ProServe Tech Times Bi-Monthly Newsletter ISSUE 02 OCT/NOV 2014 this issue Measuring Your Marketing P.2 Finding the Right Data P.3 Network KPI’s P.4 Upcoming Events P.5 Message From the President Back from an incredible trip to Inforum ProServe’s President Julie Zindle Writes an open letter to our customers: Read It Here: Letter to our Customers Marketing Analytics P.2 Fostering REAL Business Intelligence Whether by owner’s intuition, or by structured processes, measurements are a crucial part of maintaining and growing a successful business. What is measured and how the measurements are communicated are major drivers in establishing company culture and results. Author Michael LeBouef is credited with the much quoted mantra, “The things that get measured are the things that get done.” He also expanded this statement to “the things that get measured and REWARDED are the things that get done WELL.” Businesses spend lots of money trying to attract new customers. But how do you know if all of your time and effort are paying off? Learn about the best ways to measure the success of your marketing. What are the Key Indicators for a successful marketing plan? In this issue of our newsletter we provide an opportunity for you to review a few measurement concepts to apply to your business. Although there are many definitions and reference names for Key Performance Indicators (KPI), Creating the Right KPI’s P.3 R. John Rehr states; “Key Performance indicators are quantifiable measurements, agreed to beforehand that reflect the critical success factors of an organization. They will differ depending on the organization.” This definition supports the concept that measurements need to be consistent (agreed to beforehand) and predictive (reflect critical success factors). Getting access to KPI’s is the easy part. There are a plethora of “analytic” tools available in the market, all contributing to our “dashboard overload.” The hard part, and of course the most important, is sorting through the “big data” and mining the information that can drive change and results for your organization. With the help of the right tools and our professional micro-vertical expertise, ProServe Solutions is the perfect partner to help you foster REAL business intelligence! A quick search on the internet for KPI tools will bring back an astounding number of results. The dashboard mania that has hit the technology industry makes it simple to have standard KPI’s at your fingertips. But are they the right KPI’s? Once you have the indicators how do we drive change in our performance? Beyond Sales: The Business KPI's of Marketing ROI Newman, Daniel. Beyond Sales: The Business KPI's of Marketing ROI Forbes. Retrieved September 30, 2014, from http://www.forbes.com/sites/nielnewman/2014/06/24/beyondBy this point we all know that at the end of the day the top priority of marketing should be to create customers for the business– whatever the business may be. As a marketer, you live in a world that is adding channels on seemingly a daily basis, while at the same time the consumers’ attention are being drawn in a hundred different directions making it increasingly difficult for any brand (especially those without an endless budget) to stand out. In the end the mission is sales, well at least that is the myth, but I think we would all agree that when we invest in marketing we seek a return. More times than not those upstairs that write the checks and control the budget want marketing to drive more sales. But in a world of short attention spans and unprecedented options are there key performance indicators (KPI’s) that should be attached to marketing and social media efforts that span beyond just customer acquisition and sales? The short answer is yes, there are, and while these new KPI’s should, by no means, replace the onus on marketers to create customers and revenue, they do measure different aspects of a business that are equally, if not more important, for long term performance than their traditional counterparts. In the vastly evolving landscape of marketing, the new KPI’s must also reflect the following:      Customer Retention: How successful are we in keeping customers and building repeat business? Customer Satisfaction: Are our customers happy? How well are we doing in getting them to share their satisfaction to build word of mouth? Product Improvements/Optimization: Is our community driving ideas to help us innovate? Whether products or services, do we have our finger on the pulse and how much are our customers helping us accomplish this? Employee Productivity: Does the company adequately equip and empower employees to succeed? customer satisfaction. For instance, Zappos, from their earliest days, have set out to build the ultimate customer experience. With almost a “Never-say-no-to-a-reasonable (or unreasonable) customer demand,” their customer experience teams will do whatever it takes to maintain a happy customer. I suppose a marketer may say that is a customer service expense, but I would beg to differ. When an unhappy customers’ situation is flipped on its head by a small expense approved by an empowered customer service professional what you have is an investment in your customer; to create and keep them, and that is without a doubt a marketing investment. Furthermore, the cost of replacing a customer is 6x the cost of retention, so why wouldn’t we want to keep our customers happy? Another great example is the way companies such as Dell and Starbucks use online communities to drive product development and innovation. While one company is a technology company and the other is a beverage