Five Things Every CMO Must Know About Web Analytics, Part 4

In part one, I outlined the five critical things every CMO must know about Web analytics. Today, I want to tackle item three: establish your scorecard now. I’ll deconstruct what makes a scorecard effective and how to better leverage it within your organization.

At my company, we define a scorecard as an easy-to-understand framework to define, create, and share key performance indicators (KPIs) that monitor the results of the business. Within our focus area, the scorecards are specific to managing and optimizing the Web channel. Over the past several years of providing this service to several enterprise organizations we’ve learned some universal truths that span industries and site types.

First Goals, Then KPIs. Then Your Scorecard

Don’t rush the process. A simple analogy for this is painting. The prep work (sanding, caulking, and taping) requires discipline and time up front, but it’s critical to do before you ever dip a brush into the paint.

The same goes for scorecards. Before you can design an effective scorecard, you must make sure you’ve spent ample time with your team defining and prioritizing your site goals and the KPIs that align to those goals. This might sound obvious, but it’s often overlooked. If the scorecard contains a bunch of data that “someone might find useful one day,” you end up with something that’s too bulky, off target, and unmanageable.

If you’re at the starting point of this process, a good resource is “The Big Book of KPIs” by Eric Peterson. It contains contributions from several experienced Web analytics professionals (including members of my staff).

What Makes an Effective Scorecard?

To ensure we’ve designed an effective scorecard, we run several tests:

• Time is limited. Within 10 minutes can you, or anyone else, digest the information in the scorecard and determine areas of success and areas of concern?
• Make sure it’s actionable. Is it clear from the scorecard the team knows what to fix or where to focus its attention to do deeper investigative analysis?
• Tune out the noise. Does it contain any data that aren’t being used to make decisions on a consistent basis?
• Prioritize and summarize. Are the KPIs and recommendations managed within a single, printable page?

Design Plays an Important Role

When I say design, I’m not referring to color palette or logo placement. I mean design as it applies to KPI layout and organization, icon use to symbolize positive and negative indicators, and graph use to tell the data’s story more visually. All these design elements can have a huge impact on how people within your organization generate value from the scorecard.

For example, in a custom scorecard we designed we organized the KPIs into six specific interest zones that reflected the site’s different functions:

• Key statistics. To monitor overall trends in performance over time
• Products. To improve online merchandising
• Navigation. To analyze site conversion and identify steps within the funnel processes to improve on
• Site referrals and campaigns. To track marketing ROI (define) and cross pollination from other brand sites within the company
• Store locators. To see how online research influences offline purchase intent
• Call-center stats. To calculate cost savings by diverting calls to the Web

For the client, it was important the scorecard reflect multiple department and business channel interests. At the same time, the layout allowed different stakeholders from throughout the company to easily see the metrics related to their role and area of responsibility and see it in context of the overall picture.

Sharing Is Believing

How many people in your marketing organization analyze your metrics? One? Two? A handful of people? In the most successful organizations we work with, a common characteristic exists: everyone within the team tracks the performance of key metrics. Everyone. I’ve seen scorecards distributed and used by thousands of people worldwide within an organization. It shouldn’t be delegated just to the analytical guy who also runs online advertising. In those scenarios, I often see the scorecard become just a monthly task out of touch with real business goals. No one, therefore, views it as a critical management tool.

Once you’ve built the scorecard, you’re just beginning. How your organization leverages the scorecard over time to manage and optimize your business is where it gets interesting.

Foreshadowing

In part five, I’ll discuss how to breed the ROI mindset and get analysis into your marketing organization’s DNA.

Questions, comments, have a story to share? E-mail me!