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Marketing Performance Out of Alignment? A Good Dashboard Will Focus and Inspire

Does your company suffer from any of these symptoms?

Marketing is not seen as having a direct impact on the organization's financial performance.
Functional silos within marketing seem to be operating independently and fighting for budget dollars and attention.
With the swarm of marketing initiatives, no one is clear on which ones are really contributing the most to the bottom line.
Marketing budgets are set on what was spent in the past year, not on what was achieved in the prior 12 months or on new company goals.
Finance isn't buying into the ability of the marketing mix model to link brand attributes to revenue or profits.

If so, you might want to think about how a marketing dashboard can help build marketing's alignment with organizational goals and increase marketing's accountability to enhancing the bottom line. A good dashboard reflects what's going on in marketing, what resources are deployed, to what end, and what ROI is expected for each initiative.

Most companies have pockets of activity where they can measure ROI. Interactive media and direct marketing, for example, lend themselves well to measurement. But sponsorships and brand advertising don't. And while most companies have picked the low-hanging fruit of accountability, few have developed a comprehensive way to link marketing expenses to specific business results. (It is possible to align 100% of marketing dollars, but 80% or 90% might get you where you need to be.) Consequently, few have truly earned the trust and confidence of the CEO, CFO, or executive committee.

That's where the new trend toward marketing dashboards comes in Īݠin building alignment and accountability, thereby creating both better marketing ROI and stronger support companywide.

What Is a Marketing Dashboard?
Some think it's a software program. Some think of it as a one-page summary of results. Both descriptions are right ... and wrong.

The creation of a marketing dashboard is a fairly deep undertaking with lots of moving parts. Every one is unique by virtue of the different industry characteristics, company cultures, and information flows. Nevertheless, we will boldly attempt to offer a description here, albeit in an over-simplified and generalized manner.

To begin, a marketing dashboard is not a thing but a process of succinctly and simply reporting on the progress marketing activities are making toward achievement of business objectives.

An effective marketing dashboard balances the measurement of short-term programs and initiatives with the monitoring of brand and reputation asset growth over time. Some of the metrics on the dashboard are diagnostic, looking at what has happened already and trying to discern why. Others are predictive, using the diagnostic experience to forecast future results under various assumptions of resource reallocation.

Figure 1 — The Marketing Dashboard

Why Bother with a Marketing Dashboard?
The C-level wants hard evidence to continue to invest in marketing. Metrics also help management identify areas for improvement as well as renewal at budget time.

Marketing dashboards improve the return on marketing investment, yielding better results per dollar spent and stretching dollars farther. They also:

help clarify and define the role of marketing in the company;
create a learning organization that makes decisions on hard facts supplemented with experiential intuition rather than lots of intuition punctuated by a few facts;
establish clear roles and responsibilities, creating job satisfaction and a culture of performance and success; and
elevate marketing accountability to earn the trust and confidence of the CEO, the CFO, and others throughout the company.

A successful marketing dashboard excels in its simplicity. With an eye on your dashboard, you can make immediate decisions to keep your ride smooth and guide your passengers — the company, its employees, its shareholders, and its customers — en route to their destination.

Marketing dashboards connect data points in a way that enables you to see how any one marketing action affects the entire enterprise. If you crank up a promotion, surging fuel through your marketing engines, you need to see the outcomes for the enterprise. In addition to sales volume, these include more insightful components like the rate of cross-sales, penetration of other product categories, customer satisfaction, and brand awareness — all of which help to determine the nature, frequency, and timing of future promotions and marketing efforts.

How Do You Build a Marketing Dashboard?
First of all, remember that a marketing dashboard is a process, not a thing. With that in mind, the following path will provide the most useful and practical end result.

Identify Business Drivers
If you can, start by identifying the real business drivers — the things that really make the register ring for your company. Use a combination of analytics and research to identify the drivers of financial success. Seek to understand the relative contribution of components like:

location selection
customer service
inventory management
pricing
quality
packaging/bundling
distribution
brand awareness/equity
promotional response.

This knowledge is not terribly difficult to get, but assembling it demands a methodical approach that may take six to 12 months, depending on your category and the quality of your transactional database. You can take a temporary shortcut by using some facilitated management survey techniques to draw out the collective wisdom of the management team as a starting point.

