Dashboards Drive Better Decisions
October 1, 2005
BY MICHAEL KRAUSS
is the month of the World Series. My mind is on baseball. It’s
a simple game really. You win or lose by scoring more runs than
the other side. It’s not unlike marketing.
Of course baseball is a game of complicated metrics: batting averages,
on-base percentages, earned run averages, runs batted in, pitch
counts. There are all kinds of metrics that guide the game. They
help managers make better decisions. Some managers rely on gut
intuition, but the best managers these days base their decision-making
on a set of metrics or statistics.
That was the point of Michael Lewis’ book Moneyball, The
Art of Winning an Unfair Game. In it, Lewis chronicled how Oakland
A’s general manager, Billy Beane, relied on the right metrics
to create success with limited resources.
When I broke into the big leagues of marketing, marketers were
like old-fashioned baseball managers. They relied on gut intuition.
My mentors in packaged goods used to sound like old-time baseball
managers. They’d say, “Kid, I feel this TV commercial
will be a home run.” “Krauss, I can smell this new
product will be a winner. I can taste it.”
Today, the marketers who are the heroes are the ones who deliver
the numbers. Increasingly, the tool they rely on to succeed is
the marketing scorecard or dashboard. And the person who’s
pointing the way to popularizing the marketing dashboard is Michael
Gerard, research director at Framingham, Mass.-based International
The days of spending millions on marketing without knowing the
value of the investment are drawing to a close. CEOs are no longer
satisfied thinking half their marketing investment is wasted.
They want all their marketing dollars delivering value. They want
proof of performance. The marketing executives who build programs
that deliver on the metrics will be tomorrow’s CEOs. Those
that don’t will be out looking for a new job.
“It all ties into marketing performance measurement,”
says Gerard, who is one of the leading advisers on the application
of marketing dashboards. “During the Internet bubble there
was significant investment in marketing but not a lot of accountability.
Now marketing is being held accountable more than ever.”
To succeed in today’s performance-driven environment, marketing
executives need a dashboard--a tool that tracks the key indicators
of performance. According to Gerard, the best dashboards work
on two levels. They report operations metrics that are internally
focused and they reflect execution metrics that mirror marketplace
Operations metrics can include a host of ratios. There’s
a marketing budget ratio, which tracks marketing investment as
a percent of total revenue. There’s a program-to-people
ratio that determines the percent of a marketing dollar spent
on programs vs. staff. There’s the awareness-to-demand ratio
that evaluates the percent of marketing investment focused on
awareness building vs. demand generation. There’s also a
centralization ratio that reports the percentage of marketing
investment managed centrally vs. regionally in the business.
“The whole idea of these key performance indicators is to
help marketing executives manage their resources,” Gerard
The other side of the coin is execution metrics. These measures
determine how effectively the marketing strategy is being executed.
Here the measures include efficiency and effectiveness around
implementation. Is awareness building? Are we developing preference?
Is the company gaining consideration? Are leads being generated,
opportunities identified and qualified? Are deals being closed?
Is it being done quickly?
According to Gerard, many organizations, especially tech companies,
are looking at marketing dashboards. Gerard and IDC conduct an
annual quantitative research study of the 100 top technology companies
examining best marketing practices.
“A key part of putting a measurement performance system
in place is to have a new role called marketing operations,”
Gerard says. “We see about half to three-quarters of the
companies have this role.”
If you’re thinking about playing the game better, my advice
is to get a marketing dashboard. If you do, Gerard has five recommendations:
- Focus on
business needs first, not the enabling technology. Expensive
software isn’t the key. You can do a lot with an Excel
- Make sure
a CMO or top marketing executive exists who can act on the results
of the dashboard.
a culture of measurement and accountability. You may need to
change the culture of your marketing unit.
a marketing operations executive who can drive dashboard development.
- Know what
you have to measure; be user-focused. Develop the dashboard
with senior management in mind.
Gerard reminded me that not all my early marketing mentors relied
on gut instinct. Scott Wallace, then the young division president
at Chicago-based Swift & Co.--where I worked on new products--would
demand his product managers have ready access to key metrics.
Wallace would see you in the hall and demand numbers. You had
to be ready at all times.
dashboard was a 5-inch x 7-inch cheat sheet. I’d keep it
neatly folded in my top shirt pocket. Not knowing when Wallace
might question me, I would carefully type out monthly shipment
data, results from awareness tracking research and other key statistics
using an IBM typewriter. This was long before the PC, and I’d
spend hours collecting data and preparing my dashboard.
One day in
the men’s room, Wallace saw me and said, “How are
facts were in my top pocket, I decided decorum took precedence.
I winged it and said, “Sales are strong, Scott.”
Compared to the old days, Wallace would be impressed with today’s
Krauss is a partner with Marion Consulting Partners based in Highland
Park, Ill., and can be reached at Michael.Krauss@Marionpartners.com