the Client Experience.

This blog will provide you with ideas to leverage your Scorecard to improve your client’s experience and drive profitability. We will look at:

• Client Experience as the Alignment Point for Your Business
• External Metrics: Measuring your Client’s Perspective
• Internal Metrics:  Delivering the Experience
• How This Approach Drives Profitability

Client Experience as the Alignment Point for your Business

Entrepreneurial Scorecards typically have a lot of internal metrics associated with individuals and departments. Sales, marketing, and operational metrics are tracked with the goal of acquiring and serving more clients.  I find it curious that the client’s perspective is usually missing from most scorecards. We have written a good bit about mapping out the client experience. The big idea with using a Client Experience Framework is to remove friction and provide a seamless experience for your clients from the time they learn about your business until you maximize the value you can provide them.   There are two perspectives on Client Experience metrics – external and internal.

External: Measuring the Client’s Perspective

External Client Experience metrics are about gathering feedback from clients that is specific to the stage they have just experienced. Let’s use a relatively generic Prospect/Client Experience for context:

1. Qualify
2. Discovery
3. Proposal
4. Launch (onboarding)
5. Client Success (ongoing service delivery)

Properly measuring your client’s perception of how these areas work together allows you to immediately make an impact.  For example, it is no secret that an effective onboarding process drives long-term retention and profitability (more on that later!).   Gathering your client’s perspective on the onboarding process with two simple questions provides insight as to what you can do right away to improve:

• Rate your experience with our Launch/Onboarding Process on a scale of 1-10
• What are two things that would have made your experience better?

There are no internal metrics that could deliver actionable insights better than that!  While it is important to get your client’s perspective, tracking internal Client Experience metrics also drives efficiency and profit.

Internal: Delivering the Experience

Adding a Client Experience layer to leadership, departmental, and individual metrics provides a couple of big benefits:

• It helps you ensure your scorecard is connected from the leadership down to the ground level 
• It helps you understand where to focus on improving your people, processes, or message.

Once you have your Client Experience stages mapped out, there are a couple of internal metrics to consider tracking:

1. Conversion Rates: What % of clients move from one stage to the next?  This is particularly effective when looking at the Ideal Prospect Experience.  This is the process of turning prospects into clients (aka sales process).  This is a great indicator of how much friction is involved in each stage and also helps you zoom out to understand where to focus.  For example, looking at the stages above, if 85% of leads move past the Qualify step, but only 25% move past the Solution Definition/Proposal stage, then it might be time to look at the Qualify Process.
2. Time in Stage: How long are prospects and clients spending in each stage?  This metric is particularly effective when looking at Client Experience stages that are more operational, like Launch/Onboarding.  If clients are taking too long to move through the stage, it can impact client satisfaction/retention as well as profitability.

Tracking internal and external Client Experience metrics is a great way to enhance client experience while driving profitability.

How this Approach Drives Profitability

Getting everyone moving in the same direction can be a challenge. The Client Experience perspective breaks down internal silos and converges the business around the most important thing – your clients! Gathering and acting on client feedback helps focus your team on making a positive impact in the right place to drive client satisfaction drives and retention. This, in turn, drives profitability.  According to Bain and Co, increasing customer retention rates by 5% increases profits by up to 25% to 95%  What are you doing to improve and measure the way your clients experience your business?

The process of developing the right scorecard for your business can be frustrating and is a journey. Does any of this sound familiar to you?:

• Am I tracking the right metrics to support my business?
• I have hopeless, long streaks of red for certain metrics on my scorecard.
• Are my metrics at the right level (Leadership, Departmental)?
• Some of my metrics make it difficult to take the proper action.

The purpose of this blog post is to help you break through these challenges.  We will:

1. Position the difference between leading, lagging, and activity metrics.
2. Describe the ideal state of an actionable scorecard.
3. Help you determine what metrics should be on your scorecard at what level.

Lagging, Leading, and Activity Metrics

One way to think about metrics is that they are on a vertical spectrum to align with the leadership hierarchy. On the upper end of the spectrum, you have lagging metrics. These are the metrics that you would find on a business plan or V/TO®, and you might also find them on the leadership scorecard.  On the lower end of the spectrum, you have activity metrics and would likely see these at the departmental level and also have individuals that own these activity numbers. Leading are on the spectrum and fit somewhere in between. Let’s look at each one:

Lagging Metrics: Lagging metrics are closely connected to the business’s high-level goals.  The challenge with lagging metrics is that they are hard to affect on a weekly basis.  An example of a lagging metric is 12-month rolling revenue.

Leading Metrics: Leading metrics give you an early indication of whether or not you will be meeting your business goals and lagging metrics.  While an early indicator, leading metrics are not always easy to control on a weekly basis. Examples of leading metrics for sales reps would be proposal/win rates or retention rates for an Account Manager position.  An example of an operational metric is Onboarding Client Satisfaction.