With the business drivers identified, you can more precisely and confidently develop the "Role of Marketing" map.

Map the Role of Marketing
The Role of Marketing map lays out the hierarchical relationships among:

the company's financial objectives,
the strategies intended to achieve them,
the customer value proposition(s) required to deliver on the strategies,
the business processes to deliver on the value proposition(s),
the information systems to support the business processes, and
the organizational skills, structures, and culture required to pursue the objectives successfully.

Figure 2 — The Role of Marketing Map

Basic financial goals always boil down to cash flow (a.k.a. profits) plus intangible assets (brands, customer relationships, distribution channels, etc.), adding up to overall shareholder value. While your specific metrics will vary, look for the highest order financial goals along these lines to be the ultimate target of your map.

At the next level, strategies tend to include some variation on the themes of:

product/service leadership — being the best product or service. Think Lexus.
niche domination — being so close to the needs of a subsegment of a market that you obtain competitive advantage in satisfying it. Gymboree Play & Music won over the high-end preschooler interested in an indoor workout with more personal attention and nicer facilities than the local YMCA.
customer convenience — leveraging customer relationships to cross-sell deeply. Verizon bundles local, long-distance, and wireless phone along with Internet service in a single bill to create a barrier-to-exit.
low cost position — engineering cost reduction so far below competitors that price becomes the defensible differentiator. Wal-Mart has this strategy perfected.

The customer value proposition then comes into play as the core of the Role of Marketing. Its purpose is to move customers to behave as you would like them to — trying your product or service, extending their relationships with you, or remaining loyal to you in the face of competitors. The customer value proposition often mixes elements of pricing, quality, brand image, distribution, feature, and function to successfully leverage the company's strengths or exploit competitive weaknesses.

Achieving the desired customer value proposition often depends upon strong process execution in several supporting areas of operations, product development, customer service, regulatory or social issues management, etc. These processes guide the organization to focus and execute on the things most directly required for success.

Figure 3 — Sample Role of Marketing Map

Undoubtedly, most of these critical processes will have as baseline needs some form of information management platform — not just the technical pieces of computers and data networks, but the way information is shared and used around the company. Most often, these platforms go beyond internal process facilitation, reaching outside of the company to suppliers, distributors, and, in some cases, customers.

The organizational elements of the right skills, structure, and cultural characteristics set the foundation for the successful delivery of information management, process, customer value proposition, strategy, and financial objectives. Without these well-developed organizational basics, no amount of gymnastics at higher levels will deliver consistently on the company strategy.

The Role of Marketing map helps to clarify marketing objectives and priorities. It also helps to identify the relationships between traditional marketing intermediary measures (brand awareness and equities, product trial, customer retention and satisfaction, distribution, etc.) and the ultimate business results of revenues, profits, and shareholder value.

Figure 3 might represent a company that manufactures products purchased directly and installed or assembled by end users. The blue bullet points under each of the process, value proposition, and strategy components are possible metrics that could give shape to a marketing dashboard.

Link Goals to Objectives to Tactics
Armed with the Role of Marketing map, developing a marketing dashboard may seem to be somewhat anticlimactic. But the marketing dashboard is really how the Role of Marketing becomes institutionalized as an action plan that galvanizes effort and expectations behind critical success factors.

The best marketing dashboards clearly map out the "many-to-many" relationships between marketing goals, objectives, and tactics/initiatives (see figure 4). The mere process of deciding what are the goals vs. the objectives vs. the tactics brings all marketing department activity to the fore, exposing gaps and redundancies for the benefit of continuous improvement.

Figure 4

Prioritize and Weight
After mapping the relationships, the next step is to prioritize or "weight" the contribution of each tactic to the achievement of objectives, and each objective to the attainment of goals. Analytical techniques can help establish these relative weightings if data is available. More likely however, you will need to discuss and debate the weightings as a group to build consensus on which elements of the map really drive results. This approach, while often contentious, builds extraordinary alignment between marketing teammates and truly focuses the department on its priorities.

