Author: Glen Gow
Too often marketers talk about activities instead of outcomes—for example, how many campaigns they ran, how many trade shows they participated in, how many new names they added to the lead database. These are metrics that reinforce the perception that marketing is a cost center, not a revenue driver.
To change that perception, marketers need to start talking about how their programs impact the whole sales process, with revenue being the core focus.
Instead of seeing marketing activities in isolation, marketers need an end-to-end view of buyer engagement. It’s not about the first “touch” that brings a prospect into the sales funnel, or the last “touch” before signing a deal. It’s about tracking all the touch points at which a prospect connects with your marketing programs, and measuring those multi-touch impacts.
So how do you do it? Here are four marketing analytics for demonstrating marketing’s ability to drive revenue:
- Flow: Where are prospects connecting with your marketing programs?
- Balance: How many prospects are in each stage of the sales funnel?
- Conversion: What’s the ratio of movement from stage to stage?
- Velocity: What’s the rate of movement from stage to stage?
By tracking these metrics and mapping them to your programs, you gain the quantitative data that shows marketing ROI. Let’s dive in deeper:
1. Flow: The Value of Every Touch Point
Too often marketers measure the flow of leads as simply adding new names to the database. But that misses the value of subsequent connections with that person or company.
For example, someone first connects with your company through a webinar and then visits you at a conference. Each step of the way, you can track their engagement with your company. Do they return to your website? Do they download a white paper? The earlier you can dig into that engagement, the more insight you have into the process that moves a lead to a buyer.
Measuring marketing impact starts with capturing all those interactions—or multi-touches—across people and accounts. Then you can see how many prospects entered each stage of the sales pipeline in a given period and whether those numbers are trending up or down. Armed with this insight, you can allocate value to those individual interactions for a more revenue-driven picture of marketing programs.
2. Balance: The Landmarks on the Revenue Map
Sales organizations—especially in businesses that have long sales cycles—break the sales cycle into discrete stages. And they track how deals move through those stages, so they know their conversion rates. They know if they have X prospects in the pipeline, they’ll convert Y percent to revenue, and how long it takes to do that.
Marketers need to measure in the same way. Call it the revenue cycle. It tracks prospects from being anonymous to being known, to being engaged, to being qualified, to being a marketing generated lead, to being a sales qualified lead, to being a sales opportunity, to being a customer. Knowing how many contacts or accounts are in each stage provides insight into which types of marketing programs will have the most impact in the short-term.
3. Conversion: The Journey from Lead to Sale
The next step is measuring the percentage of prospects moving between stages. You gain a clear picture (rather than a gut feeling) of which types of leads have the best conversion rates. For example, by company size, lead source, channel, geographic areas, specific business units, or product lines.
Tracking the movement is key. Taken in isolation, some marketing programs are immediate winners, while others may look like losers at the start. But some of those losers could be extremely influential further down the sales funnel. Once you track that waterfall of conversion from stage to stage, you can make a science of understanding each of those steps and understand how much budget you’re going to need in order to achieve certain outcomes.
Knowing where you get the most “bang” for your marketing investment gives you leverage to improve the ROI and show a direct impact on sales and revenue. If you can track prospects moving to the next stage because of a certain program, you’re more able to predict future behavior and assess the revenue that a program will ultimately generate. This gives you a solid basis for making the most productive marketing investments.
4. Velocity: The Calculus of Revenue
Finally, you need to track how quickly each type of lead is moving from stage to stage through the sales funnel. While your company probably knows the average time from identifying a lead to closing the sale, marketers need to know the rate at which leads move through each stage of the funnel to become a sale.
Tracking the velocity between stages highlights opportunities for investing marketing resources to most effectively reduce time-to-revenue. It also makes sales and revenue forecasts more reliable, because you can combine that velocity knowledge with information about how many prospects are in each stage. Further, you can see places in the process where sales may be stalling and, by digging deeper into the data, target programs to those specific points.
The Bottom Line
Once you start tracking these marketing analytics—flow, balance, conversion, and velocity—you can really start looking at ROI on multiple levels, from marketing programs, to marketing channels, to business units. And you can track a variety of metadata about different programs, such as event locations, types of events, attendance mix, and even event agendas. Then you can correlate this to movement through the sales funnel.
But the benefits don’t stop there! Here’s what else you can do:
- You can slice and dice the data to create a sharp picture of what the overall mix of investments to drive your business looks like.
- You can also begin correlating marketing programs to other sales metrics like average selling price and how long it takes new sales reps to become productive.
- You can pinpoint the impact of marketing investments on sales effectiveness and productivity.
The bottom line is that you’re no longer talking about cost—you’re now talking about revenue. You’re demonstrating that marketing is an investment that delivers value over time, and you can articulate exactly how much value. And that’s language your CEO definitely wants to hear!
4 Marketing Analytics That Matter for Driving Higher Revenue was posted at Marketo Marketing Blog - Best Practices and Thought Leadership. | http://blog.marketo.com
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