CAMBRIDGE, Mass. -- A Forrester Research survey of 24 financial service e-business executives found that most of them know what says success in their business but that most aren't using the right tools to prove they're hitting the mark.

"The results from Forrester's survey show that most e-business executives know the right metrics to use to measure their success, but few are able to measure them--and those who do measure them don't always measure them effectively," said author Brad Strothkamp.

Strothkamp based that conclusion on a survey of U.S., Canadian and British bank executives who belong to the Cambridge-based think firm's Channel and Product Management Research Panel.

According to the survey, while financial services companies' most important goals may be cost savings, sales ranked most important for the e-business executive.

According to the Forrester survey, three out of four means used by financial service companies to measure the value of an online channel are sales related; 19 out of the 24 surveyed found incremental sales important, trailed by 17 saying attaining new customers; and 17 cited cross-selling and up selling current costumers.

The survey also found that cost to serve is not nearly as important as it was in the past, especially when it came to justifying the early investments in online banking technology.

"Reduction in cost to serve ranked below sales-related goals and retention in our list of ways e-business executives derive value from the online channel," Strothkamp said.

Brand awareness and public relations ranked last in importance to this group of senior manager. Only 12 of the 24 surveyed found that these were important measures of value.

The study also found that locating the right tools for measuring goal attainment is difficult.

"The metrics that today's execs draw upon to run their business are limited in scope and of little value when it comes to making better decisions," Strothkamp said.

The most easily available metrics e-businesses can use are site traffic, online service enrollments and the number of self-service transactions. However, these measurements do not really expose how efficiently a Web site is facilitating meeting sales goals, which is the objective most executives surveyed to their businesses, Strothkamp said.

The most important measures to e-businesses--customer retention and sales--are most often the least measured metrics used by the businesses, with only 10 out of the 24 surveyed using those criteria to measure their attempts. However, 14 out of the 24 surveyed use site traffic to determine the success of their Web sites, rather than higher-value metrics, Strothkamp said.

"You need metrics to justify your business cases, but you need business cases to justify investing in metrics," the Forrester analyst said. "If e-business executives are ever going to make their mark, they must make metrics as much of a priority as they would a piece of functionality or a Web site redesign."

He urged that e-business managers make securing measurements of metrics one of their top priorities in the year ahead. Even though finding adequate metrics to measure success of a Web site, such as application completion rates, will realistically take two to three years, savvy executives will use intelligent metrics to measure success correctly before then, Strothkamp said.

Examples he cited in the financial services arena include the much-cited studies that Bank of America and Wells Fargo have done on success in online banking.

"To help achieve their measurement goals, e-business executives will bring in technology like Web analytics to understand Web shoppers' behavior, they will challenge their vendors to justify the benefits of their services with metrics that map to their e-business success, and they will look to firms like OpinionLab to add customer insights to the mix," Strothkamp said.

--mrapport@cutimes.com

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Report: E-Business Banking Execs Know What to Measure, but Methods Elusive

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