Activity Metrics: Activity metrics are based on the activities you must do to ensure the leading metrics trend in the right direction and the business goals are met.  The idea with activity metrics is to be able to look at your activity metrics when you close out your week on Friday and know if you had a good week.  Examples of activity metrics include # of outbound calls made or # of social posts. In short, lagging metrics are what you are trying to achieve, activities are what your team needs to do, and leading metrics let you know if you are getting there.  Now that this context is understood, let’s look at the ideal state of a scorecard and what metrics you should be tracking and on what level.

Scorecard – Ideal State

In its purest sense, a mature scorecard consists only of the metrics that you can control on a weekly basis. What is a mature scorecard?   A mature scorecard is where the metrics are tight from top to bottom. The activities that you are doing are going to drive the leading metrics that directly drive the lagging metrics and high-level business goals.

So, you should see a lot of activity metrics on departmental scorecards.   As you move up toward the leadership level, there are likely fewer activity metrics.  That said, any leading metrics should be closer to the activity metrics than the lagging metrics on the spectrum we discussed above.

When you are tracking the right activity and leading metrics, there is limited value in tracking the lagging metrics on a weekly basis, especially when you come down from the leadership scorecard.  Until you get to that point, it sometimes helps to have visibility to leading and sometimes lagging metrics.

Lagging metrics on lower level scorecards can have a negative impact because they are not actionable. This is likely the case if you see 13 weeks of red across your scorecard. It is a de-motivator.

When you see long streaks of red or green for activity metrics, you could be tracking the right metrics but not changing the target goals for the metric, making it hard to take the right action.  Ensure your goals:

• are achievable goals within reach
• motivate not deflate

What metrics on what level?

Understanding what metrics to put on a leadership scorecard vs. lower-level scorecards can be a big challenge.  The rule of thumb is that you should have the metric at a level that can be controlled.  For example, # of outbound calls made should not be on the leadership scorecard, and the retention rate should not be on the scorecard for the Sales Development Rep (SDR) team.

Metrics on the leadership scorecard should be actionable for the leader that sits in the seat, even if it is not an activity metric. For example, # of qualified leads could be the primary marketing metric tracked on the leadership scorecard.  If that number is off, the sales and marketing leader should know what corrective action their team should take by looking down a level at the sales and marketing scorecard.  Activity metrics to support # of qualified leads might be # of calls with referral partners or # of social or blog posts.

As we have said, turning your scorecard into a true asset for your business is a journey.  We hope this helps you navigate your journey towards developing a scorecard to drive your business results.

Developing a tight, mature scorecard is a journey worth taking if you want to take your business to the next level.  Introducing a scorecard into your business can be frustrating and make you wonder: Am I tracking the right metrics to support my business goals? Do I have the right targets?  Is my scorecard actionable?

It is hard to know where to focus if you don’t have a good scorecard. Should you focus on the people?  The processes? Or isn’t your message with your  Ideal Client? When your scorecard is mature, it is the perfect tool to help you diagnose where to take the proper action to focus on people, processes, or messages to move the business forward.

We will break down each of these in future blogs, but let’s look at what a mature scorecard might tell you about the most important assets in your business: The People, the Processes, or the Message.  

A “mature” scorecard is a scorecard that has evolved to a place where the right metrics are tracked and providing the right information to move the business toward its goals. For context, let’s use a sales team as the use case.

People

Conversations with your people are how you diagnose if the problem is with the people, processes, or the message, so let’s start there. A good indicator that you might have a people problem on your sales team is that the same sales rep(s) are underperforming despite documented sales processes with sales tools.

Looking at two reps helps provide context for this:

• Superstar Sally: Consistently closes 60% of qualified leads
• Mediocre Matt: Consistently is under 40% close rate for qualified leads.

If the quality of the leads is the same, and the process is documented and followed, then it is time to take corrective action with the underperforming rep.  The EOS® GWC™ is a great tool to help ensure you deal with the people problem appropriately:

• Do they Get it?
• Do they Want it?
• Do they have the Capacity to do it?

Experienced leaders can peel this back in their normal process of LMA to take the proper action to help their people level up, move into a different seat, or exit the business.

Process

If Superstar Sam (50% close rate) and Mediocre Matt (40% close rate) are handling their qualified leads differently, then it is not a people problem, but a process problem.

Superstars may be able to meet their sales numbers independently, but less experienced team members like Matt can still perform with process.  The good news is that a tightly documented process will not only help Matt, but Sam and the rest of the rest team will win more as well!

If you discover that you have a process issue, start with the desired metrics that the process is designed to drive, and take a close look if that process truly enables your team members to perform their regular activities.

Message

If your processes are documented and your people are performing, consider looking at the message. Having the right message is important from when a prospect finds you to the point that they are happily renewing or extending their engagements with your business.  

If you have the right message, you seamlessly convert leads into prospects, prospects into clients, and clients into raving fans.  Measuring the different conversion points across your client’s journey can help you understand if prospects and clients have the message they need to navigate your business.

Conclusion

As we said, turning your scorecard into a true asset for your business is a journey, but it is a journey worth taking.  Starting to measure is the first step. This lets you have a baseline, allowing you to evolve your scorecard and take proper action to improve your people, processes, or message.