company, both have invested substantially in building their brand evangelists by making their most loyal customers ideas and input feel welcome and sometimes even utilized in their product optimization. While Steve Jobs may have been known for never putting his ear to the street and just “knowing” what his customers want, he was the exception and not the rule. Companies that can find ways to listen and adapt to their customer feedback can build a new type of loyalty that translates into dollar returns. The challenge again is how do you attribute that to a campaign? Is it even possible? Where Marketing ROI Is Heading? In the future Marketing ROI will have to spread its wings to move beyond just customer creation and measurable dollar value returns. However, I want to be clear when I say that doesn’t mean those activities aren’t important, because they are. Employee Retention: Are we creating a brand that employees are proud of and a place of work where they can grow personally and professionally? Happier Customers, Better Products, Satisfied Employees The creation and continued evolution of metrics that measure the baseline value of more satisfied customers, the involvement of a brand’s community in product development and the investment in more satisfied employees will all become anchor points in the process of building a marketing strategy. The business of the future should not simply measure their marketing by the dollar value returns that it creates. If you look at the numerous studies that have shown the value of a satisfied customer or the return on stronger employee morale, you would have to be crazy to dismiss these items when determining the success of a marketing program. Perhaps the biggest difference will be the way will be the way smarter businesses big and small will apply the new marketing KPI’s to enhance their marketing 24/7/365 rather than placing a hyperawareness on the peaks and valleys created by a traditional marketing strategy, which is dependent on campaigns that do little to build loyalty within the brands’ stakeholders. The challenge that remains is how, or perhaps if it is possible to measure the direct value of investing in Pro Business Intelligence The Pro Business Intelligence (Pro BI) solution takes data collected and stored in your ERP and turns it into meaningful information that you can use in your daily activities. With information in accessible reports and analysis, you can make better and more timely business decisions. It gives you the means to understand the "why" behind your business performance. Pro BI delivers an affordable and fully integrated set of business intelligence capabilities so you can perform your own multidimensional analysis, create reports and easily share the results to make better decisions. Novice to advanced users across your company can explore large volumes of summarized data in seconds. Business Intelligence in All Areas • Accounts Receivable History • Customer Returns • General Ledger Details • Inventory Adjustments • Inventory Turns • Quotes • Inventory Value & Aging • New Customer Accounts • Open Accounts Payable • Open Accounts Receivable • Open Purchase Orders • Open Sales Orders • Purchase Order History • Sales Analysis • Sales Order Booking Are Your Performance Indicators Driving Results? Is what you are measuring now working? Could there be better indicators to predict business success? Take a few minutes now and consider your measurements. Think about what you are measuring and how that is communicated. ProServe customers vary greatly in their general practices for measurement methods in depth and detail. In this article we will explore concepts presented by distribution expert, Grant W. Howard, GWCO, and in addition list a few basic scorecard measurements applicable across all industries. Grant W. Howard presents analyzing by using three groupings: Approach, Capabilities, and Breadth/ Depth. Approach:      Dashboard KPI’s Metrics Scorecards Report Cards Capabilities:      Goal Seeking/Management by Objective Exceptional Reporting/Management by Exception Summary, Detail, Drill Down Performance Drivers By Rank, By Category, By… Breadth and Depth:  Warehouse, Segments, Customer, Vendor, Product, Employee      Sales, Gross, Costs, Net  Quadrants Improvement, Reduction, Year to Year Service, On-Time, Accuracy, Defections Understanding the big picture from the strategic plan, management’s objectives/priorities, and/or the team’s desired results will help establish what to measure. Grant W. Howard recommends the following steps: 1. 2. 3. 4. 5. 6. 7. Management, Objectives, Team Plan. Execute. Measure. Standard and Correct Formula Review Data Benchmark in the Industry Take Action (compliance, maintain, improve) – Drive Results Plan. Execute. Measure. The essential components are accuracy, consistency, and efficiency (ACE). Howard goes on to describe that if you plan and execute you will get performance, when you plan, execute, and measure you end up with results. The Financial reports will provide critical measurements such as Sales, Cost of Goods Sold, Gross Margin, Cost/Expenses, Net Income, Assets, Liabilities, Net Worth, Asset Turnover, Return on Assets, Owners Equity, Financial Leverage, and Return on Net Worth. Longevity can be maintained by using measurements such as Customer Experience consisting of Fill Rate, On Time Delivery, Accuracy, Issue Resolution, Fair Pricing, and % of Lost Sales/COGS; Vendor Performance consisting of Fill Rate, On Time Delivery, Accuracy, Issue Resolution, Pricing Accuracy, and Lead time variance; Employee Productivity consisting of Sales per Employee, Gross Margin