The late Ed Koch, a recent New York City mayor, always asked, “How am I doing?” Marketers — as well as government leaders — need to know if their “customers” are happy.
Perhaps you head the marketing operations for your company and want to get a better handle on customer metrics. You heard about the idea of a marketing dashboard at a recent trade association meeting and think that may solve your problem. How should you proceed? What should be on your dashboard?
Progressing beyond a single item to monitor the effectiveness of business performance, leading organizations often use a set of key metrics called marketing dashboards to understand their key performance indicators.
Just as an automobile dashboard captures critical driving information such as speed, distance, fuel levels, vehicle and engine temperature, navigation and so on, a marketing dashboard summarizes pertinent information on branding, channels, customer contact, promotion, sales performance, service profitability, the Web and customer value.
Consider the benefits
Some specific benefits of using dashboards include the following: business intelligence, trend tracking, measuring efficiencies or inefficiencies, real-time updates, visuals (charts, graphs, maps and tables), customized reporting of performance and aligning goals and strategies with results. Major downside considerations include the cost, time and the talent needed to administer marketing dashboards.
The main value of the dashboard framework is that it consists of a multitude of practical information that is current, accessible and easy-to-understand. Dashboards can be designed for top C-level executives as well as the managers working in the trenches.
The accompanying figure illustrates an example of an executive marketing dashboard. This dashboard features the following metrics: sales levels and growth targets, the decision-makers, exceptions, key accounts (including revenues), the marketing pipeline (status of marketing activities throughout the buying cycle), and tracks leads and dollars generated over an annual period.
Decide what to measure
What should you measure? The spectrum of opinion varies widely from a single metric such as the Net Promoter Score to 50 or more performance indicators. Just as we don’t want to be overwhelmed with our automotive dashboard, keeping the marketing dashboard simple helps measure what matters and aligns with business objectives. That said, here’s a good starting point to consider in choosing five to 10 key performance indicators.
■ Financial measures: revenues, contribution margins, turnover ratios, profitability
■ Competitive measures: market share, advertising/promotional budget, image map
■ Consumer behavior: market penetration, customer loyalty, new customers
■ Consumer intermediate measures: brand recognition, customer satisfaction, purchase intention
■ Direct customer measures: distribution level, intermediary profits, service quality
■ Innovativeness measures: new products launched and the percentage of annual revenue from these new products
■ Customer value measures: process metrics, customer retention rates, customer lifetime value, RFM (recency, frequency, monetary value)
Realize that doing business today requires a new level of accountability for performance. Superior customer value means knowing customers’ behaviors and buying patterns.
Metrics are an important part of the strategic marketing process to understand: 1. How successful the organization is now. 2. What it needs to accomplish to become even more successful in the years ahead.
Smart marketing managers will embrace this challenge and use metrics as a planning tool to improve business strategies.
Art Weinstein, Ph.D., is chair and professor of marketing at Nova Southeastern University and author of “Superior Customer Value: Strategies for Winning and Retaining Customers.” He may be reached at firstname.lastname@example.org or (954) 262-5097. For more information, visit his website at www.artweinstein.com.
A pivotal challenge for companies is to differentiate themselves from competitors. While different isn’t always better, better is always different! A business model describes how an organization designs and delivers value by providing stakeholders a shared understanding of how the business operates. A strong business model offers a competitive advantage by demonstrating that the firm does something different, more innovative and better than its rivals.
Herbert Kelleher and Rollin King sketched out the Southwest Airlines business model on a breakfast napkin in 1967. Recognizing a need for a service-oriented low cost airline, the “Texas triangle” meant that Southwest would fly dozens of daily flights between Dallas, Houston and San Antonio. In 2000, David Neeleman, a former Southwest manager, launched JetBlue Airways by adding quality to the service/value mix.
In steps the digital era
The digital era has driven many recent business model transformations. Apple’s iTunes is a great example of the changing music industry. In the past, record companies, distributors and retailers controlled channels and profits; now the artist and platform (iTunes) has the market power.
Newspapers have struggled to become information providers as their readers aged and defected to other media. The Wall Street Journal, The New York Times, and USA Today have stellar reputations and large/loyal customer bases. They can charge fees for online content. In contrast, most metropolitan newspapers are a less viable option as free alternatives (websites, smart- phones, community magazines and television) abound.
