Scorecards - Adopt a More Dynamic Approach

Is our scorecard serving business needs of the moment? Scorecards are widely debated within organizations and what I have found is that scorecards end up reflecting personalities rather than business imperatives. We argue and sell the concept of a consistent set of metrics and a standard format, so business can be monitored and decisions can be made. But, I have found that the theory of standard format and set metrics only says that “I don’t want to rake my brain on a frequent basis and make decisions dynamically.” There are a very few businesses that do not pose a new challenge every day – some days we are fixing what is broken, on the others, we may be finding ways to optimize the operations, yet another, we may be trying to find new ways to grow the business. So, why should the scorecard always look the same?

There are ways, a lot of managers pretend to get by that problem – add more metrics to the scorecard, make the font small to fit on one-page (often as a result of the former), etc. But, do they solve the tactical business challenges that are discussed in the review meetings every day/week/month? A better approach would be to identify what metrics are meant to be the health indicators of the business and what metrics need to be monitored for making tactical decisions by pointing out wins/challenges. To achieve this, we need scorecards that are not repetitive indicators of our performance, instead can dynamically capture the data points that help executives hone-in on the issue and make a call quickly during the review meetings.

I am not suggesting we dump the old formatted view of our metrics, but instead, we create one that speaks to our most current challenge (today, this week, etc.) – which retail department is moving ahead and which is hurting, which promotions worked for us, how do we help our dealers and vendors be more successful, what helps the consumer buying decision, how do we grow revenue to meet this months targets, etc. This slight change can help surface underlying issue, as for example; With stagnant sales – increasing the share of consumer’s wallet is tough in these times, but bringing more consumers in through the door is still a viable growth strategy. If we can dynamically demonstrate the value of our key projects through the right scorecard, it might be just that much easier to gain executive approval and show the results as they come in.

Tracking - make it customer centric!

Knowing what your customers want or need, I believe, is the type of intelligence that is best obtained from internal data, rather than market studies. While the latter are a good source of market intelligence and trends, a more focused “consumer centric tracking” will ensure that we are better prepared to serve our consumers’ needs. The possibilities could be endless, from right targeting of offers, to lower acquisition costs, to greater conversion and monetization. I spoke about the customer focus (http://www.analyticsheaven.com/2010/01/customer-is-always-right.html), and now we need to ensure that our tracking is helping us achieve some of the benefits identified in that approach.

Achieving this level of granularity may be tricky, given consumer privacy issues, but we can aggregate user data in the right buckets to define our unique segments, design a scorecard to monitor appropriate metrics and create a process to quickly supplement our offerings to changing user needs.

While I talked about measuring the value of web traffic by promotion source, here the theory is that we build an understanding of user segments. For instance, if we are a content site, we may want to learn about the browsing behavior of our sports readers, segmented into say, MLB/NBA/Olympics/Soccer fans, etc. Metrics such as, time spent on the site, navigation pattern to other site sections, number of pages per visit, frequency of visits per month, shopping tendencies, awareness towards brands, etc. Following these segments may yield better returns per marketing dollars spent than a wide targeting of content and offers through the generic sports page.

What this data does is that it helps define our user experience, site navigation and product offers that are truly unique to this user segment. And we need to respect the findings to an extent that if our sports readers tell us that they are not interested in shopping (hypothetically), then we make the experience richer by showing them more content and leaving out the “useless” product ads from their pages – talk of a no-frills attached user experience. How else does one define relevance and targeting?