per Employee, Payroll per Employee, and Personnel Productivity Ratios; and lastly with Owner Happiness consisting of measures such as Return on Equity in Net Profit, Return on Assets, Net Worth/Financial Leverage, and Growth Potential and Realization. Growth Factors Immediate Goals, Long Term Goals, Industry Standard Growth can be measured in both new and existing customer growth with customer segments, products and offerings. Key Performance Indicators for growth include Growth Potential Index, Cash Cycle (Days), Cash to Current Liabilities, Defensive Interval (Days) and Sales to Working Capital. The overall idea behind Grant Howard’s teaching, and many other experts in the industry, is that just looking at KPI’s is not enough. Creating the right KPI’s and having a plan of action behind each is the key to allow you to drive business results based on the information you are viewing. Microsoft’s Balanced Scorecard General Business Practices for Measuring: Financial Metrics:   Sales Growth by Segment        Customer or Product Profitability % of Revenue from new Products, Services, or Customers % of Unprofitable customers Revenue per Employee Cost Reduction Working Capital Ratio Asset Utilization throughput Economic Value Added Customer Metrics:   Market Share by Dollars and Units     Customer Acquisition % of Key Customers within Target Market Customer Retention Customer Profitability Customer Satisfaction Operations Metrics:       Product and Service Quality Labor Efficiency Purchase Price Variance Reduction Process cycle time Process Cost reduction Post Sale Service Learning and Growing  Employee Turnover, Annual, Voluntary, Key Personnel %    Employee Satisfaction Employee Productivity Training Budget/Expenditure per Employee Monitoring You Network Performance Indicators ProServe Solutions is proud to be a partner of Spiceworks. it’s easy to get the alerts you want when you need them! Spiceworks is the industry leading Network monitoring tool. Free to download and use, Spiceworks can be configured to measure every important Network KPI to help determine what can be done to optimize your network and reduce your risk of security breaches and device failures. Monitor Everything on Your Network Monitor & Manage Email Keep track of everything that’s happening on your network – from when a user installs a piece of software they shouldn’t have, to when your printer’s toner level gets low! Spiceworks lets you monitor and receive alerts on all the network happenings you care about most! From the message load on your Exchange server to the size of your users’ inboxes – Spiceworks provides a thorough overview that’ll keep you in step with your email health and usage. You can even monitor, add and edit Rackspace hosted email accounts right from Spiceworks! Analyze Bandwidth Usage Curious as to how much bandwidth a device or router has been using? Spiceworks lets you quickly access charts for all of your network interfaces – so you’ll know in a snap what’s consuming all your bandwidth! Real-Time Windows Performance Monitoring Get real-time performance monitoring of all of your Windows devices - from overall health to performance counters like disk and processor queue lengths. Create Custom Monitors in Seconds Easily set monitors for anything you like – from how much disc space a device has left to whether or not a server is online. If Spiceworks collects info on it, you can monitor it! Is your website working for you? Google Analytics is a powerful Free website analytic tool that can help your business determine the effectiveness of your website. Using the information provided by Google Analytics, ProServe can help recommend changes to your website that will drive the exposure you are looking for! Google Analytics features include: The Alerts You Want When & Where You Want Them Whether you need to see a chart or graph of your overall network state; a detailed alert specific to a single device; or would like to receive an email the next time a user downloads a specific application – • Data visualization tools including a dashboard, scorecards and motion charts, which display changes in data over time. • Segmentation for analysis of subsets, such as conversions. • Custom reports. • Email-based sharing and communication. • Integration with other Google products, such as AdWords, Public Data Explorer and Website Optimizer. Professional Development The FACTS User Group Every other month the FACTS User Group holds a meeting to discuss different topics chosen by the members. The idea is to share information and business practices with other users, to increase the effectiveness of the FACTS product. Upcoming Events FACTS User Group Date: October 16th, 2014 Topic: Credit and Service Hold, Open Order Review Time: 9:00—10:30 AM (EST) Location: ProServe Solutions, 2402 North Forest Rd. Getzville, NY 14068 Or GoToMeeting Online Summary of Last Meeting: Using Notes in FACTS At the end of each session we reserve time so that the attendees may ask any questions they might have to the ProServe FACTS expert attending that meeting. This is an opportunity for FREE training! ProServe Tech Times ISSUE 02 OCT/NOV 2014 What If You Could Wednesday Date: Novemeber12th, 2014 Topic: What if you could produce REAL business Intelligence Time: 12:00 PM (EST) Location: GoToMeeting Online Summary of Last Meeting: What if you could feel secure about your data including security setting option review in your ERP, Network, Hardware, and Back Up Link to Last Meeting Recording: Click Here ProServe Solutions, LLC 2402 N. Forest Rd Getzville NY 14068 716.635.5080 ph 716.635.5099 fax www.proserve-solutions.com