Creating a strategy for the web based on alignment of a corporate scorecard with the REAN web KPI model

1. Fact-based web management
Graham Honeywill
Amberbuzz Consulting Oy
12th January 2010
Version 1.0
The web is the only channel where you must manage through facts..........2
The virtuous web experience (Reach, Engage, Activate, Nurture) ..............3
So who cares? (Building the business case for the web) ...................................4
Quick “primer” for a business balanced scorecard ............................................4
Creating a Fact-based web............................................................................................5
About Amberbuzz Consulting Oy ................................................................................6
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2. Fact-based web management
The web is the only channel where you must manage through facts
How many people visited your Internet site today? How long did they stay there? Did
they get what they came for and leave with a positive experience?
These are basic questions that any business web team can answer. But now ask
about the relevance of these questions and answers to the business itself? That is a
more complex topic that requires a deep understanding of the business, the value
chain within which the business exists, and the role of digital channels in that value
chain.
Of course these questions don’t just apply to online marketing - they are equally
relevant for other communications channels too. The difference with digital
channels concerns the impact and influence these answers can have on channel
effectiveness.
The nature of digital channels means that:
• There will be many more visits here than to any other channel – you can
interact with many people at a vastly lower cost than with other
channels.
• The visits will be much shorter in duration – you have a very small time
available to impact a visitor.
• The visitor is probably “multitasking” and with a short attention span and low
tolerance for complications and delays – get it wrong and you lose the
opportunity extremely quickly and possibly forever.
• The visits are unguided
o there isn’t someone available to show you what you want – it is up
to the visitor to find out for themselves
o if the visitor had difficulties, there is nobody there to recognise
this and compensate accordingly
• The visit starts somewhere away from your site (for example in a search
query) and often ends away from the site (for example with a sale or a
contact query) – meaning the KPIs have to cover the scope of the entire
journey, from intent to delivery and feedback
• The visit will be influenced by content that has been created by others –
outside your scope of control – meaning the KPIs need to integrate co-
created content with your own content in order to provide a complete
view.
All of this leads to the obvious conclusion that this channel can only be managed by
effective web metrics – KPIs, with targets, integrated with business metrics, that can
be used to guide decisions of design, content, layout and capability, with an
effective management process in place that will use these KPIs in tactical,
operational and strategic decision making.
The purpose of this document is to outline a method to identify these KPIs and
develop the targets
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3. Fact-based web management
(Similar rules apply with intranets and extranets although there is a change in the
balance between engagement (keeping the visitor on your site) and efficiency
(getting the visitor to complete her task as quickly as possible) - in the case of the
internet your visitor usually has a plethora of choice so you would tend to want to
engage her for longer – whereas for these other digital channels you want them to
get off the site and on with their real-world job as quickly as possible.)
The virtuous web experience (Reach, Engage, Activate, Nurture)
Luckily for us, it is possible to define all successful web visits as 4 major activity
areas:
• Reach – helping the visitor find your content from the web, for example from
web-based search, and successfully bring them to your web site
• Engage – delivering a positive, branded experience that will engage and
delight the visitor when they arrive at your web site
• Activate – Ensuring that the visit ends with an action to further the goals of
both the visitor and the business (for example a download, a contact, a sale, a
comment, a referral etc)
• Nurture – encouraging the visitor to deepen the dialogue through registration
to a “push channel”, such as mail or RSS, bookmarking and returning to the
site, engaging in a discussion (co-created content) either on the site or
elsewhere on the web. This last step is critical as it builds the basis and
content for others to “Reach” to the site, leading to a virtuous cycle of web
content development.
It is also possible to define a relatively standardised set of KPIs that you might want
to use in each of these 4 phases – providing a common language for target setting
and online channel management, that can be applied across industries and across
different digital channels.
