Applying the Balanced Scorecard to E-marketing
Metrics for the Customer Perspective:
The most important of these metrics measure customer loyalty and lifetime value. However, many other metrics can help a firm optimize customer value: for example, customer perceptions of product value, appropriateness of selected targets, and customer buying patterns. As an example, Exhibit 1 displays several possible measures for some customer goals of an e‑business firm.
| Customer Perspective | |
| Example Goals | Possible Measures |
| Build awareness of a new Web site service | i) Number of visitors to the site |
| Position firm as high tech | i) Survey target attitudes |
| High customer satisfaction with Web site | i) Number of visits and activity |
| High customer satisfaction with value of online purchasing | i) Number of complaints (e-mail, phone) ii) Number of abandoned shopping carts iii)Sales of online versus offline for same Products |
| Build customer relationships | i) Number of purchases per customer over time (using cookie data) i) Customer retention percentage |
Exhibit –2: Customer Perspective Scorecard for E‑Marketing
Metrics for the Internal Perspective:
The internal perspective is critical to a successful e‑marketing. Many goals in this perspective affect human resources, information technology, and other areas that directly and indirectly affect marketing. The following example shows the goals and measures in the internal perspective.
| Internal Perspective | |
| Example Goals | Possible Measures |
| Quality online technical help | i) Amount of time to answer customer e-mail ii) Number of problems covered by Web site FAQ iii) Customer follow up survey |
| Quick product cycle time | i) Number of days to make the product |
| Optimized number of customer service reps responding to online help | i) Number of inquiries to customer service rep ratio |
| Superior Web site content management | i) Number of updates per week ii) Web site log traffic pattern statistics |
| High supplier satisfaction | i) Supplier profits from our firm’s orders. |
Exhibit—3: Internal Perspective Scorecard for E‑Business Firm
Metrics for the Innovation and Learning perspective:
The innovation and learning perspective typically considers two issues—Customer relationship management (CRM) and sales conversions.
| Innovation and Learning Perspective | |
| Example Goals | Possible Measures |
| Online service innovation
| i) Number of new service features not offered by competitive offerings ii) Percent of sales from new services |
| Continuous improvement in CRM system | i) Number of employee suggestions ii) Number/type of improvements over time |
| High Internet lead to sales conversion | i) Number of conversions from online leads |
| Successful penetration of new markets
| i) Percentage of the firm’s sales in each new market |
Exhibit—4: Innovation and Learning Scorecard for E‑Business Firm
Metrics for the Financial Perspective:
Two of the most frequently used metrics are profits and return on investment. The financial perspective scorecard relies heavily on sales, profit, and return figures. The following exhibit presents some common performance metrics used by marketers.
| Financial Perspective | |
| Example Goals | Possible Measures |
| Increase market share for online products | i) Market share percentage (firm’s sales as percentage of industry sales) |
| Lower customer acquisition costs (CAC) in online channel | i) CAC (costs for advertising, etc. divided by number of customers) |
| Increase conversion rates at Web site
| i) Number of orders divided by number of visitors to site |
| Increase individual customer profit
| i) Average order value ii) Profit contribution over time less CAC |
Exhibit –5: Financial Perspective Scorecard for E‑Business Firm
