1. Revenues are often disconnected from profit and your firm’s cost of capital. Sales growth is good for firms that earn positive returns on invested capital, neutral for a firm with returns equal to its cost of capital, and bad for firms with returns below their cost of capital. After the financial crisis of 2008, CFOs increasingly know this and sales leaders should as well.
2. It’s important to distinguish between efficiency (doing things right) and effectiveness (doing the right things) in measuring sales. Depending on the strategy, some salesforces require efficiency (usually cost-efficiency) measures, while others require effectiveness metrics. Probably the most commonly used efficiency metric is the sales expense-to-revenue ratio. But cost effectiveness is a more complex relationship between selling costs, revenues, sales margins and customers acquired.
3. Performance metrics should change as the market or your strategy changes so that, in their reviews, sales managers are motivating the right things for today, not yesterday. In subscription-based businesses like software and many consumer web services, for example, key metrics early in the life cycle are about customer acquisition. But as the market matures, more relevant metrics are about account management, reducing churn, and up-selling or cross-selling additional services.
4. Knowing the difference between price and cost-to-serve. Profit is the difference between the price a customer pays the seller and the seller’s actual cost to serve that customer. That cost-to-serve can vary dramatically. Some of your customers require more sales calls than others; some buy in a few, big, production-efficient order quantities, while others may buy more in overall volume but with many just-in-time custom orders that affect setup time, delivery logistics, post-sale service, and other elements of cost-to-serve.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
