Gaining Insight Into Marketing Results: The Value of a Marketing Dashboard Laura Patterson President & Author laurap@visionedgemarketing.com About VisionEdge Marketing Experienced Practitioners Founded in 1999 and headquartered in Austin, TX, VisionEdge Marketing, Inc. serves more than 1 customers, and counting. VisionEdge Marketing, Inc. is a data-driven and metrics-focused marketing firm that specializes in improving marketing performance and creating competitive advantage designed to attract, secure and retain profitable customers. Services Include: Marketing performance management Marketing and sales alignment Product and strategic marketing Pipeline re-engineering Professional development Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 2 Session Objectives 1. The State of Marketing Performance Management 2. The Role of Marketing Ops in MPM 3. Marketing Ops MPM Roadmap and Tools. The Dashboard the ultimate performance management tool Need the math behind the creativity, John Seifert, chairman-ceo of Ogilvy & Mather North America The top challenge for marketers remains to better quantify and measure the value of marketing programs," in spite of improvements in accountability over previous years. CMO Council Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 3 Page 1
The Business Climate Remains Challenging Tough economic environment Constant change Tougher buyers More competition Increasing complexity Reduced business investment Overall we're seeing sales cycles getting longer 7% of sales executives report a more than a 25% increase in the length of their sales cycle 8% of sales executives report that they now need 25% more leads to close a deal. (IDC 29 Tech Sales Barometer, released January 29 and CSO Insights) Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. Increased Focus on Accountability Marketing is under increasing pressure to: Show impact on the business Demonstrate accountability Communicate its value While proving ROI on marketing performance is nothing new, the recession increased the emphasis on accountability and analytics, and this will continue even as a recovery gets under way. BtoB 1/18/9) Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 5 Why Companies Invest in Marketing Understand the market and customers Develop and execute a strategy to create preference and consideration that enables the organization to Acquire more of something Acquire it faster Acquire it cheaper Otherwise, might as well just put more feet on the street Need to demonstrate we are getting the job done Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 6 Page 2
Marketing s Job is to Produce 1. Find Profitable Customers The process of acquisition New customer acquisition net new business These Three Roles Relate to What Matters in Business Find/Secure Profitable Customers Keep Customers Grow Customer Value Best-in-Class Marketers Leverage These Capabilities 2. Keep Profitable Customers The process of retention/renewals Engaged customers more likely to renew 3. Grow Profitable Customers The process of increasing the value of your customer franchise and brand - cross-selling Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 7 Acquisition Market Share Penetration Lifetime Value Monetization Brand/ Customer Equity Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 8 Measurement Competence Pressure has mounted on marketers to accurately predict, measure, and optimize results (Marketing Sherpa 29) Analytics and Skills Lack employees with specific marketing analytics expertise (Forrester 28) Less than half of respondents use analytics More Strategic Metrics Nearly everyone says business with existing customers is important, few use metrics such as length of customer tenure, purchase frequency and recency, value of the overall customer base, customer lifetime value and share of wallet Better Tools and Process Shockingly low investments in marketing technology and still immature processes (IDC Dec 28) Real success will come from being smarter and more strategic in operations (B-B 29) (Alterian 29) Other than leads to conversion, track little else. (VEM 29) Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 9 Page 3
These Organizations have Made A Transformation What is a Performance-Driven Organization? 5 Characteristics of a Performance-Driven Marketing Organization To Being Performance Driven - They Design and select metrics that measure marketing s impact on the business Ground metrics in data and analytics Use metrics that measure efficiency, effectiveness and payback Create a measurement management system and consistently use it Capture performance metrics as quickly as possible in order to instigate immediate change in execution Report results and performance in real- time Performance Management the process of measuring progress toward achieving key outcomes and objectives in order to optimize individual, group or organizational performance. Have a set of measurable performance standards, a pointed focus on outcomes, and clear lines of accountability - all of which are important if a marketing organization wants to prove its value. 1. Established clear standards of performance and metrics 2. Aligned resources, policies, and practices 3. Results tracked and reported against performance standards. Data and performance target are used to drive continuous improvement and to hold the entire system accountable for performance. 5. Analytics are used to facilitate factbased decision making Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 1 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 11 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 12 Page
