Marketing dashboards: huge boost to profitability, or money drain?
Marketing dashboards are in use in many companies and have been reported by several authors to be able to accomplish one or more of the following:
1. Aligns marketing objectives to a company’s financial objectives
2. Creates organizational alignment within Marketing
3. Establishes a direct link between spending and profits
4. Creates an organization that makes decisions based on hard facts
5. Creates transparency
However, it will not do these by itself!
Input from the marketing team needs to be included at the very beginning, and once the results are found and incorporated with current knowledge and data, the team must act upon the information they contain.
Just like other tools that have come before it, the dashboard can be a seductive solution that is unlikely to work out if it is not fully understood, or used effectively. Too often the frustration is that there is no correlation between having a marketing dashboard and improved marketing results.
A marketing dashboard is a system (usually online) that provides access to important data elements and offers a visualization of marketing-performance data. This is to provide marketers with a faster and more frequent appraisal of marketing impact and what needs to be changed.
A marketing dashboard is a little like a formula one team dashboard that analyses performance as the race is taking place. It shows how to improve performance so you can tweak what you are doing in order to win the race. It alone does not win the race but it provides vital information that assists the team to change their activities and actions in order to do so.
“Just like other tools that have come before it, the dashboard can be a seductive solution that is unlikely to work out if it is not fully understood, or used effectively.”
It brings to mind a useful analogy – pharmaceutical companies and CRM implementation. They promised so much but too few companies found strong results and this was not the fault of the CRM software and data which were powerful, but more due to a lack of understanding and appropriate use of them within the companies concerned.
Although dashboards can be a very useful tool, marketing dashboards, like CRM tools, have on occasion become a hoped-for universal remedy for many who want to manage their marketing activities more effectively. However, if marketers get lazy and decide thinking is not required when designing and utilizing a marketing dashboard, they are gravely mistaken. One cannot afford to be lazy with a dashboard, and not think carefully about the data contained therein and how to use it. They are not a universal remedy. They provide very valuable data but they do require marketers to understand and think about the data they contain, ponder how this fits into what they know, see how this can impact how they act, and then actually take the information and act!
Although the process of implementing and using a dashboard can result in the five benefits mentioned previously, it is inexcusably naive to take for granted that those benefits will automatically happen. Alas, marketers still need to think and use their brain.
So, what makes a good marketing dashboard?
It is just a tool, albeit a powerful tool, and like any tool, it can be misused or poorly understood. And even the right tool in the wrong hands can be ineffective, or at worst, dangerous. I know of one piece of software that we use internally at Eularis. I know it is extremely powerful, but I don’t use it as I have never fully mastered it and seem to never have the time to do so. I would consider the ROI of us buying it poor but it is not the software itself causing this, but my lack of understanding of how to use the software, and indeed the actual lack of use of the software that is causing the problem. If I actually take the time to study it and how to use it, I know I will be able to reap the benefits as others have.
A dashboard is a tool to help you manage your marketing process and assist in the decision making process. When used correctly it should assist in facilitating faster and better decisions that results in sales and profit growth.
Who should use a marketing dashboard?
The purpose of the dashboard is to improve marketing process performance and is essentially a decision support system. The dashboard can assist marketers in deciding what actions to take and when. Marketers who are concerned about the performance of their existing marketing may want to consider using a marketing dashboard.
“However, if marketers get lazy and decide thinking is not required when designing and utilizing a marketing dashboard, they are gravely mistaken.”
A well constructed dashboard can help you measure, monitor, manage, and improve your marketing and sales processes.
So, how do you ensure a good marketing dashboard?
Like all marketing, you need to start with the objectives. Firstly you would need to know what corporate objectives the marketing department has to support and what outcomes marketing will need to create to support those objectives.
In addition to that you will need to ensure that the right attributes have been chosen for monitoring, and that they can be monitored, in order to identify whether the chosen strategy and tactics are working. Remember that not everything that counts can be counted, and not everything that can be counted counts!
“And even the right tool in the wrong hands can be ineffective, or at worst, dangerous.”
There are several steps to ensuring an effective dashboard, including:
1. Connecting marketing activities to business outcomes
2. Deciding what to monitor on the dashboard
3. Identifying the data sources needed to get the data you are using for your monitoring
4. Developing an initial dashboard to pilot
5. Making sure all relevant teams understand what the data in the dashboard is saying and what it means in terms of to the extent to which you are meeting your initial objectives
6. Ensuring that you act on the information and change your marketing tactics / strategy in line with what the data shows
7. Measuring the impact on the initial goal on an ongoing basis
They sound easy enough, but they are fraught with difficulty since often the objective is creating a dashboard rather than a business objective that the dashboard should be assisting with – which should not be the case – but sadly often is.
The CRM tools that I alluded to previously are a prime example of this also because although the tool was supposed to drive understanding and improve the process of customer relationship management, in many instances the goal was simply to deploy the tool and hence we have many instances of large scale deployments that failed to do anything but create a time and money drain – not because the tools were lacking but the tools were not utilized properly.
The bottom line is if want a useful marketing dashboard, doing the hard work of steps above is critical, and until you get those right, the potential benefits of the dashboard will not be fully realised.
How Do You Pick a Dashboard Tool?
There are many dashboards in existence, starting with the inexpensive but most widely used Excel, and going to the very expensive. If the tool offered is Excel-based, then the dashboard recommended will be of limited capability. On the other hand, if the tool is multilayered, multi-analytical, and fully functional, then the dashboard recommended is likely to use most of those features, but it may be beyond the understanding of many of the marketers without appropriate training and support to back it up.
“When used correctly it should assist in facilitating faster and better decisions that results in sales and profit growth.”
Deploying a dashboard requires the work described above and a tool that appropriately supports the resulting requirements. You need to be able to successfully highlight your current and achievable market share based on your existing marketing programmes, and identify the extent to which each activity, message and channel is driving share. The result should be to highlight how effective your current marketing mix is, and what the optimum mix of activities would be to drive maximum share whilst comparing to your competitor’s performance so you can see at a glance how effective your messaging, positioning and differentiation truly is.
Dashboards can be exceptionally powerful tools to help marketers manage and improve their business processes and results. However, as with any tool, you must learn to use it well and action must be taken with the results found.
About the author:
For a confidential discussion on any of the topics raised in this article, please contact Dr Andree Bates or Eularis www.eularis.com.
Can marketing dashboards boost profitability?