Proved strategy for long term success: Evaluate your marketing with BSC.
Aktualisiert: 25. Aug 2020
If do you want to get a long term sustainable growth, you have to start keeping score of your marketing today.
My favourite tool to score and optimize marketing is the use of a balance score card (BSC). It prevents you to get a narrow-minded marketing view and you helps you to start to interact with all the other departments in the company. My experience: For long term success the BSC is best tool to find a marketing strategy and start with continuos optimizing.
The Balanced Scorecard was introduced in the early 1990s by Robert Kaplan and David Norton and has become one of the most popular and effective tools for corporate management. Over the last 20 years, we have used the Balanced Scorecard as a tool for company evaluation and have established it primarily as a we established it as a steering instrument/management tool. During the turn of the century, we worked closely with financial investors to evaluate companies. Me and my consulting firm GentCom were part of a team of specialized consultants. Our main task in this team was to evaluate the customer perspective. Marketing should bring new customers, but better customers that increase margin and deliver data to improve the products.
Be always prepared for the future
Short-term strategies to disguise a company will be easy to spot. Starting a business with a focus on the interaction between marketing and internal processes is successful, but in the long run any growth needs financing, scoring and must be secured by new products that meet the needs of the customers.
The main task in implementing the Balanced Scorecard is to find the Key Performance Indicators (KPIs). In order to use the BSC as a strategic management system, financial and non-financial measures at all levels - which means the involvement from the highest levels of the company to the tactical and operational levels – including the marketing. To measure the value that demonstrates how effectively marketing is achieving key business objectives, you need measure your marketing efforts and you will need data from the other departments in your enterprise, for example:
- payment discipline
Internal business processes
- customer satisfaction
- delivery status
- product overhang
- return deliveries
- new developments
- status of developments
- product exchange/upgrades
If an organisation is not prepared to provide the information, we often formed a taskforce – a team of partners/consultants with are focused in process engineering or financial consulting. The first task ist to convince the executive board to implement the strategy throughout the organisation, which is the most difficult task for these reasons:
- No knowledge concerning the benefits of the efforts.
- They are be very happy with the status quo and entrenched in the existing way of working.
- Too many other issues to deal with.
- Other priorities which you don´t know.
- Additional work to convince their colleagues.
- Internal political barriers.
- Change may jeopardize their existing position due to evaluation of their work.
- Fear of greater ramifications.
So be aware that there will be some tasks that have nothing to do with the strategy. But the efforts will pay off: without a marketing scorecard, there is a good chance that there is no idea where your marketing budget is best spent.
Second: Define your primary marketing goals, for example:
- Increasing Brand Awareness: Reach people with your marketing.
- Lead Generation: Convert contacts into qualified leads.
- Sales: Transform leads into customers.
- Customer Loyalty: Care for your customers, increase their loyalty.
- Cross Selling: Provide useful additional products or services that add more value.
- Recruiting: Win qualified and active employees.
Third: Identify your top marketing Key Performance Indicators (KPIs)
KPIs, or key performance indicators, are the measures of the performance of your Marketing efforts. With these KPIs you are able to analyse your groundwork, channels, expectations, and potential:
The more leads you receive, the more sales opportunities you have, and the more sales opportunities you have, the better your chances of growing sales. If you have a lot of leads, make sure you can check the way they are being implemented.
Trace them back to your marketing activities:
- Email marketing
- whatever you use, track it!
That give you a clear picture of where exactly that growth in revenue is coming from.
2) Lifetime Value of a Customer (LTV)
If you don´t sell products/services which are one time purchases a part of your marketing tasks is to sell something again. Take the gross margin per years.
3) Sales Growth
It take some efforts to weed out the marketing that does drive sales.
4) Cost of Customer Acquisition/Cost per sale
Take your spendings on sales and marketing in a month and count the new customers which can be traced back to these efforts.
5) Service/After Sales Cost per Client
Some good deals appears in another light if you know the cost after the sales.
6) Sales per Channel
Helps you to optimize your marketing mix.
7) Time to Conversion
Time to conversion is how long it takes visitors to convert to a client and is a great KPI to forecast your sales.
8) Cart/Quotation Abandonment Rate
It’s an important job to find out why a client don´t accept your quotation or exit your ecommerce system.
9) Website traffic
Traffic is the most important measure of your website’s success. Without traffic, nothing else is possible!
10) Website New Visitors
Qualifying your website is quite simple, more important are the leads or the conversion rate. especially if you run an online shop, it´s simple again. Divide into Landing Page Conversions and Blog posts visits, if do you use these tools.
11) Website Visitor Loyalty/Website Pages per Session
Shows you the interest in your services/products.
12) Social Media Engagement
Social media reach is quite simple to achieve, but engagement and response gives you better measures.
Check Social Media Share Rate, Follower Growth Rate, Comment Rate, Exit Survey Completion Rate.
13) Newsletter Sign Up Conversion Rate/Email Open Rate
Shows you the interest in your services/products.
14) Purchase History Documentation
To optimize the sales process it is necessary to log the sales history - offline with sales reports, online for example with Google analytics.