The Rewards of a Performance-Driven Marketing Organization Performance-Driven Marketing Organizations Adopt Five Best Practices Hence the Emergence of Marketing Operations Better insight into customers what they want and what messages will resonate Greater message continuity More effective allocation of resources Fewer underperformers on the sales team Higher win rates Improved customer acquisition and retention Stronger customer loyalty and equity Greater customer share of wallet Create a performance measurement system based on data and analytics Adopt a framework that identifies metrics that impact organization s economic performance and strengths Link marketing to business outcomes Embrace a culture of accountability Add the right skills, systems, and tools Marketing Ops owns the processes, infrastructure and reporting that enables Marketing to operate more like a business, with formalized At a minimum, Marketing Operations should: 1. Drive the processes for budgeting and investment decisions and more effective strategic planning. 2. Identify and implement the required infrastructure to maintain the consistent implementation of processes. 3. Lead the charge for marketing performance measurement processes. Marketing Operations Defined: An operational discipline that leverages processes, technology, guidance and metrics to help run the Marketing function as a fully-accountable business. Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 13 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 1 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 15 Page 5
Marketing Ops Organizational Glue Reinforces the marketing strategy and tactics with a scalable and sustainable infrastructure, to create and nurture a healthy, collaborative ecosystem, and to help derive achievement of the enterprises business outcomes. Provides the infrastructure and policies that are necessary to coordinate marketing activities. Assures that both the marketing spending and the marketing mix are based on solid financial terms. Serves as an interpreter by translating the languages between the marketing and finance. Operates with a performance dashboard that is consistent with the enterprise s strategy m Facilitates the translation between budgets, marketing activities, and accomplishments into a language that is meaningful to finance and the rest of the leadership team. Six Steps for Creating a Marketing Ops Function Marketing Ops Roadmap Components Strategic Infrastructure Change Context Management Data Organizational Structure Process People Alignment Organizational Priorities Applications Culture Market and Competitive Systems Policies Assessment Tools Marketing Operations Planning Charter Plan Process Engineering Scope Resources Analytical Responsibilities Adoption Management Target Setting Role Maintenance Measurement Timing Benefit Tracking Benchmarking Cost and Timing Capabilities Business Case and Implementation Assessment Functional Design Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 16 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 17 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 18 Page 6
Marketing Ops The Science Side of Marketing Marketing Ops Facilitates Accountability AMA Defines of Marketing Accountability 1. Defines strategy and align initiatives, metrics, people and tasks with the organization s business outcomes 2. Works with the marketing leadership team in the development of the marketing plan 3. Supports marketing personnel to ensure they are focused on and measuring their contribution to the marketing objectives, strategies, programs and activities. Monitors the marketing organization s progress against performance targets and detects gaps and problems 5. Measures performance using key performance indicators (KPIs) so that issues and gaps can be resolved early Marketing ops is pivotal to transforming Marketing into a performance-driven organization. It plays an instrumental role on your road to marketing excellence. Accountability by its very nature means Reporting A monitoring and reporting results enables fact-based decisions Marketing Ops is instrumental in creating and managing the dashboard Truly accountable marketing requires that marketers demonstrate alignment between marketing expenditures and anticipated results, and that this alignment is being audited and optimized. The responsibility for the systematic management of marketing resources and processes to achieve measurable gains in return on marketing investment and increased marketing efficiency, while maintaining quality and increasing the value of the corporation. Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 19 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 2 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 21 Page 7
