There once was a business-to-business website that sought to bring buyers and sellers together. When it started out it had a simple philosophy: Have as many sellers as possible and the buyers will come.
Its web team focused on getting as many sellers signed up as possible. They had signup targets every month. They met them. Within six months the website boasted thousands of sellers. They had an aggressive search engine optimization strategy that brought lots of visitors to the site. But these buyers weren’t buying. The website was a flop.
A few years later the organization decided to try again. This time the metric became: get as many leads as possible for our sellers. They defined what a lead meant and put a monetary value on it.
The new web team focused on quality, not quantity. They worked with the sellers to ensure that they were describing their products and services in a way that buyers could easily find and understand. They had less sellers on the site, but the ones they did have were of a higher quality. It was a lot of work but it paid off. Leads started flowing to the sellers and the website became a success.
The first attempt to launch the website was measuring inputs: how many sellers can we get? The second attempt was measuring outcomes: how many leads can we get for our sellers? There is a world of a difference between the two.
It’s easy to measure inputs. It’s harder to manage outcomes.
I’m sure you’ve heard the management mantra: If you can’t measure it you can’t manage it.
Just because you can easily measure something does not mean you should manage it. Sometimes we choose to manage things simply because they are easy to measure. It’s easy to measure the number of visits or page views, but that is rarely an effective management model. In many situations it can be a disastrous management model as it encourages bad practice.
The original web team was obsessed with getting sellers. It didn’t matter how poor quality they were. It was all about maximum volume in minimum time. They managed what was easy to measure and easy to do. It doesn’t take a lot of talent to fill a website with garbage.
It’s much harder to measure leads. There are different types of leads. You have to work with your sellers a lot more. There’s often education and training involved. While any junior person can add a seller to a website, it takes a professional to reject a potential seller, explain to them why they were rejected and what they need to do to be accepted.
The buyers who came to this website were there for a reason: to find a quality seller. The fact that they contact a buyer is good for both parties. Of course, you can take this type of metric further. You can begin to measure how many leads turned into sales. And then how many of the buyers were actually satisfied with what they bought.
Measuring outcomes is hard, but does that mean we shouldn’t do it? Measuring inputs is easy, so does that mean we should do it? Are we saying to ourselves: “I don’t have time to do it right, but I do have time to do it wrong?”