It almost goes without saying that every marketing campaign, system, and dollar spent must yield measurable results. An abundance of low-cost tracking tools have enabled marketers to produce a sea of data in the quest for positive outcomes. Yet marketers often struggle to settle on meaningful key performance indicators (KPIs) and extract insights due to the overwhelming nature of modern analytics.

Fortunately Japanese lean principles, pioneered by automakers like Toyota in the 20th century, can be adapted to the marketing function and used to bring structure and focus to performance measurement. These principles emphasize continuous improvement (kaizen), waste reduction, process control and value creation. Although they have traditionally been associated with manufacturing, marketers can utilize them to identify optimization opportunities, catch problems before they get out of control, and know the trends their efforts are producing. 

I started Riviea to help marketers take advantage of this methodology and I’d like to delve into what that looks like for marketing KPI management: 

Define Value at Leading and Lagging Indicators

In lean methodology, value is created as a product or information moves through processing steps. The true test of value is whether a customer is willing to pay for the outcomes of each step. In marketing, value is produced when each touch point in the buying journey resonates with the target audience and moves them further in the path to purchase. Therefore, identifying a KPI that reflects the progress of customers at each touch point helps marketers quantify the value of their efforts. 

For example, when a prospect clicks a link or advertisement, click through rate can be used to measure the value of that touch point. If they go on to fill out a contact form or add a product to their shopping cart, conversion rate may represent the next step in the value chain. Obviously revenue is the desired outcome, but even after a sale has been made, metrics like repeat purchase rate can be used to measure the value of the previous touchpoint. 

Identify and Eliminate Waste (Muda)

Lean principles are known for emphasizing waste reduction in business processes. Marketers can pair KPI tracking with benchmarking and target-setting to quickly identify sources of waste. Since waste can manifest in things such as ineffective channels and campaigns, KPI tracking can show which are failing to produce leads that convert or come at a higher cost in comparison to targets. Thoroughly auditing marketing KPIs will help trim unnecessary expenses or highlight areas needing rework in order to achieve your goals.

Intertwining Kaizen with Marketing

No marketer executes their campaigns or initiatives perfectly. After all, marketing is aimed at influencing a massive variable: human behavior. Nevertheless, lean-based KPI management is intertwined kaizen, which is a Japanese word meaning good change. Kaizen philosophy, which is at the heart of lean methodology, should be applied to establish a culture of experimentation, learning and seeking better results.

KPIs should be leveraged to measure the impact of new strategies and tactics, or to inform optimizations. For example, click through rates could be assessed to understand how compelling ad copy is and identify which ads need to be rewritten versus circulated more often. Similarly, webpage dwell time can be used to improve content, change the UI, or test conversion elements.

Data Visualization for Enhanced Decision Making

KPIs should be visualized in such a way that allows team members at every level of the organization know exactly where a given process stands relative to its targets in a matter of seconds. Color-coded dashboards that display these metrics make it easy to spot trends and the scale of problems before they become too difficult to counteract. Once these dashboards are in place, marketing teams should review them on a daily or weekly basis to discuss and plan optimizations and countermeasures as a group.

Standardized Processes for Consistency

Standardization is a key tenet of lean methodolog and is aimed at reducing variation to achieve a consistent quality. When applied to marketing, standardization should have a positive impact on KPIs. Clear guidelines, templates, and documented workflows help minimize the errors that negatively impact performance. Furthermore, lean principles call for standardized analysis and reporting of KPIs so that teams can effectively utilize them to drive improvements and achieve goals. 

Embracing Gemba Walks for Greater Insight 

Gemba, a Japanese term meaning “the real place,” refers to the practice of going to the place where KPIs are generated (or supposed to be) to gain insights and solve problems. When applied to marketing, regular Gemba walks are used to observe firsthand how marketing initiatives are executed and how they impact performance. Often this means cycling through the steps that go into building a campaign including content creation, channel execution and customer experience management. When marketers immerse themselves in the end-to-end steps a customer experiences, they often uncover hidden opportunities and inefficiencies.

Ultimately, Japanese lean principles offer incredible value in the realm of marketing KPI management. This systematic approach to value creation and waste reduction ensures that optimization efforts as well as the day-to-day operations of a marketing team remain a reliable source of value for customers and the organization alike. 

Riviea helps organizations adopt or apply Japanese lean principles to their commercial efforts. If you’re interested in having a discussion about what this looks like for your business, get in touch with us today!