Internet Marketing (MM 3841)

1. Internet Marketing (MM 3841) Evaluating the Marketing Program

2. Overview • Why should senior managers be concerned about metrics? • What are the steps to implement the Performance Dashboard? • An example of implementing the Performance Dashboard -- Marketwatch.com • What external sources of metrics information can firms use to chart their progress?

3. Why Senior Managers Should Be Concerned About Metrics • Five ways in which metrics can have a positive effect on the growth and vitality of the organization: • Help define the Business Model. • Help communicate strategy. • Help track Performance. • Help increase accountability. • Help Align Objectives.

4. Overview • Why should senior managers be concerned about metrics? • How can the health of online firms be assessed? –Performance Dashboard • What are the steps to implement the Performance Dashboard? • An example of implementing the Performance Dashboard -- Marketwatch.com • What external sources of metrics information can firms use to chart their progress?

5. Performance Dashboard • The Performance Dashboard is intended to reflect the health of a business. • The strategy framework drives the necessary metrics. • Resources and partnerships are featured in the resource system of the business model.

6. Metrics Branding and Marketing Market Opportunity Business Model Implementation Customer Performance Dashboard (cont’d) • The Performance Dashboard is composed of five categories of metrics:

7. Components of the Performance Dashboard 1. Market Opportunity Metrics: • Market opportunity metrics assess the degree to which the firm can accurately gauge the market opportunity. • Generic indicators include the ability of the firm to include the most attractive segments, the ability of the firm to understand and map the competitors’ strategy evolution and the ability of the firm to track the evolution of target segment needs.

8. Components of the Performance Dashboard (cont’d) 2. Business Model Metrics: • Business model metrics capture the subcomponents of the business model: • the value proposition, • online offering, • resource system, and • financial metrics.

9. Components of the Performance Dashboard (cont’d) 2. Business Model Metrics: • Subcomponent 1: • The value proposition is composed of three parts: target segment, benefits offered, and capabilities that drive the benefits. Metrics for this assessment would focus on customer perceptions of the benefits that a given site offers relative to competitors.

10. Components of the Performance Dashboard (cont’d) 2. Business Model Metrics: • Subcomponent 2: • Online Offering Metrics: Metrics should reflect the entire decision process from pre-purchase to post purchase. Offering metrics focus more on the attributes and functionality of the site.

11. Online / Offline CustomerPurchase Process • Awareness of online offering vs. offline offering AWARENESS • Perceived benefits of Web vs. offline offering KNOWLEDGE Prepurchase • Available offering information online vs. offline • Currency of information online vs. offline EVALUATION OF ALTERNATIVES PURCHASE • Security and privacy associated with purchasing online vs. offline Purchase • Responsetime online vs. offline SATISFACTION • Customer loyalty and incentive programs online vs. offline LOYALTY Postpurchase DISPOSAL • Exchange policies online vs. offline

12. Components of the Performance Dashboard (cont’d) 2. Business Model Metrics: • Subcomponent 3: • Resource System Metrics: The resource system is based on the benefits offered to consumers. From these benefits, the firm would analyze the capabilities that are necessary to supply the benefits.

13. Components of the Performance Dashboard (cont’d) 2. Business Model Metrics: • Subcomponent 4: • Financial Metrics: Captures the revenues, costs, profits, and balance-sheet metrics of the firm.

14. Components of the Performance Dashboard (cont’d) 3. Marketing and Branding Metrics • Marketing and Branding Metrics: These focus on marketing communications and branding effectiveness.

15. Components of the Performance Dashboard (cont’d) 4. Implementation Metrics • Implementation Metrics: These focus on the effectiveness of a company’s human resources program as well as its processes, organizational structure, systems (including information, incentives, and rewards), coordination mechanisms, culture and management style, and technology systems.

16. Components of the Performance Dashboard (cont’d) 5. Customer Metrics • Customer Interface Metrics: Measures the customer’s experience with the technology interface; that is, the customer’s response to the 7C’s of the interface. • Customer Outcome Metrics: This captures output metrics such as overall costs of satisfaction, average order size, and customer profitability.

17. Overview • Why should senior managers be concerned about metrics? • How can the health of online firms be assessed? – Performance Dashboard • What are the steps to implement the Performance Dashboard? • An example of implementing the Performance Dashboard -- Marketwatch.com • What external sources of metrics information can firms use to chart their progress?

18. Implementing the Performance Dashboard • Step One: Articulate Business Strategy • Step Two: Translate the Strategy into Desired Outcomes • Step Three: Choose Metrics • Step Four: Link Metrics to Leading and Lagging Indicators • Step Five: Calculate Current and target Performance

19. Step One: Articulate business strategy Step Two: Translate strategy into desired outcomes Step Three: Choose metrics Step Four: Link metrics to leading and lagging indicators Step Five: Calculate current and target performance • Market Opportunity • Opportunity size? • Competitive environment? • Market Opportunity • Market size and growth • Average age and income • Competitor concentration • Business Model • Unique value proposition? • Capabilities vs. competition? • Business Model • Customer-perceived benefits • Exclusive partnerships • More invested in technology vs. competition • For each metric, determine the metrics that it affects and that affect it • Map the linked set of metrics, indicating leading and lagging indicators • Ensure that there is a balance between leading and lagging indicators • For each metric, calculate current level of performance • Determine target level required to meet outcomes described in Step Two • Ensure that targets are consistent • Marketing • How to develop brand? • Marketing • Customer brand awareness Define goals and value proposition Develop resource system required to deliver the strategy • Implementation • System uptime percentage • Number of IT staff • Percent of inaccurate orders • Implementation • How to go to market? • Customer • How to acquire customers? • How will customers change? • What is customer experience? • Customer • Market share • Purchases per year • Success rate • Service request frequency

20. Overview • Why should senior managers be concerned about metrics? • How can the health of online firms be assessed? – Performance Dashboard • What are the steps to implement the Performance Dashboard? • An example of implementing the Performance Dashboard -- Marketwatch.com • What external sources of metrics information can firms use to chart their progress?

