Understanding the Numbers – A Guest Blog with David Brock

By David Brock

David Brock is the Author of “Sales Manager Survival Guide,” CEO of Partners in EXCELLENCE, and is a ruthless pragmatist. View David’s original post and read more of his work on his blog, Partners in EXCELLENCE, here.

When we talk about business, we quickly get to talking about the numbers–revenue, profit, EBITDA, EPS, growth, market cap, market share, customer retention, customer satisfaction, headcount, productivity, inventory, cash flow, assets, liabilities, and on and on. SaaS companies have invented their own versions of the numbers, including ARR, CLV, LTV, CAC, MRR, Churn, and so forth.

The numbers generally represent goals, or where we are in achieving those goals. The numbers aren’t what companies do, or why we do what we do, or even how we are doing those things, but they are indicators of how well we are doing those things and the progress we are making.

The numbers span financial performance, operational performance, productivity, activity, and other dimensions. Some are more important than others, some are leading indicators, some are trailing indicators, but it’s important to understand how they interrelate and the things that underly them (the what, why, how).

As a result, they are inevitably important parts of the conversations our customers are having.

Each customer and each function within our customers have different numbers that are important to them. And they measure their progress in very different ways. But it’s these numbers that are critical to them and helping them achieve their goals.

If we are to engage our customers in a meaningful way, we have to understand their numbers–those that are important to them, why they are important, what they mean. We have to understand their performance against those numbers.

We have to be comfortable in talking to them about their business–and their numbers. We have to be able to translate what we do to help them with their numbers. We have to be able to discuss how we can drive improvement in their numbers.

Sadly, too few salespeople understand and can do this. They haven’t taken the time to understand what they mean and how they can be influenced. They don’t understand which numbers might be the most important. They don’t understand how to talk to the customers about them and how to change them.

But it’s these numbers that our customers care about. And if we don’t understand them, if we can’t talk about them, if we can’t show how we can help impact them, positively, then we don’t understand our customers and struggle to have impactful conversations with them.

If we don’t understand the numbers, if we don’t understand what they mean to the customer, if we don’t understand what drives them and how we can help the customer influence them, we don’t understand how we create value with the customer.

But now, I come to another set of issues–do we understand our own number? Sadly, too often, salespeople and managers don’t understand their number. Of course, they know quota and quota performance. They may have pipeline metrics and activity metrics.

But understanding the numbers means understanding what they mean and identifying leverage points that drive our performance. But this is another blog post…