Dashboards seem to be all the rage these days. The pressure to demonstrate value, be more accountable, and improve marketing return on investment is driving marketers to develop dashboards. The VEM marketing performance studies consistently reveal these are two areas where the C-Suite still feels marketing falls short. Aberdeen believes that dashboard in the analytically enlightened organizations enable organizations to make smarter decisions.
Marketing Dashboards Versus Visual Reports
When we start working with a company we ask to see what they are using today to report their performance. What we often see is really just a visual report that is tracking program progress and budget. While this may be useful information at some level it is not a marketing dashboard. A marketing dashboard is typically a multi-layered graphical tool that brings critical information about the performance of the organization in order to facilitate faster and more accurate decision making, alert users to issues or problems, increase visibility into marketing activities, and improve effectiveness and efficiency. Think of your dashboard as consisting of all the necessary dials and gauges that 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.
A marketing dashboard should help you answer basic questions about the effectiveness and efficiency of your marketing. The questions can be financial, operational or comparative in nature. For example, here are some questions an organization may need its dashboard to help answer.
- How fast are we growing compared to the market and our major competitors?
- Are conversion rates along the pipeline improving on a month-to-month or quarter-to-quarter basis?
- How many qualified sales-ready leads are we producing for the ABC market or segment or region?
- Is our share of preference growing faster than our competition?
- Did we reach our annual average order value for XYZ market or segment or region?
- Did we achieve the rate of product adoption among customer set Z for product A?
- Is our rate of customer acquisition on track?
- Is the cost to acquire new customers within acceptable parameters?
- How are each of the marketing programs performing against their performance target within the cost and time parameters?
Marketing Dashboards Should Communicate and Prove Value
Your dashboard must in some way communicate the impact you are having on the business and your progress against the performance targets. In addition to providing this type of information a dashboard should also serve to alert users that something is amiss. For example, the dashboard should alert you to whether –
- the qualified lead rate or pipeline contribution level is going below an acceptable level.
- the average order value is falling below normal
- discounting is going above the acceptable level
- customer churn is going above the acceptable level
- product/customers is going below normal
- share of preference is declining below the target
Making decisions is dependent on having the right information and alerts. Without these two components it will be difficult to know what to do, for example whether to increase spend on a particular program or kill it or what changes are required in the marketing mix.
We have found that the lack of processes and data and the wrong metrics often hinder a company’s ability to create an effective marketing dashboard. Metrics and key performance indicators (KPIs) are the heart of any dashboard. Knowing which metrics to track depends on your company’s business strategy. So the first step is to define your metrics, KPIs, and performance targets and insure they are linked to the business outcomes. This is essential for measuring performance; otherwise you will not be able to relate your work to your contribution to the business.
To create the dashboard you are going to need to know which systems or databases provide the data, the format of this data, how to extract, clean and analyze the data and where to move it to populate the dashboard. Once you have developed and implemented the dashboard, the challenge is going to be deploying it and using it. Companies that resource their marketing performance measurement and management initiative with the right people and tools and establish a process for collecting the performance data, for tracking and reporting marketing performance tend to be more successful in improving their performance and ROMI.
When we work with companies in the area of marketing performance measurement and management, and they begin to understand the scope of work, some of them ask us? Is a dashboard really important and will the effort be worth it? The Aberdeen study found that companies with a dashboard see significant improvement in marketing information visibility, time to marketing information, and speed to marketing decisions. Their research found a strong correlation between the implementation of a marketing dashboard and return on marketing investment. So the answer to both questions is a resounding Yes.