A Marketing Dashboard Key to Accountability What is a Dashboard? The Marketing Dashboard The Ultimate Performance Management Tool Has all the necessary dials and gauges to tell you where you are, where you re going and at what speed along with indicator lights that illuminate at the first sign of a problem Enables organizations to measure, monitor and manage business activity using both financial and non-financial measures Provides an overview marketing goals and objectives, and real-time insight on progress toward each objective A multidimensional view of data and their interrelationships. Executive dashboards are essentially designed to provide summary views of data and alert users to values that are significantly above or below expectations demonstrating the strategic value of marketing. A dashboard is a visual display of the most important information needed to achieve one or more objectives; consolidated and arranged on a single screen so the information can be monitored at a glance. Stephen Few, Information Dashboard Design (26) Metrics and KPIs (key performance indictors) are the building blocks for creating a dashboard Dashboards and Scorecards Multilayered performance management systems that enable organizations to measure, monitor and manage business activity using both financial and non-financial measures Categories for the Marketing Executive Dashboard Customer Acquisition and Retention Customer Advocacy and Value (LTV, Margin, Loyalty, Share of Wallet) Customer Equity Product Innovation and Adoption Competitive Positioning/Market Value Index (share of preference, rate of growth) Remember the Money Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 22 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 23 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 2 Page 8
Use the Dashboard To Show how marketing is moving the needle Assess what is and isn t working Foster decision making is actionable Provide a unified view into marketing s value Enable better alignment between marketing and the business Translate complex measures into a meaningful and coherent set of information Dashboards only work if they are tied to a structured action process It must do more than just measure, needs to be used to foster decision making Metrics are the Foundation Choose Metrics that Matter need to be relevant Start with the organization s core business outcomes Clarify how marketing objectives and initiative contribute to the outcomes Assess your data Select metrics that measure the contribution effectiveness, efficiency, value Every metric on your dashboard should clearly connect marketing to the outcomes Remember find, keep and grow New customers number, rate, etc. Executive Level Metric New Customer Acquisition Rates and Product Adoption Rate Operational Level Metric Number and cost of qualified leads and Trials Functional Level Metric Program performance Top Line Revenue as an outcome Executive Level Metric - Operation Metric Pipeline Contribution Dashboards Take Analytics Analytics The Ability to Drive Actionable Insights from Data Critical to facilitating better and faster factbased decisions Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 25 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 26 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 27 Page 9
Analytics Take Data Dashboard Data Chain Marketing Dashboard Layers Performance Management Organizations: Embrace data - See Data as the foundation for success Get the best data possible and use it in a pre-defined, unbiased way Install and use a data management system Create and maintain a data inventory Objective results Activity results vs targets & costs Outcome results & value Program results vs targets and cost The Metrics Framework Helps Develop the Dashboard: Executive level Strategic level monitors and measures performance against business outcomes and marketing objectives Operational level Marketing management tracks performance of core marketing strategies and processes Tactical level Functions and individuals analyzes performance at project or activity level as they relate to the first two Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 28 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 29 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 3 Page 1
The Making of a Dashboard Dashboard Questions To Address Why Isn t This a Dashboard? Outcome, Objective, Metrics and Performance Target Development Review and Revise Data Collection and Assessment Pilot Dashboard Alpha Dashboard Review And Revise Review and Revise Beta Dashboard Will it be corporate-wide or unit specific? Who will be responsible for inputting data and keeping the Marketing Dashboard current? Where will this data be housed? How will it be accessed? Which key stakeholders in the organization need to be involved? Will the Marketing Dashboard be introduced in selected geographies or rolled-out globally? Will it involve internal metrics, external metrics, or both? Design and develop new merged intranet site Implement guidelines for continuous improvement of marketing and sales intranet site Program # Automated Online Direct Marketing Set up Profoma (Access to online direct marketing materials - customized, printed, shipped & tracked) Link to Virtual Warehouse Program #5 - Create four regional Marketing Prog Define Markets requiring emphasis, implement direct marketing program Evaluate Mid-west BAXSaver opportunity Progra Can you tell how marketing is contributing the business? Can you assess what is and isn t working? Can you make a decision? Do you know where the gaps are and what is causing them? Production Dashboard The development of a marketing executive dashboard entails these steps. Corpoarate Capabilities Presentation Maintainance and create new materials needed Enhance access and ease of use Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 31 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 32 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 33 Page 11
