How do you Measure your Managed Data Center Business?

Posted 5.11.10 by
wpadmin
Blog

Quite frankly, we want to be the best so I work hard to find the best way to measure and benchmark ourselves against others in our industry. Currently I’m zeroed in on a few very high level metrics. I’ll share those and I’d be curious as to what you think and what measures you use.

I identify 3 key functions: marketing and sales to generate orders; operations to turn orders into clients who love us; and finance and administration to make sure we keep as much of the money we earn as possible and make sure that the rest of the company has what it needs to win.

For marketing I focus on the “cost” and “value” of every lead as measured by the campaign that generated the lead and the total gross margin of the contract we close from leads that turn into orders.

For sales I rely on Bessemer Venture’s CAC ratio which measures the return on new business development (sales and marketing). It’s a measures of time to return the cost of making a sale. Click here for it’s calculation.

For operations we measure cycle time and client satisfaction. We need to do things quickly (so revenue starts) and we need to do them well, as defined by the client. Another key metric is churn. Our outstanding client service keeps our churn low, though we have seen, in this economy, churn mostly from business closures.

For finance I measure EBITDA (which is also very close to cashflow for us) and it’s leverage. As a capital intensive business we know that we will need to leverage the business, but I very carefully monitor it. If the leverage is too low, we’re not being aggressive enough with growth; if it’s too high we’re being too aggressive.

The management team and staff use a number of other metrics but I tend to focus on these. Any thoughts? What do you do?

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