Numerous acquirers have asked how to increase productivity in
different aspects of their organization, especially sales. My first
question back to them always pertains to their manageable metrics.
You would be surprised how many companies do not utilize metrics,
or numbers, to manage their business. Too often, when they see
problems arise, it’s because they don’t have a handle on these ratios
and assumptions. We have frequently heard, “that guy doesn’t know
his numbers.” What this really means is that he doesn’t understand
and manage the metrics that drive success in his business.
Metrics are “standards of measurement” and can help run and manage
every aspect of an acquiring business. In most organizations, a
plan is created before a new venture or channel is unveiled. That
plan has certain assumptions that drive the business model. Those
assumptions must be measured and tweaked often as the assumptions act
as the foundation of the entire model. For example, if your model
was based on 50 new accounts per month and you are only able to
achieve 25, your break-even and profit points would be extended. You
might adjust your marketing plan or even reconsider investing further
in the enterprise. This is a basic example, but illustrates a
point. Continual evaluation of the metrics and assumptions are
necessary in the decision-making and continual evaluation process.
Most sales organizations use basic metrics to manage productivity.
One organization I work with manages a CAPS report. CAPS stands
for: Calls, Appointments, Presentations, Sales. They claim that
companies’ ratios between the four are fairly constant. An example
would be that 100 calls yield 10 appointments which produce six
presentations and eventually two sales. If this metric held true and
they wanted representatives to close five accounts per week, they
would need to manage the reps to 250 calls per week. However, if the
250 calls were only producing seven appointments the manager would
know to work with that rep on appointment-setting skills. Likewise,
if the rep only had one sale out of his six presentations, the
manager would know to focus on the rep’s closing skills. There are
also acquirers that utilize one team to set appointments and another
to sell merchants. Managing both groups by a set of metrics can
assist management in determining which appointment setters produce
better leads and which sales reps are better closers. It is
important to note that a company will manage to specific metrics, but
these ratios are averages. Each rep and each appointment setter will
have his or her own metrics. The individual must be managed
appropriately as part of the whole.
Another area where ratios are managed carefully is on the help desk.
Average speed of answer (ASA) often has a direct correlation to churn
rate. When making budget and hiring decisions, ASA is managed
closely to minimize attrition and maximize revenue. A difficult but
often necessary decision contemplated by many acquirers at budget
time is how much can I reduce ASA and not lose more merchant revenue
than employees cost reduction. Similar metrics are used every day in
application submission, chargeback/retrieval processing, and even
production and product.
Understanding the numerical drivers of a business are crucial.
Managing these metrics help drive sales, control costs, and increase
efficiency. As a growing acquirer, apply metrics or numbers to every
facet of your business and manage them closely, monthly at a
minimum. As organizations grow, it becomes even more important. Not
understanding or getting hold of these numbers too late can be
devastating. Major problems grow out-of-hand if not caught quickly.
Managing the numbers, or by metrics, is the key to any growing
acquirers success or failure. 
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