Potential “Reach” KPIs
• Traffic by source (earned, bought, own, offline)
• Organic search effectiveness (targeted keyword ranking)
• Social media effectiveness (clickthrough from social media sites)
• Online banner clickthrough rates
Potential “Engage” KPIs
• Visits, visitors and visit duration
• Bounce rate (visitors immediately leaving the site)
• Online brand image/impression (surveys)
• onsite search effectiveness
• content volume and accuracy (ranking of content views)
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4. Fact-based web management
Potential “Activate” KPIs
• Online sales (and abandonment rate)
• Qualified sales leads
• Contact requests
• Brand engagement activity success rate
• Online tool conversion (for example to job application tool)
• Self service (downloads etc)
• Content referrals, comments, votes
Potential “Nurture” KPIs
• Cross sales (sales to an existing registered visitor)
• Customer referrals on public web (unsolicited)
• Registration to receive “Push communication” such as newsletter, RSS or
mobile
• Online community activity
• Extranet visit, visitor and duration KPIs
• Lead conversion KPIs(sales funnel)
• Knowledge sharing and collaboration
So, given the above, I would argue that measuring web performance is not
complicated. What is complicated, though, is selecting the critical few KPIs for
target setting, and then setting targets for them, integrating web performance with
business metrics.
So who cares? (Building the business case for the web)
Of course, every business has its own model for business KPIs. There will always be
the obvious financial, customer, process and organizational metrics scattered
through the organization – but you will be fortunate if these are somehow integrated
to a standardized “scorecard” or even to a “Balanced Scorecard” as defined by
Norton and Kaplan in the early 1990’s and refined over subsequent years – reference,
(http://en.wikipedia.org/wiki/Balanced_scorecard).
From a web perspective, however, you need to have some sort of framework of
business KPIs in place in order to identify the targets for web metrics. This is
because of the nature of the web itself – an effective web presence touches all
aspects of your business from the HR, development and learning processes, across all
processes and through to sales and cashflow management.
However, even if a formal balanced scorecard framework has not been implemented
into your organization, you can still use this as the basis for gathering the key
indicators of the business and from this work towards a set of targets for the web.
Quick “primer” for a business balanced scorecard
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5. Fact-based web management
The essence of a balanced scorecard is not just the metrics and targets, but also a
focus on the “causal interrelationship” between the selected metrics. For example,
a high staff turnover in the sales office is a lead indicator for problems in the selling
process, which in turn can lead to problems in customer satisfaction which can then
impact sales, margins and or cashflow. By understanding these relationships it is
possible to focus on events at an early stage, before they impact the company’s
performance
The old adage, “You get what you measure” is also quite appropriate to consider
here as there is also a strong interrelationship between the KPis measured and the
corporate values of the organization. So, for example, a company with a top level
KPI for team effectiveness is likely to have a strong emphasis on team development
and matrix management integrated into their corporate value system.
Following are a “default set” of scorecard KPIs for each of the 4 scorecard
dimensions (Financial, Customer, Operational, Learning and growth).
Potential Financial KPIs Potential Customer KPis
• Shareholder value • Improved customer satisfaction
• Increased Sales • More and better referrals
• Improved Gross Margins • Improved loyalty
• Reduced costs • Improved return on marketing
• Improved balance sheet investment
• Reduced customer TCO
• Brand advocacy
Potential Operational KPIs Potential Learning and Growth KPIs
• Communications process • Employee brand and values
effectiveness engagement
• Selling process effectiveness • Team effectiveness
• Development process effectiveness • Staff turnover
• Delivery process effectiveness • New employee inductions
• Product process effectiveness • Employee satisfaction
• Service process effectiveness • Employee share ownership
• Partner management
Each of these dimensions will have an “owner” within your organization, for example
finance, customer markets, business excellence and HR. Once you have found these
people they should be able to guide you to the actual metrics that are represented
here by generic names.
Creating a Fact-based web framework
By taking the above points into account:
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6. Fact-based web management
1. The “default” set of metrics
2. The causal dependencies
3. The corporate value interdependencies
… it is possible to construct a matrix between scorecard metrics and web KPIs,
similar to the one shown below.
This
can
be
used
to
facilitate
a
discussion
within
the
organization
concerning
the
value
of
the
web
towards
each
of
these
business
metrics.
This
dialogue
would
then
allow
you
to
build
a
current
state
and
target
state
–
and
gain
the
mandate
for
change!
About Amberbuzz Consulting Oy
I am a small, independent consultant, based in Helsinki, Finland. I specialise in Digital
Channel Strategy development and execution activities including the activities described
above.
I have two primary modes of operations:
1. I will work directly with you and your company to provide independent and objective
strategic services, tailored to your specific needs
2. I will work through Digital Media Agencies, either our own or as selected by our
clients, to augment the agency skills with the necessary consulting (strategic and
facilitation capabilities).
For more information please contact me, Graham Honeywill at graham@amberbuzz.fi.
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