Over the next 40 minutes or so, my goal is to show you how to earn your own seat at the revenue table. I’ll also illustrate all these points using many of Marketo’s the actual metrics
Topics:
To begin, do you know what profits a 10% increase in your marketing budget would generate?
According to the Lenskold Group’, the most common answer to this question is “I Don’t Know.”
Forty-four percent of marketers have no idea what a budget increase could do for their companies.
If you fit into this 44%, you’ll experience difficulty protecting your budget and will likely find yourself asking the question the other way around: “What will happen now that my budget has been decreased by 10%?”
You can’t expect your organization to place value on something you’re unable to quantify. But when you do use the right metrics and processes, there is nothing more powerful to help marketing earn it’s rightful seat at the revenue table.
That’s why the Definitive Guide delivers the strategies and methodologies you’ll need to measure and improve ROI. So let’s dive in.
To begin, what are the WRONG metrics?
Vanity metrics
Too often, marketers rely on “feel good” measurements to justify their marketing spend. Instead of pursuing metrics that measure business outcomes and improve marketing performance and profitability, they opt for metrics that sound good and impress people. Some common examples include press release impressions, Facebook “Likes”, and names gathered at tradeshows.
True story – 38K twitter followers. Value?
400 people attended Revenue Rockstar…. OK… better is 400 people attended, X customers, y prospects. Based on this, we expect to create $1.1M ppipeline and influence / accelerate $YY more.
Measuring Activity, not Results = Focusing on quantity, not quality
Marketing activity is easy to see and measure (costs going out the door), but Marketing results are hard to measure. In contrast, Sales activity is hard to measure, but Sales results (revenue coming in) are easy to measure. Is it any wonder, then, that Sales tends to get the credit for revenue, but Marketing is perceived as a cost center?
Results convince finance and senior management that Marketing delivers quantifiable value. Activity metrics are likely to produce questions from the CFO and other financially-oriented executives; they are no defense against efforts to prune your budget in difficult times.
Cost metrics
The worst kinds of metrics to use are “cost metrics” because they frame Marketing as cost center. If you only talk about cost and budgets, then no doubt others will associate your activities with cost.
As an example, let’s take a marketer who improved cost per lead by $10. Based on these great results, he went to the CEO to ask for budget. Did the marketer get his budget?
No. The CEO decided the reduced lead cost meant marketing could deliver the same results with fewer dollars – and so she cut the marketing budget and used the extra funds to hire new sales people.
What went wrong here? The marketer performed well, but he made the mistake of not connecting his marketing results to bottom-line metrics that mattered to the CEO. By framing his results in terms of costs, he perpetuated the perception that marketing is a cost center. Within this context, it’s only natural that the CEO would reduce costs and reallocate the extra budget to a “revenue generating” department such as sales.
With this change, marketing has the opportunity to seize the day and take a much larger share of revenue – since Marketing is responsible for that 70%. Requires Marketing to think as rigorously about their process as Sales typically thinks about their.
Here’s Marketo’s…. Let me explain.
Model
Note Success Path and Detours; Inventory and SLAs
Model
Note Success Path and Detours; Inventory and SLAs
We get this report, which is like Google Analytics for revenue. For each of those stages I can see how many people are in there, and what is the flow from stage to stage, as well as the velocity at which people are moving between them. Conversion rates and velocities.
And I can see this over time so we can understand the trends, and even compare them to previous periods.
Having this data at your fingertips is so powerful for a marketer, because it really lets us understand the dynamics of the revenue process.
We know because we mapped the same pipeline we just saw in our product. This is the revenue cycle modeler in Marketo, and the stages across the green section represent the funnel stages we looked at before, so you see targets, leads and opportunities. Some stages are boxes because people can stay in those stages indefinitely, some are clocks, meaning there are SLA’s. Once this is setup and it begins tracking movement.
Let’s talk about measuring what the CXO cares about..
While you may not be doing all this analysis now, you most likely will in their future. [Be sure to focus on this point a lot so you don’t lose them.]
ROI:
First investment – then revenue
Measure ROI to find not just what works, but what works better
Establish goals upfront
Make sure programs are measureable
Focus on decisions that improve ROI
Explain
We create a ton of content… go to marketo.com/resources
Step 1: Important to track all touches
Step 1: Important to track all touches
Here we see what works for Marketo (over the last 12)
58% of pipeline from Inbound activities
Here we see what works for Marketo (over the last 12)
58% of pipeline from Inbound activities
Here we see what works for Marketo (over the last 12)
58% of pipeline from Inbound activities
Here we see what works for Marketo (over the last 12)
58% of pipeline from Inbound activities