Building the actual physical dashboard is then a function of determining which specific metrics best reflect exactly what you choose to measure for the most heavily weighted drivers. Be careful to choose metrics that will engender the right kind of organizational behavior and not pervert the way business gets done. The right metrics lead to long-term profit growth, among other favorable outcomes. But haphazardly chosen metrics lead to counterproductive activities that can destroy progress toward corporate goals.

(Read about the seven pitfalls to counterproductive metrics and the six steps to the right metrics in Metrics: You Are What You Measure.)

Designing Your Dashboard
Now that you know what belongs on your dashboard, how do you execute it? We wish we could give you the three easy steps. But alas, there is no definitive format for a marketing dashboard because the process trumps the output tangible report. Still, we won't leave you without a few guidelines.

Keep your dashboard light, with as few metrics as possible. This not only encourages keener focus on the things that really do drive success, but in the early stages, simplifies the creation and distribution of reports.

One way to achieve a light dashboard is to eliminate redundant metrics. The overlap of metrics makes dashboard review laborious and lessens the managerial value of the final toolset, relegating it to less frequent use.

In a similar way, overly diagnostic dashboards will cause senior executive eyes to glaze over and will undermine dashboard effectiveness. Diagnostic metrics need to be balanced by predictive metrics. Diagnostics take care of associations between marketing's function and corporate prominence in the market (think brand awareness), but predictive metrics more directly state the corporate goal and reflect what will happen (think sales increase). Predictive metrics support action more than do diagnostic metrics.

Most effective dashboards have between five and 20 metrics. Larger companies tend to be on the higher side, as do companies with multiple divisions, products, or operating units. The more complex your business, the more metrics you will have. Keep in mind, however, that more than 20 metrics makes it difficult to read the dashboard and drive at the same time. If you're asking your CEO to "pull over" to read 43 blinking lights, chances are your dashboard won't get read too frequently.

Think about levels of visibility and detail. CMOs and other C-level executives may only need to see a summary of critical metrics across the marketing function. Each successive level of marketing management may have a different "drill-down" view, controlled for its specific responsibility and detailed to facilitate its diagnostic and predictive needs. The dashboard for the vice president of brand advertising might be heavily slanted toward brand equity metrics and media efficiencies, while the dashboard for the director of interactive marketing focuses on Web log statistics.

Be as graphic as possible, avoiding elaborate tables. Take care to use graphics that convey the required facts simply and efficiently. There is no value in an over-designed chart that attempts to do too much. As a general rule, moving a two-axis chart to three axes increases the degree of difficulty by a factor of 10.

Keeping It Fresh
The frequency with which you refresh your dashboard should correspond to the needs of your business. If things change enough on a day-to-day basis to warrant a reassessment of resource allocation, then your dashboard better come out at least daily. However, for most companies (even those with real-time sales tracking), business patterns are unlikely to change more often than weekly; for some, it's monthly or quarterly.

Frequency also may be a function of visibility level. Higher levels of the dashboard may be updated less often than the more diagnostic lower levels used to make day-to-day decisions.

You may, however, want to take frequency off your mind by building a dashboard that accesses updated information conveniently upon request. This might take some additional work — to integrate your dashboard with data warehouses, campaign management tools, marketing enterprise systems, etc. — but putting the data online where users of all levels can get to it when they need to can dramatically increase usership and, in the long run, decrease expense of maintaining it.

Distributing Your Dashboard — Paper or Plastic?
We've seen some pretty effective dashboards distributed in the form of low-resolution color printouts. We've also seen some really disappointing ones presented in slick "real-time" online intranets or e-mail links. The medium you choose should match your requirements for speed and breadth of distribution. If you need to update your dashboard frequently or distribute many versions to many constituents, go electronic.

The No. 1 priority is to have it read and understood by the people making the decisions. Everything should support that simple goal.

One Final Word on the Wiring
Building an effective marketing dashboard is a lot of work. It is not a part-time responsibility for the most "get-it-done" person in the department. It is also not something you can delegate to your analytics group, as its perspective will limit dashboard usefulness to the most important audience — the executives.

But making the effort to do it right, facilitated with some unbiased external perspective, can be the most rewarding and effective undertaking you'll experience in your job, not to mention the esprit de corps you'll build within your team and the visibility you'll bring to all the great work you are doing.