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Metrics Built for Speed

  |  April 9, 2003   |  Comments

New metrics and data provide new competitive advantages: speed and real-time marketing.

Numbers are at once clear and opaque. Businesses and other formal organizations pursue their purposes by the numbers. These tidy nuggets distill messy concatenations of people and processes.

Business' most familiar numbers measure and place value on performance: wages, stock prices, and so on. Numbers in the form of monetary units are literally the currency of economic activity and the fulcrum of its incentives. We know numbers can do more than measure; they can empower, liberate, even transform business practice.

The U.S. manufacturing sector was badly beaten up by the Japanese in the '70s and '80s. Global competitiveness was restored by adopting and pioneering an array of numbers-enabled quality initiatives, from Six Sigma improvement on the factory floor to the Department of Commerce's metric-intensive, gap-closing, customer-centric Baldrige Award. Development of numbers-governed processes to create quality saved U.S. manufacturing.

Today's numbers-enabled leap forward lies along the dimension of time. Among the famous precedents is a practice learned from the Japanese in the 1970s: just-in-time (JIT) inventory management. Using JIT, manufacturers no longer stockpile raw materials at the factory but have supplies delivered just (and only just) when needed. This time manipulation saves space and defers cost. It's enabled largely by information systems linking factories and suppliers.

Businesses are wiring an increasingly diverse array of real-time and near-real-time information loops to enable not only linear speed but also faster cycle times in such forms as tight coupling, virtuous circles, and feedback-driven optimization. It's certainly leading practice in today's direct marketing (DM).

DM has always delivered measurable results. Databases, introduced for greater targeting precision, now generate rapid, data-rich response. The primary goal is to optimize the dollar-denominated return on marketing costs. This is based on continuous improvement, which in turn is based on continuous learning. This return on investment (ROI) focused use of customer-driven information loops aims to generate more leads, qualified leads, more and larger sales from high value customers who will likely buy again.

A secondary pursuit from this welter of information flows, especially for those seeking novel advantages, is generating time-based practices that will put (and keep) marketers on their toes:

  • Speed, considered in a linear fashion as action over duration, universally and always determines the number of selling days. Competitive uses include preemption, surprise, and opportunism.

  • Timeliness is important everywhere for all periodic conditions in consumer, category, marketplace, and business cycles.

  • Tempo has long been a mandatory dimension in any purchase, with a prolonged consideration path. What's new is a technology-enabled orchestration of multiple channels communicating over time, in sequential contact streams.

  • Decision cycles are the information process of orienting, observing, and deciding prior to acting on a decision. The time marketers must find, interpret, and determine what to do with a target audience or how to respond to a rival's initiative.

  • Operating cycles, or agility, are the time it takes to turn decisions into actions. For marketers, to produce and deploy some communications initiative.

Pacing by numbers will be widely adopted. Its practical value also has an emotional appeal. It resolves and sustains a tension: simultaneous peace of mind and excitement. That's the safety managers traditionally seek by anchoring their decisions in quantitative measures on the one hand combined with the thrill of speed on the other.

External conditions call for it. Certainly, businesses should make things exhaustively right for a rigid universe but get things only roughly right for a fluid one. What's more, fortune will favor the fast among those catering to today's increasingly inattentive, elusive, demanding, and fickle consumers. Finally and most dramatically, being quick is a way to deal with unpredictability and confusion. If you can't see the road ahead, being able to turn on a dime helps.

The challenge and opportunity are to embrace this temporal dimension and make it real. It's not a question many marketers or agencies have tackled. If they want to embrace this, they'd better make themselves explicit. Process engineers, IT managers, and Internet practitioners who can help enable speed cannot read minds.

Marshall McLuhan warned, "The established order tries to force the new media to do the work of the old." Every entrepreneur knows opportunities come from finding and exploiting what's different and distinctive in a new situation. As a ubiquitous, two-way, real-time medium, the Internet has a particularly big role in modern business' pursuit of time-based practices.

Ladies and gentlemen, start your engines.

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ABOUT THE AUTHOR

Len Ellis Until recently, Len Ellis was executive vice president at Wunderman, where he charted the course in data-based and technology-enabled marketing communications, including the firm's strategic alliances and worldwide interactive strategy. Earlier, he was managing director, interactive integration at Y&R 2.1, a Young & Rubicam start-up consulting unit. He joined Y&R Group as managing director, interactive services at Burson-Marsteller. Len led interactive services at Messner Vetere Berger McNamee Schmetterer EuroRSCG, and started and led the information industry practice at Fleishman-Hillard. Len's book of essays on marketing, based in part on this column, is "Marketing in the In-Between: A Post-Modern Turn on Madison Avenue." He received his Ph.D. from Columbia and reads informational and mathematical theory for fun.

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