linking strategy to metrics - kpi working group presentation 5

Linking Strategy to Metrics

KPI Working Group Meeting

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Wednesday 21st Sept 2016

Presented by:Chikodi OnyemerelaPartnerships Manager

What gets measured gets done!

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Strategy defined!“Strategies details “how” an objective is to be achieved, it can be described

as a game plan, a Blueprint or Plan of Action designed to achieve a specific overall aim.

Strategies are broad intents aimed at achieving stakeholders value in an organisation”.

If you have an objective you must also have a strategy to help ensure your resources (time, effort, and budget) are used to the best effect.

• It entails matching the organisational objectives with its internal abilities and external capabilities

• It answers the following:

- where are we now?

- where are we going?

- How will we get there?

Don’t these three question require Metrics? What Metrics?

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Every Strategy needs an operational Plan - CIM

What the British Council needs to be good at to succeed?

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What the British Council needs to be good at to succeed? ….Cont.

How ?

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Global impact KPIs for the British Council

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Metrics defined!“ A Metric is a system of measurement that quantifies a trend, dynamic or characteristics” - Farris et al, 2009

Marketing metrics or metrics is a measure which indicates how Effective and/or Efficient our marketing/activities is, or have been e.g of a marketing campaign

By the way:

Measures of Efficiency – how well are we doing things?

Measures of Effectiveness – are we doing the right things?

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Metrics and AnalyticsAnalytics: is literally the science of Analysis. In essence

understanding what’s going on and why, as well as leveraging that insight. These are often more qualitative in nature eg what made a particular marketing campaign phenomenally successful (appropriate timing, accurate targeting, the offer or all of them).

Both metrics and analytics help professionals measure performance and become more accountable

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Metrics Analytics Insight Action Review

Strategic intents and MetricsMetrics take data and turn them into information that inform strategy and vise versa and enables their

measurement. “Every

single SBU need to be doing something in every single Focal State and choices will require some

discipline. Would like to see impact in every SBU area, in every Focal State” –

Connie, Aug. 2016

“we make a positive contribution to the countries we work with – creating opportunities, building

connections and engendering trust. Not forgetting that this supports UK prosperity, security and influence.

On internal matters, we agreed a new approach to planning and performance measurement which I hope

you will find more relevant and simpler to use - Mandy, Sep 2016

Surplus growth from teaching/exams (8.5% p.a.) to fund work in countries not eligible for ODA

- Country strategy A balanced offer to meet market demand – Country

strategy Efficiencies in all other

areas – Country Strategy

“…in a way which enables us as an organisation to recruit, motivate and retain the right people with right

skills in the right role” – Pay award 2016

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The Execution Gap…Metrics & Analytics…so What?

“Exploiting the data and analytics potentials available today and will continue to be available in the future is absolutely critical for

success. It is how we can leverage the explosion of data and the power of analytics to drive fast based decision making that really

matters, not just Metrics and Analytics for the sake of it”

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Why we must use Metrics!• Business growth

• Highlights customer relevance

• Demonstrates marketing effectiveness

• Shows us as a Modern Organisation

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Importance of metrics• Enables a shift from intuitive and gut feeling to evidence base decision making thereby

improve the quality of decision making

• Enables effectiveness and reduce waste

• Provides a way to see if our strategy is working. Strategic metrics provides prove of growth

• Help to focus the team’s attention on what matters most for success

• Allow measurement of outcome and outputs not just of the work that is performed (inputs)

• Provide a common language for communication about performance

• Enables to record customer journey over time.

• Enables us to demonstrate legitimately ‘from awareness to action’.

• Enable us to clearly determine margins and business growth

• Metrics will allow us differentiate between two different kinds of customers ie

- those to use Acquisition strategy; and

- those to build relationship for retentionwww.britishcouncil.org 12

Lead and Lag metrics

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Types of metrics• Marketing metrics

• Digital metrics

• HR metrics

• Financial metrics

• Customer service metrics

• Marketing mix metrics - metrics around the Ps

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Digital is massive! If the world is converging why not?

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Currently Facebook has 4 billion video views per day, 75% of which is mobile. It sure look set to overtake Youtube, particularly from Mobile perspective.

Metrics versus KPIs

A KPI is always a Metric but a Metric may well not be a KPI

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Let’s get the point straight

“ Metrics do not necessary tell you what the answers are, it rather tells you we need to look at X, Y, Z trends”

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Traffic light system and Dash BoardsManagers, Directors are always pressed for time and ploughing through spreadsheets of data to look for early warnings signs is probably unrealistic. It is the direction of change which matters rather than the absolute numbers.

Establishing the key Metrics you want to monitor and the frequency and set a Traffic Light System, or arrows to highlight changes that needs attention. It looks to me a key deliverable for this working group.

