By Mark Price, LiftPoint Consulting
Dashboards are probably the most requested business intelligence tool for marketers today. Everyone has a vision of beautiful color-coded charts and highlighted numbers, giving them real-time insight into the business. But reality is often far from that.
Confusing key performance indicators (KPIs), numbers that don’t match and charts that create rather than eliminate confusion are rampant. Marketers find themselves spending more time trying to sync the dashboard numbers to their old reports than they spend on the business itself. Finally, the dashboards “wear out their welcome” and are simply filed away regularly. The original purpose is lost.
Yet the benefits of dashboards can be meaningful if marketers can find a way to make them useful. The benefits of a well-designed and built dashboard system include:
- Reduced workload on the analyst team — many companies have staff dedicated to “crunching” numbers manually — wasting time and resources;
- “One view of the numbers” — a consistent set of data improves trend analysis and reduces meeting time where data accuracy is debated;
- More current information — insights can be built from data that is more up-to-date which improves the accuracy of recommendations; and
- Key actions are evident, reducing time and increasing the impact of marketing programs in response to data changes.
Why does the reality of dashboards stray so far from the ideal? What do marketers have to do to ensure that the dashboards they receive can actually drive business value?
The greatest difference between dashboards that drive value for marketers and those that fail is the investment of time in what to measure before the dashboards are built. Successful dashboards are identified by the following characteristics:
All metrics “ladder” to KPIs that drive company performance. The highest level indicators would be the KPIs that drive shareholder value or board performance evaluation. Ultimately, in most companies, that would be total revenue and margin growth compared to prior year. Those metrics, in turn, are driven by customers and spending, which is driven by customer acquisition, retention, average order value (AOV) and frequency. Those metrics are driven by a host of marketing performance indicators (MPIs), in addition to sales, product and service metrics.
The dashboards show only the most critical information, compellingly displayed. Dashboards are not spreadsheets. A manager can examine data in excruciating detail outside of the dashboard. Dashboards are meant to highlight critical changes in business performance and what are driving those changes. The assumption is that the person reading the dashboards either (1) drills down to the details for more insight or (2) has people who will do so.
Dashboard metric definitions and data sources are accepted and understood. Metric definitions cannot vary by division or analyst; the process must drive understanding and agreement among the key stakeholders who will be viewing the dashboards or will be impacted by them. In addition, the best dashboards include a page which outlines the definitions and sources for each metric, so that the dashboards can remain consistent over time, regardless of staff changes.
Steven Covey always said to “begin with the end in mind.” That approach applies all the more so to dashboards. Simply slapping pieces of spreadsheets into a dashboard tool is a recipe for disaster.
- Want fast access to key metrics so you can address weaknesses and capitalize on opportunities to grow revenue and profits; and
- Shared metrics across a broader array of stakeholders across the company, to get everyone working off the same page (often called “democratizing the data”).
Then you must act accordingly — invest upfront and you can transform your organization.
Mark Price is the Co-founder and Managing Partner of LiftPoint Consulting, a data-driven marketing consultancy. Previously, Price worked on the client side at General Mills and Ralston Purina.