How’s your marketing effectiveness lately? Are you getting the kind of results you’re after?
If not, it might be time to take a step back and evaluate what you’re doing.
One way to do that is with a marketing scorecard.
In this blog post, we’ll discuss what a marketing scorecard is, and how you can use it to improve your marketing efforts.
The Problem to be Solved
The problem to be solved is a short and simple one, yet it is often misunderstood.
In the simplest form, marketing exists to fuel business growth.
Most marketing initiatives are implemented with the hope that a business will see growth in revenue, sales, or profit.
In other departments such as finance, a business may be working on increasing profitability differently – by slashing expenses.
Some people think that decreasing expenses is the only way to increase profits, but it’s not always effective.
Oftentimes, to increase profit, slashing expenses can become nothing more than a race to the bottom.
A third undiscovered method, increasing the efficiency of a business, is what we’d like to discuss today.
It is powerful, and as a result, the outcome should be an overall increase in growth.
But what is the best way to track efficiency with the end goal of increasing it?
The answer is KPIs.
The Solution: Develop KPIs
“Key Performance Indicators”, or KPIs for short, are a great way to measure success and make sure you’re on track.
At their most basic level, KPIs are nothing more than numbers that help you measure how well your business (and marketing) is doing.
Why KPIs Are So Important
Take the example of two companies, both selling t-shirts on Shopify.
The first has had explosive growth, with their revenue growing by 20% every month since starting their business; they’re doing something right and it’s paying off in a big way.
The second has had significantly less success – their revenue hasn’t increased at all, and is trending downwards.
Are these two businesses doing the same thing? Probably not.
The first business has KPIs that align with their overall vision for the business – as a result, they’re probably sending marketing emails to customers who have purchased from them before, or advertising on social media targeting those users.
They’ve clearly identified their target market and are focusing all of their efforts on those specific people to drive sales.
The second business is probably doing none of these things, which means they’re only getting sales from cold traffic.
So why are their KPIs so bad?
They haven’t defined who their primary target market is, and as a result, don’t have KPIs in place to measure performance against that audience.
As a result, the business doesn’t have a good understanding of its customers, which means the business isn’t performing as well as it could be.
But you’re probably thinking “That’s easy to fix – just change what your KPI is.”
And you’d be right. It would be that simple.
If the first business above changed their KPI from total revenue to revenue from buyers who purchased 2 or more items, they’d see their growth slow down significantly.
Why?
Because they’re not focusing on the right KPI for their business.
And this is where many businesses struggle – they don’t understand what KPIs are, let alone how to use them properly.
They might be tracking all kinds of different numbers which either aren’t important or simply don’t matter, or they’re trying to optimize for the wrong things.
If you don’t know what the right KPIs are or how to use them, you won’t be able to effectively measure your business’s success and growth.
So What Are Good KPIs?
It depends on what stage your business is at and what you want it to achieve.
For example, if your only goal is to get as many leads as possible for a SaaS business, then your KPI would be something like email signups.
If you’re a dive shop and want to keep track of the number of scuba-related jobs that your employees are completing each month, then your KPI might be dives completed.
The point is this: know what you want from your business:
- do you just want to get more customers?
- or… are you trying to sell a specific product or service to them?
Once you know what you want, make sure your KPIs reflect that.
Ask a CMO: Choosing the right Key Performance Indicators from yorCMO on Vimeo.
Implement a Marketing Scorecard
Once you’ve developed the KPIs that are relevant to your business, the next step is to track those using a marketing scorecard.
What is a Marketing Scorecard?
A marketing scorecard is simply a document that you use to track the success of your business’s marketing efforts.
The goal of a marketing scorecard is to measure how well each campaign or tactic is performing against your KPIs so that you can quickly identify which campaigns are delivering the best results.
It’s also a great way to communicate with your team about what marketing campaigns are working and what aren’t.
By tracking KPIs, you can identify areas where your marketing needs improvement, and make the necessary changes to boost your results.
But KPIs aren’t just simple metrics; they can make or break your business’s growth – which means it’s critical to pick the right ones. And picking the wrong KPI could be killing your business.
Key Takeway = track what matters and avoid vanity metrics.
Scorecard vs Dashboards
Marketing scorecards and dashboards are very similar – they both measure how a business or marketing campaign is performing.
While a marketing scorecard is a document that you reference when planning your company’s marketing, a marketing dashboard is a more real-time version of this.
It displays KPIs from different channels or campaigns so that you can monitor how different parts of your business are performing at the same time.
In other words: marketing scorecards are measured in weeks and months while dashboards are measured in days and hours.
What is Included in a Marketing Scorecard?
Your marketing scorecard will need to include high-level details about the company, its marketing channels, KPIs, how it plans to achieve them.
A marketing scorecard should not really be that complicated. Overall, the scorecard is composed of three things:
- KPIs
- Goals and/or targets for each KPI
- Performance of each KPI
The most effective marketing scorecards also include not only the basic details of what to achieve but also accountability on who owns that task to get to those goals.
At yorCMO, we track accountability using something called “Rocks” – a method that is highly effective in driving change.
What are Rocks?
When you’re working with EOS methodology, rocks are another name for quarterly goals.
They are mentioned in Gino Wickman’s “Traction” – a strategic blueprint to growing small businesses and taking them from one stage of success into another.
Rocks help organizations solve one key problem: when everything is important, nothing is important. Organizations won’t execute well when they don’t prioritize well.
The process of setting Rocks enables an organization and its people to align around the three to seven most important priorities that must get done every 90 days.
In doing so, the organization unlocks efficiency that they otherwise wouldn’t be able to channel had they been focusing on so many other tasks and initiatives.
How do Rocks Work?
Rocks are set quarterly to help an organization achieve marketing goals.
But unlike many tasks, it is the accountability and tracking that makes this concept so powerful.
Rocks are directly assigned to somebody on a team, then tracked every 90 days using a scorecard.
This allows full transparency on whether or not that rock has been completed, or if not, is “on track” or “off track”.
This type of accountability ensures the task doesn’t get swept under the rug and the cadence of checking in every 90 days helps align priorities and resources that are outside of that specific task.
If you’re interested in setting rocks for your marketing scorecard, check out our recent post about how to set quarterly rocks written by Jamie Coffey, fractional CMO at yorCMO.
Wrapping Up
It’s no secret that a marketing scorecard is an effective way to measure and improve the efficiency of your digital marketing efforts.
The right KPIs will help you determine which channels provide the highest ROI for your business so that you can focus more time on these areas while lessening investment in others.
What you might not know, however, is how to create one or what KPIs are best for measuring success in this area.
If you need guidance creating a smart strategy with measurable goals, check out a recent podcast from Sharon Means, Fractional Integrator/COO at the Entrepreneurial Advisory Institute: A rock and a plan – Fractional C-Suite Retreat Podcast