The balanced scorecard
Some larger companies will identify objectives for Internet marketing which are consistent with existing business measurement frameworks. Since the balanced business scorecard is a well-known and widely used framework it can be helpful to define objectives for Internet marketing in these categories.
The balanced scorecard, popularised in a Harvard Business Review article by Kaplan and Norton (1993) can be used to translate vision and strategy into objectives and, then, through measurement assessing whether the strategy and its implementation are successful. In part, it was a response to over-reliance on financial metrics such as turnover and profitability and a tendency for these measures to be retrospective rather than looking at future potential as indicated by innovation, customer satisfaction and employee development. In addition to financial data the balanced scorecard uses operational measures such as customer satisfaction, efficiency of internal processes and also the organisation's innovation and improvement activities including staff development. It has since been applied to IT (Der Zee and De Jong, 1999), e-commerce (Hasan and Tibbits, 2000) and multi-channel marketing (Bazett et al., 2005).
Balanced scorecard
A framework for setting and monitoring business performance. Metrics are structured according to customer issues, internal efficiency measures, financial measures and innovation.
Efficiency
Minimising resources or time needed to complete a process. 'Doing the thing right'.
Effectiveness
Meeting process objectives, delivering the required outputs and outcomes. 'Doing the right thing'.
Table 4.4 illustrates specific Internet marketing measures within the four main areas of organisational performance managed through the balanced scorecard. In our presentation we have placed objectives within the areas of efficiency ('doing the thing right') and effectiveness ('doing the right thing'). For example, efficiency involves increasing conversion rates and reducing costs of acquisition. Effectiveness involves supporting broader marketing objectives and often indicates the contribution of the online channel. It is useful to identify efficiency and effectiveness measures separately, since often online marketing and web analytics tend to focus on efficiency. Hasan and Tibbits (2000) note that the internal process measures in particular are concerned with the efficiency and the customer and business value perspectives are indicated with effectiveness, but these measures can be applied across all four areas as we have shown.
Continue reading here: Decision 1 Market and product development strategies
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