Strategy, Strategy, Strategy…In today’s news, a marketing manager talks about social strategy, meaning how he is going to go about using social media.
In another news, a campaign manager talks about campaign strategy that would increase the ROI of his efforts.
Analyze the situations where both are fully aware of the corporate strategy vs. not fully aware of corporate strategy. The second situation is just a way of saying that they came out of the town hall meeting with the sr. management office just giving out parrot talk about KPIs, on and on and on…
A strategy is a plan and analytics helps you figure out the right metric for that, while tactics is a serious of one or more actions that achieves sub-parts of the strategy leading to the fulfillment of strategy.
So how to come out with a strategic metric? Often, strategy is a convincing plan that is in the hearts of the generals (General Managers or CEOs) in the battle, we do not measure and follow that on a daily basis, and are measured by the outputs (KPIs) of the strategy. KLIs (Key Leading Indicators) are the ones that helps you predict the performance of you strategic metric and hence predict performance of KPIs.
Here I want to follow something that is apparent, tractable, and can be communicated convincingly using a dashboard regarding your strategic metric, KLIs and KPIs.
RFM can be a marketing strategic measure if overall marketing plan’s strategy is to reward and increase sales among people who are recent frequent buyers and spending more more.
That can not be organization’s strategic metric.
Organizational strategic metric is one that distinguishes your vision in the market place that is specific to your unique product and/or services, and the value segments. Budget is the other side of the coin of your strategy.
Also, organizational strategic metric is not fixed, but it is can not be changing often. Since vision is more fundamental, the strategic metric can change with the flow of the river of the market dynamics; still vision drives everything.
Here is an example of a customer service case study, using strategic metric, KLIs and KPIs. Often I find departments saying, to be best in class in service.
For example, consider a direct selling division of a huge retailer. For customer service in this case, you may find that as long as product quality is at certain level, and 90% of the Level I calls resolved in the first call within 10 minutes, and 90% the remaining calls are resolved at Level II, and 1% of the times product returns are satisfactorily accepted, then you may envision that as customer service success story. The way you achieve this is using the strategy, say, selling the product only if the customer has certain credit level score with a friend of certain type in Facebook friends list.
KLIs are metrics that help you reduce the differences between Best in Class goals metric, expected to achieve vs. your organization’s strategic metric or alternatively KLIs are metrics that optimizes your organization’s strategic metric. Some KLIs are, (1) Percent transactions of certain types that puts the credit score close to cut off score on a quarterly basis, (2) Quarterly money spent on jewelry products of certain type, (3) Holding certain job types, (4) Traveling certain mileage.