Performance management system
A process used to evaluate and improve the efficiency and effectiveness of an organisation and its processes.
Performance measurement system
The process by which metrics are defined, collected, disseminated and actioned.
To improve results for any aspect of any business, performance management is vital. As Bob Napier, Chief Information Office, Hewlett-Packard was reported to have said back in the 1960s,
You can't manage what you can't measure.
The processes and systems intended to monitor and improve the performance of an organisation and specific management activities such as Internet marketing are widely known as 'performance management systems' and are based on the study of performance measurement systems.
Many organisations now have an established online presence, but there are many unanswered questions about the process by which the marketing performance of this presence is evaluated and how it is modified with a view to improving its performance. Adams et al. (2000), for example, asked managers to name their priorities for improvements to e-business performance measurement systems. Results differed for different types of organisation, reflecting the stage of evolution in their measurement. For bricks-and-mortar
Design for analysis (DFA)
The required measures from a site are considered during design to better understand the audience of a site and their decision points.
Internet marketing metrics
Measures that indicate the effectiveness of Internet marketing activities in meeting customer, business and marketing objectives.
companies, developing or introducing a more comprehensive measurement system and enhancing analysis capabilities to establish what really drives business performance was most important. For clicks-and-mortar, integrating new systems with legacy systems and benchmarking against best practice were most important. Finally, dot-coms, as start-ups, were concerned with improving clickstream analysis and customer tracking and profiling and improving the entire company's performance measurement system.
Although we have stated that measurement is an important part of maintaining a web site, it is worth noting that the reality is that measurement is often neglected when a web site is first created. Measurement is often highlighted as an issue once the first version of a site has been 'up and running' for a few months, and employees start to ask questions such as 'How many customers are visiting our site, how many sales are we achieving as a result of our site and how can we improve the site to achieve a return on investment?' The consequence of this is that performance measurement is something that is often built into an online presence retrospectively. Of course, it is preferable if measurement is built into site management from the start since then a more accurate approach can be developed and it is more readily possible to apply a technique known as 'design for analysis' (DFA). Here, the site is designed so companies can better understand the types of audience and their decision points. For example, for Dell (www.dell.com). the primary navigation on the home page is by business type. This is a simple example of DFA since it enables Dell to estimate the proportion of different audiences to their site and, at the same time, connect them with relevant content. Other examples of DFA include:
• Breaking up a long page or form into different parts, so you can see which parts people are interested in.
• A URL policy (see Chapter 8) used to recommend entry pages for printed material.
• Group content by audience type or buying decision and setting up content groups of related content within web analytics systems.
• Measure attrition at different points in a customer journey, e.g. exit points on a five-page buying cycle.
• A single exit page to linked sites.
In this section, we will review approaches to performance management by examining three key elements of an Internet marketing measurement system. These are, first, the process for improvement, secondly, the measurement framework which specifies groups of relevant Internet marketing metrics and, finally, an assessment of the suitability of tools and techniques for collecting, analysing, disseminating and actioning results. We will review four stages of creating and implementing a performance management system.
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