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Red

Green

Amber

Indicating a deterioration

A stable position

An improving performance

Dashboards

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Typical dashboard

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Vanity versus Sanity MetricsBefore you measure, be sure what you are measuring. Your metrics needs to make a difference in the business, they need to be relevant and actionable. E.g Revenue/Turn-over is Vanity while Profit is Sanity

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Vanity versus Sanity metrics….cont.Conversely, Vanity Metrics eg:

- Likes on Facebook etc

- classification by brand

- ripple effects

- key information

- smartest way to priorities our offer

- fine tune engagement

- tool kits

- try to get 360 views of our customers

- cross segment synergies

- make brand go viral

- close link marketing

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Vanity versus Sanity metrics….cont.• Sanity metrics are those metrics that speaks to the organisation’s areas of primary

concerns. They are metrics that speaks explicitly to our purpose, mission, objectives, strategy and tactics ie:

- impact

- reach

- surplus

- ROI

- stakeholders’ value

- reputation

- time dimension metric

- Past – how did we do?

- Present - How are you doing?

- Future – How will we do?

-

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What makes a good metricsFocus – is the metrics focused on something we need to measure

Justifiable – can we justify why we are measuring it. Does it align to the key strategy or tactics

Cost effective – can we cost effectively gain relevant access to the Data and convert that Data into useful information

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What to consider

What – what should our Metrics be called? e.g customer acquisition, customer retention, customer retention, customer loyalty, staff attrition etc

Why – why do we need this metrics? Does it relate to key elements of our strategy or to our tactics

Where – where would the data come from?

How – how will we measure performance? What’s the formular and the target?

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Classification of metricsStrategic Metrics: these are metrics that contributes or give indications to overall

business goals e.g impact, reach, revenue, pipeline, customer retention rate, analyst rating, gross margin contribution, competitive share of voice, growth in customer life time value. They are used to set direction, they quantify impact on key business KPIs, Strategic metrics empower executive, they help earn credibility at senior levels in organisation.

Tactical Metrics: these are metrics that allows the organisation (marketing) to measure and monitor its own performance and judge the success eg for a campaign (no of leads generated, e-mail open rate, website conversion, social impact, download etc)

Operational Metrics: these are different from strategic and tactical metrics in that they are typical indicators for how well or poorly our cross functional team are align and help pin point bottlenecks in the team eg In sales funnel (sales and marketing), manufacturing and logistics, research and development, Human resources, customer care, finance. They are used to maesure performance

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The Hierarchy Objective

Strategy

Tactics

Metrics

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The Hierarchy ……cont.1st:the CEO and the Board decides the objectives ass well as the

broad strategy to deliver the objectives

2nd: the staff devices the tactical and operational plan that will deliver the objectives.

We therefore needs three levels of metrics:

• The top level – geared to objectives

• The middle level – geared to the strategy

• The lower level – geared to the tactics

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The Hierarchy ……cont.

What we want to achieve

how broadly we intend to achieve

How specifically we intend to achieve

Progress towards or meeting them

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Objective

Strategy

Tactics

Metrics

Examples of metrics for the British CouncilA. Product Metrics:

• Average revenue per product in the portfolio

• Total revenue generated by this product or activities

• Margins generated

• Number of states this product is delivered in

• Total number of customers or audience reached

• Brand or social impact generated (this will need defining in advance)

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Examples of metrics for the British Council…cont.B. Metrics for regions/Focal State /markets/segments:

• Average revenue per regions/Focal State /markets/segments

• Share of market by regions/Focal State /markets/segments

• Margins and Contribution per regions/Focal State /markets/segments

• Total revenue earned

• Average spend per customer (share of wallet)

• Retention/Churn rates

• Repeat purchase rates

• Cross-sell rates

• Average lifetime value per customer

• Ratio of new:old customers

• Revenue by channel/partnerwww.britishcouncil.org 31

Examples of metrics for the British Council…cont. B. Metrics for regions/Focal State /markets/segments…cont.:

• each cost centre’s (marketing. Sales, programmes, product etc ) spend as a percentage of

revenue

• Return on investment of cost centres (marketing. Sales, programmes, product etc)

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Communication metrics• Brand awareness (unprompted and prompted recall)

• Brand equity measures

• Value of PR cover achieved

• Net promoter scores

• Awareness levels by product or activity (leaders and influencers)

• Awareness: interest ratios

• Interest: sales ratio

• Average sales value per customers

• Average sales per sales/business developer

• Size of activity communities – online or offline activity

• Web hits and unique users

• Average number of pages read/time online

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Communication metrics…cont.• Frequency of website visits

• Cost per enquiry

• Cost per pitch/proposal

• Cost per sale

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Examples of metrics for the British Council…contA. NPD Metrics:

•Percentage of successful new products or initiatives (note success needs defining in advance in

terms of margin or the impact expected)

•Time to market (from idea to launch)

•Average revenue or impact per new product/activity

•Number of productive years forecast (lifetime value of the product)

•Months to break even on development costs

•Penetration of new product

•Development spend as a percentage of SBU revenue

•Ratio of revenue from new: old products (defined in advance but possibly “new” defined as

launched in last two years)

•Return of new product investment

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In fact….Balance Score Card

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Example of Balance Score Card

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Thank you!

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