Revenue Deals Leads Market Share Leads Cost Make the Dashboard Actionable Business Outcome Level Example Two Outcomes Marketing Objective Level Example Two Objectives Margin and Marketing Contributed Deals The usefulness of a dashboard is in the precipitation of action to correct performance variances therefore it is essential to know what conditions trigger action Set thresholds for alarms/alerts Look at trends as well as current data Pre-define response actions for yellow and reds alerts Establish standardized rules for reporting variances and corrective action 5,,5, 3,5 3, 2,5 2, 1,5 1, 5 Market Share 35 3 25 2 15 1 FY8 1Q9 2Q9 3Q9 Q9 Time 5 Enterprise Performance to Actual Market Share Performance to Target Time # 1 Player Target Enterprise Actual Market Share Target Enterprise actual Category Ownership 2 18 16 1 12 1 8 6 2 2Q8 3Q8 Q8 1Q9 2Q9 3Q9 Q9 Time Marketing Contribution Market Share Outcome Lead and Cost Performance 18 16 1 12 1 8 6 2 1 9 8 7 6 5 3 2 1 Qualified lead target Qualified lead actual Margin Number of Opps and Cost Market Share Lead and Deal Performance 2Q8 3Q8 Q8 1Q9 2Q9 3Q9 Q9 Time 2 18 16 1 12 1 8 6 2 Marketing Deals Target Marketing Deals Actual Qualified lead target Qualified lead actual Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 3 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 35 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 36 Page 12
Qualified lead target Qualified lead actual cost/qualified lead target cost/qualifed lead actual Leads Dollars Lead Deals Campaign Level Example Margin and Opps Make the Data More Meaningful Dashboard Elements 16 1 12 1 8 6 2 16 1 12 1 8 6 2 Marketing Marketing Deals TargetDeals Actual XYZ Campaign Lead to Deal Performance Qualified lead Qualified lead target actual Market Share Initiative: Campaign XYZ Lead to Cost Performance 12 1 8 6 2 3.5 3 2.5 2 1.5 1.5 3Q9 Q9 Leads Cost Actual to target results and costs significantly off what would you do? Marketing programs are investments that are intended to deliver specified benefits dashboard data needs to indicate when one or more benefits are at risk Define the alerts green means something is within target performance, yellow means something is outside of target performance (on functional level could indicate a schedule or cost overrun), red indicates a serious variance or deficiency that signifies potential failure What needs alerts? Whether actual performance is not keeping up with planned performance Whether actual costs are out of line with the expected costs AND outside ROI parameters An increase in yellow alerts usually indicates worsening conditions An increase in red alerts usually indicate corrective action is not working Alert Icons indicates the condition of the KPI Trend Icons represents how a KPI is behaving over time Progress Bars to indicate relative progress toward a positive quantity in a real number Gauges uses to assess both positive and negative values along a relative scale Bar Charts for categorical analysis Line Charts to show progress of one or more measure over time Tables and Lists for non-numeric data or data that has relationships not easy to visualize use for data that doesn t lend itself to easy numeric analysis Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 37 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 38 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 39 Page 13
New Product Revenue (%) Revenue by Segment Partner Thousands Using Alerts 1.8 1.6 1. 1.2.8 1.6..2 1Q9 2Q9 3Q9 Q9 1Q1 RFID 35 5 Govt & PubSafety 195 335 515 Route 15 5 15 Healthcare 25 35 Retail 5 55 25 2 15 1 5 Overall partner revenue is up only slightly over same period prior year, however the number of partners is down, from 257 to 238. Launches producing better product adoption rate 25 2 15 1 5 Marketing lead gen focus on RFID is paying off. 3 2 2 2 1 1 2 3 1 2 2 3 2 Q1 Q2 Q3 Q Mfg/Whs Retail Healthcare Route PubSafety RFID Other 16 1 12 1 8 6 2 Service Engagements Length of engagements Expanding, cost to serve increasing closed open total Things to Remember Develop a Dashboard that: Shows how marketing is moving the needle Helps assess what is and isn t working Fosters decision making is actionable Provides a unified view into marketing s value Enables better alignment between marketing and the business Translates complex measures into a meaningful and coherent set of information Wrap Up, Thank You and Questions Focus on accountability is not going away Performance management takes new skills and data Marketing Ops is a pivotal role for the performancedriven marketing organization Dashboards fall within the domain of marketing ops and are the ultimate performance management tool Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 1 Improve Your Probability for Success www.visionedgemarketing.com 1999-21 VisionEdge Marketing. All rights reserved. Not for reproduction or redistribution without written permission. 2 Page 1