21. Performance Dashboard Example www.marketwatch.com

22. Performance Dashboard Example Marketwatch.com (cont’d) • Step one: Articulate the Marketwatch.com Strategy • Value proposition:“To be a leading Web-based provider of comprehensive, real-time business news, financial programming and analytic tools.” • Marketwatch.com Offer: The aim is to deliver three key benefits to users: real-time information, comprehensive and in-depth analysis and tools and multimedia access.

23. Performance Dashboard Example Marketwatch.com (cont’d) • Step one: Articulate the Marketwatch.com Strategy (cont’d) • Resource System: Consists of three layers. • Core benefits delivered to users as described in the company’s offer. • Capabilities that must be in place to deliver the core benefits. • The activities and resources that need to be retained to deliver these capabilities.

24. Performance Dashboard Example Marketwatch.com (cont’d) • Steps Two and Three: Translate Strategy into Outcomes and Metrics. An effective way is by asking key questions for each of the five categories. • 1. Market Opportunity: • Is the opportunity significant? • How intense is the competition?

25. Performance Dashboard Example Marketwatch.com (cont’d) • Steps Two and Three • 2. Business Model: • How unique is the Markwetwatch.com value proposition relative to competitors? • Are the Marketwatch.com resources and Partnerships significantly better than competition’s? • How sustainable is the Marketwatch.com’s value proposition relative to the competition’s? • Will MarketWatch.com be able to maintain profitability?

26. Performance Dashboard Example Marketwatch.com (cont’d) • Steps Two and Three • 3. Marketing and Branding: • How effective and efficient is the Marketwatch.com’s marketing efforts at attracting new users? • How is the MarketWatch.com brand perceived in the market? • 4. Implementation: • Does Marketwatch.com have an infrastructure that enables it to reliably distribute financial content across multiple platforms?

27. Performance Dashboard Example Marketwatch.com (cont’d) • Steps Two and Three • 5. Customer: • What is the perception of the online user experience? • How satisfied and loyal is the user base?

28. MarketWatch.com Desired Outcome Summary • Market Opportunity • Significant opportunity • Moderate degree of competition • Implementation • Business Model • Best-in-class IT infrastructure • Better value proposition than competitors • Better capabilities than competitors • Revenue and profit Strategy • Customer • Marketing and Branding • Better brand awareness than competition • User acquisition • User online behavior • User satisfaction and loyalty

29. Performance Dashboard Example Marketwatch.com (cont’d) • Step Four: Link Metrics to leading and Lagging indicators. • The fundamental question is “How do we link the metrics to each other?” • Knowledge of this interrelation will help management understand which groups of leading indicators it needs to focus on in order to achieve its target performance on lagging indicators.

30. Performance Dashboard Example Marketwatch.com (cont’d) • Step Four: Link Metrics to leading and Lagging indicators. (cont’d) • A unique value proposition that is marketed successfully will lead to creation of a strong brand and high brand awareness among users. This will stimulate usage which will lead to an increase in ad revenue because there will be more users viewing more pages resulting in profitability.

31. Leading/Lagging Indicators for MarketWatch.com Market Opportunity Business Model Implementation and Branding Customer Interface Financial Competition underserving market Unique value proposition Build brand Brand awareness Usage Ad revenue Satisfaction and loyalty Attractive segments that company can serve well Attractive offering to users Develop improved offering to users Other revenue sources Profit System reliability Leverage capabilities to deliver offering Invest in IT infrastructure Optimized system costs

32. Performance Dashboard Example Marketwatch.com (cont’d) • Step Five - Calculate Current and Target Performance. • A successful strategy needs to be implemented by setting targets and taking actions to reach those targets. • In many cases, the target performance is to become the best performer in a metric.

33. Performance Dashboard Example Marketwatch.com (cont’d)

34. Overview • Why should senior managers be concerned about metrics? • How can the health of online firms be assessed? – Performance Dashboard • What are the steps to implement the Performance Dashboard? • An example of implementing the Performance Dashboard -- Marketwatch.com • What external sources of metrics information can firms use to chart their progress?

35. External Sources of Metrics Information • Firms are likely to track their value proposition versus competition, customer satisfaction with the site, site usability and financial outcomes.

36. External Sources of Metrics Information (cont’d) • Online Information: • Market Research: Online market research firms collect primarily customer data through online surveys or customer submissions. • Analyst Reports: Analyst reports are data sources that blend primary market data on a particular topic with an analyst’s view of the market.

37. External Sources of Metrics Information (cont’d) • Online Information: • Financial Information: These data sources principally provide statutory filings of financial information on particular companies or aggregated financial data across industries. The data collected generally includes income statement, balance sheet and statement of cash flow information.

38. Example of online information: BizRate—QVC

39. Example of online information:Forrester

40. Mapping Internet Research Onto the Performance Dashboard Financial Information Analyst Market Research Market Implementation Customer Financial