Jon Miller - Marketing ROI: Building Marketing Credibility with CEO-Worthy Metrics
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Sales Acceleration Summit - This session is now available on demand: http://www.insidesales.com/events/2014/sales-acceleration-summit/jon-miller Session Overview In today's marketing world, the stand-out CMOs are the ones who behave like the CEO, the ones who adopt the CEO's holistic, dashboard view of the company. Being able to "talk the talk" — speaking the business language of revenue, profit, and cash — is an increasingly important skill set for CMOs. But taking that one step further — "walking the walk" to the revenue table — is even more crucial. To do that, you have to embrace analytics and understand why they matter. In this session, learn how to harness those invaluable nuggets of data and leverage the metrics that matter to prove and improve your marketing ROI.
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Jon Miller - Marketing ROI: Building Marketing Credibility with CEO-Worthy Metrics
- 2. #SalesSummit | @jonmiller Marketing ROI: Building Marketing Credibility with CEO-Worthy Metrics
- 6. #SalesSummit | @jonmiller 12% 20% 15% 9% 44% Improve profits by more than 20% Improve profits by 10% to 20% Improve profits up to 10% No major change in profits generated Don't Know What Profits Can Be Generated With 10% More Budget? #1 Answer: Don’t Know Source: 2010 Lenskold Group / emedia Lead Generation Marketing ROI Study
- 7. #SalesSummit | @jonmiller When Metrics Take Away Credibility Vanity Metrics Sound good and impress people, but don’t measure impact on revenue or profitability Activity Metrics Measure what you do instead of what results and impact you have
- 8. #SalesSummit | @jonmiller When Metrics Take Away Credibility Cost Metrics Frame marketing in terms of cost and spending instead of results and outcomes
- 10. #SalesSummit | @jonmiller Name Awareness Friend Engaged TargetTOFU MOFU Opportunity Customer Lead Sales Lead Nurturing Database BOFU
- 11. #SalesSummit | @jonmiller Revenue Cycle Modeler Screenshot: Marketo Revenue Cycle Analytics
- 12. #SalesSummit | @jonmiller Filter/Drill into data, e.g. by Program Type, Business Unit, Geography, etc. Key topic areas: • Balance (Reach) • Flow • Conversion • Velocity Trends over time Screenshot: Marketo Revenue Cycle Analytics
- 13. #SalesSummit | @jonmiller Get the “Definitive Guide to Marketing Metrics & ROI” marketo.com/DG2MM
- 15. #SalesSummit | @jonmiller Why Measuring Return is Hard • Multiple touches. Seven touches needed to convert a cold lead into a sale • Multiple influencers. Typical buying committee has 5-21 people
- 16. #SalesSummit | @jonmiller Track All Touches Across People Screenshot: Marketo Revenue Cycle Analytics
- 17. #SalesSummit | @jonmiller Source: Marketo Revenue Cycle Analytics, Nov 2013 * Percentage of all programs in channel that achieve MT Ratio > 5 % Above Min* 89% 41% 75% 57% 66%10.4 73% 67% 76%
- 18. #SalesSummit | @jonmiller Source: Marketo Revenue Cycle Analytics, Nov 2013 * Percentage of all programs in channel that achieve MT Ratio > 5 % Above Min* 89% 41% 75% 57% 66%10.4 73% 67% 76% (MT) Ratio = Pipeline / Investment >10 is Great and <5 is Fail Webinar = 54!, Tradeshow = 6.9, Sponsored Email = 3.8, Content Syndication = 9.6
- 19. #SalesSummit | @jonmiller Source: Marketo Revenue Cycle Analytics, Nov 2013 * Percentage of all programs in channel that achieve MT Ratio > 5 % Above Min* 89% 41% 75% 57% 66%10.4 73% 67% 76%% Programs with MT Ratio > 5 e.g. Content Syndication has good average but 43% programs “fail”
- 20. #SalesSummit | @jonmiller Tweetable Takeaways 1. Marketing activity it easy to track, but marketing impact is hard to demonstrate – Sales is opposite 2. Focus on financial metrics that matter to the CEO and other executives (profit, cash, revenue) 3. Avoid cost and spend metrics – focus on investment and return 4. A trusted marketing forecast is the single most important step to make marketing a revenue driver, not a cost center 5. Multi-touch attribution gives more insight into the full funnel @jonmiller
Notas del editor
- 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 metricsToo 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 qualityMarketing 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 metricsThe 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.
- Many marketers are perceived as a cost center. 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.Here I show you how Marketo does it.
- 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.
- ModelNote Success Path and Detours; Inventory and SLAs
- Google Analytics for Revenue
- 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 revenueMeasure ROI to find not just what works, but what works betterEstablish goals upfrontMake sure programs are measureableFocus on decisions that improve ROI
- Step 1: Important to track all touches
- Here we see what works for Marketo (over the last 12)58% of pipeline from Inbound activities