Supporting Our Financial Objectives

Some time ago Kaplan and Norton developed an interesting tool for measuring business success that wasn’t just focused on the financial targets. It could be argued - well what else is important, but that tends to be very short sighted. An example would be - why don’t we cut back on marketing spend. The accountants argue that this is just a cost anyway.

If we cut back on marketing it does indeed boost profits as the money that was being spent on monitoring and communicating with our customers can now be used elsewhere. However there is a longer term cost. We are reducing our understanding of the market and potentially eroding the relationships we have built up over a sustained period of marketing activity. The future result is, we find our customers no longer want our products and services as the market has moved on. The loyalty and relationships are no longer being maintained with regular communications.

So what do we do? Next we will start to look at how other activities can support our financial objectives.