The idea of a corporate dashboard is not new, but has
recently been gaining increasing popularity.
In our fast-paced, lean-to-the-bone corporate governance mode, we have
little time or patience to sift through voluminous reports. Even spreadsheets seem to be too cumbersome
these days. Now that the CEO has the
corporate dashboard, it is only natural that the people reporting to the CEO
need their own dashboards, to quickly get a view of the important metrics in
their areas of responsibilities before they show up on the CEO’s dashboard...
Which brings us to the question of what should the dashboard
show. Here are some of the things I
would like to see on my dashboard as a marketing executive in an enterprise
software company.
The Strategic Marketing Dashboard
At the highest level of my strategic performance
measurement, I would like to see whether my company is heading towards market
domination.
The basic premise of the technology adoption model is that
buyers tend to converge towards standards, which in turn enable the creation of
market Gorillas and Kings. Microsoft
Windows, Office, and Internet Explorer are prime examples for such
standards. SAP is an example more typical
to the higher-end of the enterprise software market, where the Kings are dominant,
but to a lesser degree.
When you reach this dominating position, you get to enjoy
all sorts of unfair advantages. Once
your solution is considered a de-facto standard, it becomes easier to sell to
the more conservative buyers, which tend to make the majority of all
markets. You enjoy increasing returns
on scale across all functions, from marketing and sales to support, and of
course on your R&D. While you may
not be a Gorilla or a King yet, you are on your way to becoming a very healthy
Chimpanzee.
How do you measure whether you are heading in the right
direction towards this promising position?
There are three numbers you need to keep track of:
1. New
customer wins
2. New
customers won by the competition
3. Number
of customers lost (i.e., no longer use your solution)
What should you look for?
a. Number
of your new customer wins + number of customers won by the competition should
grow quarter to quarter.
This measurement gives an indication of changes to
the size of the market. Dominating a shrinking market
is a sure recipe to oblivion, so the first thing you want to make sure is that
you are in a growth market. A shrinking
market could be a sign of economic slowdown, but it could also be a result of
failure to correctly define the market and the competition (we all know the
story of the railroads). If neither you
nor the competition is winning more deals, this should be a big red flag: you
could be losing the market to a new category of solutions that may signal a
paradigm shift.
b. Ratio
of new customer wins divided by the number of customers won by the competition
should grow quarter to quarter.
This is a measurement that you are
gaining market share and that your growing market presence is helping you close
more deals faster than the rest of the market.
c. Number
of new customer wins should grow quarter to quarter.
If the above two metrics grow
quarter to quarter, this one will grow as well (it’s just the math). I have included this metric since it is
easier to measure and can serve as a good reality check to the above two.
d. Ratio
of customer wins/customers lost should grow or stay steady quarter to quarter.
This is another reality-check metric to ensure that
what comes one way does go out the other... Obviously, this
number should be (much) greater than one.
The Strategic Dashboard
The Tactical Marketing Dashboard
The tactical dashboard should reflect how well the
marketing organization performs on the interim steps required to achieve your
strategic goal of market domination.
Going back to the premise that prior relationships,
established trust, and ongoing dialogue will increase the likelihood of selling
into the account, the following metrics are the ones I want to see on my
dashboard:
a. How
many companies and contacts within the target market have you been in touch
with in the past 3/6/12 months?
“In touch”
means more than just sending them a letter or calling and leaving a voice mail
message. You only know that you really
“touched” someone when you get a response – registration to an event, download
of a white paper, real phone conversation, anything that acknowledges that the
person on the other end is engaged in a dialogue and not just a passive
listener. Any company in your target
market you are not engaged in an active dialogue with is an opportunity for
your competitor to grab.
b. How
many companies and contacts within the target market have you identified by
name?
For those that you have not been able to actually
touch yet,
identifying
the companies and contacts by name (and title) is a first step to
establishing a dialogue.
c. Number
of overall touches with target market contacts.
It takes more than one touch to establish a
dialogue. In many cases up to a dozen
touches may be required before a sales cycle kicks in. The number and frequency of responses from
target market prospects is an indication of trust and strength of the
relationships.
Additional tactical measurements should include cost
metrics, such as cost per touch, cost per touched company, cost per newly
touched company, and
several
others we can suggest.
Some final notes:
- What do we mean when we say target market?
If the goal is market domination,
the target market should be defined as one where it can be accomplished. It has to be a market where references are
applicable, so getting future customers becomes easier over time. And it has to be of a size where your
presence can make an impact so you can become the de-facto standard. This all points back to the tried but true
formula: focus, focus, focus.
As your company grows, you may define
multiple target market segments. To get
a real picture of your performance, track each of these segments separately in
your dashboard, and take action when any of these segments does not perform as
expected.
- Trends are more important than snapshots
Back in the mid-nineties, Astea was
the clear market leader in the enterprise field service software
marketplace. Since then, the company
has lost many customers to the competition, had more losses than profits, and
shed over 97% of its market value; but it may still have one of the largest
installed bases in the market.
The moral of the story is that
looking at market share in terms of installed base is a dangerous thing. The purpose of the dashboard is to help you
navigate your company into a better place, which you can only do by tracking
the trends. Had Astea done it in the
mid-nineties (and maybe it did), it would have seen Clarify (now Amdocs),
Scopus (now Siebel), and Vantive (now PeopleSoft) creeping into its
market. The rest is history.
Do you have a marketing dashboard? What does it look like?
Whether you have one or not, I am curious to know
what you
would like to see on your dashboard.
