Scorecards, Dashboards and KPIs – Oh My!
At the end of last year we were all thinking about setting budgets and planning for the coming year. Once Q1 came we were ready to charge into the year, full of unrealized potential and plans. Now that that we are starting the second half of the year, are you making sure that your plan and the money you are spending on marketing is as effective as possible?
Ensuring marketing efforts are guided by scorecards and dashboards will provide a better understanding of the impact of your marketing investment on the bottom line and result in smarter marketing decisions. Carving out the time to understand how your marketing efforts are performing can be difficult in the face of a busy workload but will help you better assess what’s working and what’s not early enough to make changes that can impact the company’s bottom line. Make this the year you make smarter marketing decisions throughout the entire year, pivoting based on the results before the end of the year analysis of scorecards and dashboards show you should have adjusted spending and plans earlier in the year make a difference in revenue generation efforts.
If you haven’t put them in place, now’s the time to utilize scorecards, dashboards and other measurement tools to ensure that you are spending money most effectively – and making the biggest impact on your bottom line. Here is a quick briefing on scorecards and dashboards with five hints on using these tools:
Scorecards: help you understand performance relative to plan, and enable you to align operational execution with business strategy
Dashboards: tie to operational goals and leverage reports containing Key Performance Indicator (KPI) data to help you gain insight into Key Performance Drivers so you can “pull the right levers” in your business
Key Performance Indicators (KPIs): are measurements that are tied to the goals of the organization and are a measure of how the business is progressing towards its goals. All KPIs are metrics but many metrics are not KPIs
Metrics: are simply a measurement, usually of the result of a process or part of a process and don’t necessarily indicate a resulting change. These can become “vanity metrics” such as the size of an email list or number of Facebook followers and aren’t necessarily KPIs
5 important factors to consider when using scorecards and dashboards (and using KPIs and metrics):
Have a clear purpose in what you are tracking and what you are going to do with it.
Be SMART (specific, measurable, achievable, realistic and time bound) in your data requirements.
Use “good” data. That means data that is not averages, is reasonably accurate, complete AND easy to get.
Align the use of the scorecards and dashboards with your company’s business processes so the information can get used in decision making to drive company behavior and decisions for optimal impact.
Look beyond outcome data showing history to gain insights on how your decisions and processes can be modified to get a different result – identify your Key Performance Drivers.
Provide a frame of reference using targets or benchmarks, whether internal and/or industry specific as a point of comparison.
As the CEO, the questions you should ask about your marketing efforts are:
What are the success measures of my marketing efforts? Do I know which marketing efforts are the most cost-effective? Which activities bring us our optimal type of customers?
Do I have the right information easily accessible in the company so marketing can use it to track their marketing efforts and spend? How can I help ensure the company and those in it are helping capture the information we need? Is the sales team actively participating?
Is my marketing more or less effective than my competitors? Is it more or less effective than others in my industry? Does my marketing department regularly track their progress and make adjustments based on the results so we are making better/smarter marketing decisions than last year?
Here’s hoping this year is the year your marketing efforts have even more impact on your company’s success!