Google, Facebook, Apple, and Salesforce.com are examples of shapers since they open platforms for third-parties and create new market space. Participants embrace and enhance shapers’ platforms and may include applications (apps) developers, service firms or online e-tailers.
Zynga, a Silicon Valley social-gaming company, has generated hundreds of millions of dollars in revenues through Farmville. Millions of users manage virtual plots of land, grow crops, raise animals, and use online tools such as tractors. It has been estimated that there are more than 20 times more people playing Farmville than there are actual farms in the U.S. Other examples of strong business models are listed in the table below.
Take apart your business model
Consider these questions as your management team assesses your business model. Can you clearly explain your business model? What is unique about your strategy? How does it compare with your direct and indirect competitors?
Have you broken any industry rules lately? Can you develop a more innovative and interesting business model? Will your business model win in the market? Does your organization truly deliver superior value for customers?
ArtWeinstein, Ph.D., is professor and chair of marketing at Nova Southeastern University and author of “Superior Customer Value — Strategies for Winning and Retaining Customers.” He may be reached at email@example.com or (954) 262-5097. Visit his website www.artweinstein.com.
American society is intrigued by image. Consider this related word: imagine. Disney is all about the customer experience, emotionally and magically transporting guests to another time or place. Speaking of place — some of the best image marketing campaigns have been tied to geographic areas. Remember “I Love New York,” “What Happens in Vegas Stays in Vegas” and “Virginia is for Lovers”?
Image is often associated with entertainment, fashion and technology markets, but all companies have a singular corporate personality that differentiates them from their rivals. Corporate image is the reputation of an organization viewed by its various stakeholders — investors, employees, customers, business partners, communities and other entities. The communication challenge? To manage and enhance your firm’s identity over time.
Components of an image
A perceived image is based on two components:
1. What the company does and says
2. What the customers/market say about the organization (Hint: This is more important.)
Companies must manage a strong integrated marketing communications program consisting of advertising, selling, sales promotion, online, social media and public relations activities. This includes customer-generated content such as Facebook posts, tweets, blogs and online communities, which can dramatically impact organizational performance.
Case in point: the YouTube viral video “United Breaks Guitars” about airline baggage mishandling has been viewed more than 12 million times to date.
Even if your company is not a global giant, image research still provides a practical guide for promotional strategy.
Let’s assume that you recently opened a trendy sports bar and café. You can assess your corporate image in the local community via a simple two-dimensional plot of customer perception. Examine familiarity and favorability scales for your firm and your direct competitors — other casual dining establishments — within your primary trade area. Next, collect data about indirect competitors such as casinos, clubs, hotels and sports sites.
A competitive edge counts
Differentiation means having a competitive edge. This advantage can be real, as in higher quality product, faster service or best price, or perceived. Take Air Around the Clock, a South Florida air conditioning and appliance service contractor. The company is differentiated based on quality of service that includes night and weekend emergency repairs, a preferred customer program, a fleet of more than 90 trucks and a “fix it right the first time” philosophy.
Then you have Amazon, Apple, Ben & Jerry’s, Best Buy, Google, Harley-Davidson, IKEA, Whole Foods and Zappos, which are often cited as “cool” companies. Many consumers aspire to have the latest and greatest and want to purchase cool products. But brand coolness is a multidimensional construct consisting of uniqueness, excitement, innovation, authenticity and self-concept reinforcement.
Coolness is also impacted by age, group influence, lifestyle, media and technology. So business leaders need to realize that coolness or “being hip” is an elusive attribute that is based around overall image but also requires that the other value proposition ingredients — service, quality and price — are satisfactory to superior.
Questions to ask
Consider these queries as you revisit your 2013 marketing communications strategy.
? How important is image in your value proposition?
? Should it be even more important?
? Does your image clearly resonate with your target market?
? How can you get your customers and the market to share more positive messages about your company?
? What is your main point of differentiation from your competitors?
? Should coolness be a major or minor part of your IMC strategy?
? How can you best tell your business story to communicate value? ?
Art Weinstein, Ph.D., is chair and professor of marketing at Nova Southeastern University and author of “Superior Customer Value — Strategies for Winning and Retaining Customers.” Visit his website at www.artweinstein.com, or reach him at firstname.lastname@example.org or (954) 262-5097.