In my previous article I looked at how marketers can quantify UX changes on their websites and the impact these can have financially.
Next on the agenda is the wider question of what digital or marketing initiatives you should prioritise and how can this be justified internally.
It’s often easy for organisations to come up solutions to existing problems or even new ideas to take the business forward. The battle is getting those items approved and actioned with a limited budget.
In this article I will look at how we can prioritise all of those ideas and allocate budget to those that could have the most affordable impact. By using a scorecard approach we are able to review all of the initiatives in one place and prioritise them based on what is actually affordable and achievable, yet useful to the business.
When creating this prioritised list of marketing initiatives many organisations only look at one aspect of an item and prioritise it based just on revenue opportunity. What if we could look further afield and seek to prioritise all our activities using a simple method that would clearly indicate which ideas we could implement first?
Define The Levers
The first step is to assess is what is important to the business. Typically I put this into five categories:
- Revenue generation – How much of an impact will the idea have on acquisition of new customers or growth of existing customer spend
- Cost of the change – How much will the idea cost the organisation to create and deploy into the market
- Ability to change – How quickly the organisation is able to take its ideas to market
- Risk of change – What impact the idea will have on the business’ ability to get customer feedback or process transactionsNot forgetting:
- Customer satisfaction or customer feedback – sometimes this metric is overlooked, but it is exceptionally important as it is our only feedback on what the customer feels about us. The revenue metric allows us to measure customer behaviour but we might not get a good understanding of what they think about us. It depends what mechanisms are in place but some industries have a dedicated function to measure this. Virgin Media used to have a Net Promoter Score across the business and many automotive companies measure sales and aftersales as well as the website experience through a provider called Psyma.
These levers are by no means fixed. For example telecoms and insurance companies might want to add in churn or retention as another metric.
By outlining the above five levers we can start to score each of our ideas.
Set The Importance And The Scores
The next steps are the definition of the scores and the importance of each of the levers to the business.
Starting with the definition of the scores, the diagram below has the levers from above with a score next to each of them.
Define the scores
We need to define what each of the scores means to the business. As each and every business will have a different definition of good (indicated as high above) it is important to outline and agree this upfront.
Typically getting business heads to help define the scores makes a big difference. Why? If things are tightly defined upfront there is little arguing with the scores, and there is buy-in early on in the scorecard process.
In the example below I have added in some definitions. These will vary hugely by business. Some organisations will not be able to deploy within four weeks while others currently deploy weekly. Others might be challenged to grow 10% in revenue with others growing potentially by between 20% and 30%.
Once we have determined the definitions of the scores for each of the levers we need to start by entering scores against our ideas. For example:
Idea 1 is to create a single customer view for the business to help it target customers more effectively within its CRM programme.
Idea 2 is to create an onsite optimisation process to help decrease cart/basket abandonment.
We score each of them as follows:
Setting the importance
The next part of the process is to rank the levers from most to least important to the organisation.
This allows us to create a weighting or to set the impact of each lever. For example some organisations are all about growth. Therefore they would increase the importance of the revenue generation lever. However others, such as as Zappos, have built their business on customer service so Customer Satisfaction would be their highest-rated lever.
In our example, the business is focused on revenue generation but with a focus on agility. We use the highest score (5) to set the most important lever, through to 1 as the lowest score for the least important.
- 5: Revenue Generation
- 4: Ability to Change
- 3: Cost of the change
- 2: Customer Satisfaction
- 1. Risk of Change
These values are then used to up-weight the importance of the scores for the individual ideas. In the example below, for idea 1, we can see how the weighted score is calculated. The first row shows the score before the weighting. However a true representation of the score is shown in the second row with the weighted value.
We multiply the score we set above by the weighting value. For example in the “Revenue Generation” column we took the “Score” of 3 and multiplied this by the “Weighted Value” of “Revenue Generation” of 5 to get 15.
We now have a weighted scorecard. This now allows us to start plugging in our ideas to determine the priority.
Put It Into Practice
Let’s now create our scorecard with our two ideas. Each of these ideas will impact the business differently.
In the table above the score for each lever is shown with the weighted score in brackets. Once we have established the final scores we can then rank the ideas. In this example Idea 2 is ranked first with a score of 37.
To recap how we got here:
- Define the levers that are important to your business – limit yourself to five. If you have more than five the process can become too time-consuming and complex
- Set your scores for each of the levers. Remember to get business buy-in to these scores, as setting these early will reduce discussion around the final scores.
- Set the weighting of the levers to define which are the most important to your business
- Input your ideas into the scorecard to identify the highest-scoring idea.
The best way forward from here is market testing to validate what has and hasn’t worked by using the best source of data – the customers.