How are you measuring marketing’s performance?
If you are like most marketers, you’re proud of all the ways you measure marketing – pageviews, visits, visitors, click-through rates, open rates, bouncebacks, unsubscribes, size/growth of the database, cost per lead, etc. The list is nearly endless. But are you measuring the things that your CEO and CFO care most about: marketing’s contribution to revenue? Is your marketing team respected in the organization for generating new sales-ready leads and building pipeline? Do you work closely with the sales team to understand conversion rates and pipeline velocity? If not, you are Revenude.
Rev-e-nude: The sensation of vulnerability a marketer feels when all the marketing jargon has been stripped away to reveal no real ability to tie the marketing budget to actual revenue.
Here are 5 ways to avoid being in the revenude:
1. Align marketing spend and campaigns to closed deals
When determining marketing effectiveness, you need to understand two things: 1) the campaigns that influenced the closed deals, and 2) the source of the leads that led to those closed deals. Successful marketers measure what matters, not what is easiest to measure. You are never revenude when you understand how your investments lead to revenue. In most organizations, the campaign analytics are in one data silo and the pipeline and closed deal information is in another. Close the loop and tie the two together.
2. Consistency matters
Take a lesson from your CFO and VP of Sales. They present the same charts week after week. The data certainly changes, but the format and the “what” they report never varies. That consistency builds credibility and sets the right expectations. What does Marketing typically present? Well, one week it’s the big trade show, the next week it’s an ad campaign. Sure, you want to show off your team’s latest triumphs. But the most successful marketers effectively communicate what metrics are most important, and then report on them consistently.
3. Get the CFO involved
No, I’m not crazy. The CFO can be your best friend – just ask the CMO who was able to get millions more in spending by working with the CFO to make the case for marketing investments to the CEO. The CFO is the company’s “gold standard” for credibility. Engage with the CFO as you are developing your metrics. What could be better than when the CEO turns to his CFO and asks “What do you think of the marketing budget”, the CFO responds, “I like what I see!” Be open to new ways of thinking.
4. Have the discipline to act on your analysis
The point of marketing measurement is to take action. Don’t be afraid to kill marketing programs that are not working and doubling efforts on those that are. In the land of marketing, all campaigns are not above average. Take action. Each time you act, you are optimizing your marketing investments and improving performance.
5. Benchmark your performance
It’s hard to know how you’re doing if you have nothing to compare it to. The two most important things to benchmark are: 1) conversion rates between stages (inquiry > MQL > SAL >SQL > Won) and 2) the number of days between stages. Be on the lookout for good benchmark data, especially conversion rates. Sirius Decisions has some good data. There are other sources like Marketing Sherpa, Marketing Profs and Eloqua.
Most marketers are on a journey of continuous improvement. No matter where you are on your journey, the destination must include measuring marketing impact on revenue. If you can do that, you will never be revenude again.