INMA_A01.QXD

Table 4.4 illustrates specific Internet marketing measures within the four main areas of

organisational performance managed through the balanced scorecard. In our presenta-

tion we have placed objectives within the areas of efficiency(‘doing the thing right’) and

effectiveness(‘doing the right thing’). For example, efficiency involves increasing conver-

sion 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 mar-

keting 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 cus-

tomer and business value perspectives are indicated with effectiveness, but these

measures can be applied across all four areas as we have shown.

Performance drivers

Specific performance metricsare used to evaluate and improve the efficiency and effec-

tiveness of a process. Key performance indicators (KPIs)are a special type of performance

metric which indicate the overall performance of a process or its sub-processes. An exam-

ple of KPIs for an online electrical goods retailer is shown in Figure 4.9. Improving the

results from the e-commerce site involves using the techniques on the left of the diagram

to improve the performance drivers and so the KPI. The KPI is the total online sales

figure. For a traditional retailer, this could be compared as a percentage to other retail

channels such as mail order or retail stores. It can be seen that this KPI is dependent on

performance drivers such as number of site visits or average order value which combine

to govern this KPI. Note that the definition of KPI is arbitrary and is dependent on scope.

So, overall conversion rate could be a KPI and this is then supported by other perform-

ance drivers such as engagement rate, conversion to opportunity and conversion to sale.

A further objective-setting or metrics framework, the online lifecycle management

grid, is presented at the end of the chapter as a summary since this integrates objectives,

strategies and tactics.

STRATEGIC GOAL SETTING

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 Example allocation of Internet marketing objectives within the balanced

scorecard framework for a transactional e-commerce site

Balanced scorecard sector Efficiency Effectiveness

Financial results  Channel costs  Online contribution (direct)

(Business value)  Channel profitability  Online contribution (indirect)

 Profit contributed

Customer value  Online reach (unique visitors  Sales and sales per customer

as % of potential visitors)  New customers

 Cost of acquisition or cost  Online market share

per sale (CPA / CPS)  Customer satisfaction ratings

 Customer propensity to  Customer loyalty index

defect

Operational processes  Conversion rates  Fulfilment times

 Average order value  Support response times

 List size and quality

 E-mail active %

Innovation and learning  Novel approaches tested  Novel approaches deployed

(people and knowledge)  Internal e-marketing  Performance appraisal review

education

 Internal satisfaction ratings

Performance
metrics
Measures that are used
to evaluate and improve
the efficiency and
effectiveness of
business processes.

Key performance
indicators (KPIs)
Metrics used to assess
the performance of a
process and/or
whether goals set are
achieved.