As a CEO, like me you rely on a variety of business data to inform your decisions. You need accounting and financial information to inform pricing decisions, personnel information to inform productivity decisions, and market and customer information to inform product and performance decisions. In turn you use all of this information for planning decisions, what markets and customer to pursue, what product/services to offer, and so forth.
The information your marketing organization provides is instrumental in understanding how well your organization is finding, keeping and growing the value of customers, the rate of adoption, traction, and dominance of your product/services in the market, and the rate of your growth in the market and your category. Yet, most marketing organization tend to report on information about their productivity, such as how many trade shows, press releases, campaigns and content they produced and whether these were on time and in budget and output, such as how much press coverage, open and click through rates, website traffic, downloads, views, new fans and followers, and so on and in some cases “leads” and the number of these “leads” the sales team pursued and closed.
While this information may be interesting, can you use it to make customer, channel, product, or market mix decisions? Do you know whether and how well your marketing efforts are impacting customer acquisition, retention, and advocacy? Can you ascertain which marketing efforts are most effective? Can you determine the impact, value, and contribution of your marketing initiatives on and to your business outcomes? If the answers to these questions is “not really”; it’s time to ask your marketing organization to provide a different type of dashboard – one that can be used to optimize performance and make strategic, tactical and investment decisions.
A marketing dashboard is a key component of performance management. In addition to fostering better strategic and resource-allocation decisions, a good dashboard will demonstrate alignment between marketing expenditures and anticipated results. It will also help marketing determine whether it is on track for driving demand of products according to forecasts via higher-quality leads to Sales, improved customer retention, or increased market footprint. A dashboard serves as a decision support tool that facilitates strategic decisions and course adjustment.
This article outlines five steps that help you and your marketing team create an actionable dashboard that you can use to facilitate decisions.
1. Align marketing to business outcomes.
Even though this step may seem obvious, it’s often our first misstep. If you’re not clear on what business needles you need on your dashboard, everything else becomes moot.
The business needles, or outcomes, are more than just a revenue figure. Your desired outcomes should be reflected in terms to do with which customers (new or current) you are targeting, how many of them you need to convert, and what products/services you want them to purchase. You can then develop measurable marketing objectives and define the strategies, programs, and tactics to support those numbers/objectives.
Use a mapping process or some other approach that will clarify the relationship between marketing programs and business outcomes.
2. Select your metrics.
Choose the metrics that you and your marketing organization will use to measure marketing’s impact, efficiency, and value. Many CEOs who we’ve helped in creating a dashboard select metrics that relate to how well marketing is affecting market share growth, customer value, and customer equity.
Typically, an organization will have metrics from the following categories: customers (acquisition, retention, value), products (adoption, innovation, price, and margin), competitive positioning (market share, brand preference), and financial (budget, payback).
To facilitate this step you should have quantifiable business outcomes and measurable marketing objectives.
3. Document the data chains.
Create the data chains between the marketing activities, programs, objectives, and business results. Data chains help visualize the link between marketing activities (e.g., email campaigns with a call to action), marketing objectives (e.g., a certain number of qualified leads), and business results (e.g., new opportunities added to the pipeline quarterly)—and any assumptions that your organization makes about those three factors.
4. Acquire data.
Measurement requires data, which means that you need to know what data you have and what data is missing.
5. Validate and Review.
Work out and data, processes, and measurement “bugs” before you purchase a dashboard software product.
Develop an alpha dashboard to validate the data and process. This step is essential for validating the data chains and determining, whether your dashboard captures the performance information you are looking for. Once the alpha dashboard is created, decide what changes (if any) are needed to the dashboard, measurement, and reporting process and then create a beta version.
Eventually, you will be ready to produce a pilot, after which you can tae your dashboard into production. That is when you explore how to automate reporting.
Developing a viable marketing dashboard takes time and investment, but it is well worth the effort. A well-constructed marketing dashboard will capture the most critical diagnostic and predictive metrics, and present patterns of performance, visually, at a glance.
A marketing dashboard has the ability to empower your marketing organization with the answer to the question: how are you impacting the business as a whole. Visit our site and contact us to get a free dashboard review.