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6 November 2012

Measuring for the sake of measuring: 5 major pitfalls in measuring marketing performance

Dashboards are everywhere, in daily life in your car, microwave or heating system.  But they are also more and more present in companies.  Just yesterday I was in a major customer service center with TV-screens projecting the KPI’s in real time (such as queuing and handling time).  This is a very good evolution, but too often not used to its full potential!  Isn’t it funny that as a manager, you do react immediately to the signals on the dashboard of your car (e.g. call the garage for servicing when you get a reminder) but just stare at your company’s dashboards and signals in a boardroom meeting?

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More and more companies are measuring their performance and creating dashboards accordingly.  However, this measuring does not always lead to the right decisions and actions.  A lot of companies do not go further than measuring for the sake of measuring: they forget to relate the results to the overall objectives and consequently miss opportunities to optimize their go-to-market. Here are 5 major pitfalls to be avoided:

  • Irrelevant measuring: it is always important to be aware of your overall objectives so you can put things in perspective.  Take the example of online hit rates, where it often happens that hits are created by bots for whatever reason.  Relevancy of those hits with regards to the overall objective is crucial in this matter.  If you would take them into account without thinking twice, it would be like looking at the thermometer in your car to avoid crossing the speeding limit.  Yes, you would look rather stupid then on the speed camera…
  • The ‘snapshot trap’:  The pitfall of a lot of dashboards is that they look at a KPI at one moment in time, a snapshot.  Again, you should be able to put things in perspective and look at evolutions over time.  So maybe we should better talk about a ‘graphboard’?  As a car driver you should not panic when your fuel consumption is suddenly 50% higher after driving the whole time in the city, you know that from past experience.  In the same way you should look at evolutions and past experiences as a company.
  • Targets leading their own life: too much focus on the targets as such can lead people to do everything for reaching them, even things that can harm your company.  In the car example, you see it happen a lot: people driving irresponsibly to get somewhere on time.  And at the other hand when a target is or will be reached earlier, motivation might go down, so it is better to ‘evolve’ your targets.  Imagine when your fuel tank is almost empty and it will be a challenge to reach the next gas station, you will start driving very carefully and eco-friendly, but as soon as you see you will be able to reach it, you will again drive as before.
  • Blinded by the dashboard: next to evolving your targets you also might need to evolve your KPI’s to avoid being blinded at a certain moment.  Objectives might have changed or new data might be available so you can use a more straightforward KPI.  Forgetting to do this might end up like the driver that is only looking in his side mirrors and forgets looking in the rearview mirror, causing him to overlook the biker in his blind spot.  A blind spot mirror might be a good addition to the ‘dashboard’.
  • Fata Morgana of competitive advantage: With the current technology a car driver can easily track his fuel consumption associated with different driving stiles, but it’s only when he aligns his driving style with the most eco-friendly driving style that he will be able to have consistently lower fuel consumption.  Marketing Performance Management does not create sustainable competitive advantage as such; it’s only a tool or method to improve.  The creation of a sustainable advantage lies in the learnings that you implement from the measurement and subsequent analysis. 

    To conclude, there is one common denominator in all of these pitfalls: put things in perspective by relating the KPI’s to the overall objectives. Therefore Marketing Performance Management needs to be tackled as a process, starting from the overall strategic objectives and translated into both tactical and operational objectives. As long as there are companies forgetting to do so, they will only be measuring for the sake of measuring!  To put it with the words of Brendan Dawes: ‘Data alone is not enough. Data needs poetry’.
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