Data Driven: Dashing Toward Data
You might ask: Why is it important for the marketing department to produce a weekly dashboard and share it with other departments within the company? Which direct marketing metrics are critical for company stakeholders to receive weekly in order to react to campaign results? How does a multichannel company combine print and online results?
The answer is to the point: It’s critical to have all major departments looking at the same set of numbers when evaluating business performance. While the details each department produces may differ, the critical metrics must be identical. If accounting practices used by the individual departments differ for sales, orders, contribution, etc., overall business goals can suffer. A weekly dashboard distributed to all key stakeholders/departments will quickly highlight any discrepancies.
A business may need several dashboards, depending on the marketing channels used. If you have print campaigns, online campaigns and email campaigns, the critical metrics for each can differ significantly. That said, it is important to have grand totals for revenue, orders, gross margin and contribution margin.
The charts (in the mediaplayer to the righ), when combined, form a typical dashboard for a multichannel direct marketing business. To reiterate, it is important to build a dashboard that reflects your industry’s nuances and your company’s overall business goals. Adding critical metrics and removing columns that are not applicable to provide perspective on your business goals should be a priority for any department tasked with producing the weekly dashboard.
It’s assumed that this marketer is running concurrent print, email and PPC marketing campaigns. The plan (forecast) is shown in the charts as a total. It can also be shown for each individual campaign, if necessary. (Note: Various components of what is discussed below may or may not be critical to your particular business. You can substitute in any metrics not mentioned below, and remove metrics that are not applicable.)
I have assumed a 50 percent margin for both dashboards. If applicable, prior year results can also be added.
In the case of the print dashboard, it’s important to provide the average of printed pages in the totals. This affects the cost per thousand pages circulated (Cost/M Pgs Circ.’d) calculation. Following are the calculations embedded in the print dashboard:
- RR% (Response Rate Percent) is calculated by dividing your Orders into your Mailed Circ.
- AOV (Average Order Value) is Revenue/Orders.
- Cost/M Pgs Circ.’d is Cost/((Mailed Circ. x Printed Pages)/1,000). This metric provides an equal look at prior year results or against plan if the number of printed pages or the total circulation has changed significantly.
- Mktg. Contribution is (Revenue x Margin)-Cost.
- Contribution per Order is Marketing Contribution/Orders. This metric is useful in determining how hard each order is working toward revenue goals.
The email dashboard introduces some unique metrics that need to be followed to maintain email efficiencies:
- The Open Rate is calculated by dividing your opened emails into your delivered emails. This is a significant metric in determining both the power of your headlines and the targeted list used.
- The Unsubscribe Rate measures the impact of the frequency of your email campaigns.
- The Conversion Rate is Orders/Delivered emails. It is the online equivalent of the print campaign RR%.
Pay Per Click Campaigns
The PPC dashboard also measures unique metrics that establish campaign efficiencies:
- CTR (Click Through Rate) is calculated by dividing total Clicks into total Ad Impressions.
- CPC (Cost per Click) is Cost/Clicks. This metric should be constantly monitored to ensure profitable guidelines are maintained for the PPC program.
- Bounce Rate measures the total clicks that visit only one page on the website, or “bounce” away due to finding non-applicable material. It is an important metric in determining how targeted your keywords are to the customer.
- The Cart Abandonment Rate provides insight into how many potential customers are leaving during the checkout phase. An unusually high rate can potentially point to either a Cart design issue or higher than expected shipping charges. It is also an opportunity to design a triggered email campaign to recapture a portion of the lost sales.
Catastrophic results can occur if all key business stakeholders are not privy to the corporate dashboard, and are instead using their own individual results to measure success.
For example, a multichannel direct marketer in the apparel industry failed to deliver a dashboard to the merchandising department. By forgetting to include email campaign sales and orders in its department results, the merchandising group established holiday inventory buys assuming that certain styles were well below plan.
The reality, however, was that through targeted emails, the styles in question were actually selling above plan. Significant potential sales were lost during the holiday period due to lack of available inventory.
Providing all key business stakeholders with a weekly dashboard of current results allows for a uniform understanding of business trends, the ability to rapidly affect change if necessary, and efficient planning for future campaigns. It needs to be maintained as a priority in someone’s job description.
Philippe Graner is director of marketing strategy at the Mission Kan. direct marketing agency J. Schmid & Associates. Reach him at email@example.com.