Definitive guide-to-marketing-metrics-marketing-analytics


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With a dashboard of marketing metrics and analytics, B2B marketers can measure marketing's link to revenues and profits.

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Definitive guide-to-marketing-metrics-marketing-analytics

  1. 1. The
  2. 2.        ©  2011  Marketo,  Inc.  All  rights  reserved. 2
  3. 3.     This  guide  will  help  you  do  just  that.  We    According  to  the  Lenskold  Group’s  2010  B2B   5 QUESTIONS TO GUIDE YOUR MEASUREMENT INSIGHT  “I  Don’t  Know.” investment  and  how  will  you  connect  your  increase  could  do  for  their  companies.     cultural  changes  need  to  occur  within  my   4.     Which  are  appropriate  targets  for  improving     with  regard  to  your  knowledge  of  the  return           ©  2011  Marketo,  Inc.  All  rights  reserved.
  4. 4. Part  1:     ©  2011  Marketo,  Inc.  All  rights  reserved.
  5. 5. CUT PROGRAMS TO BUILD CREDIBILITYsolely  to  support  sales,  or  that  it  is  an  arts  and  deserves.   demonstrate  a  strong  sense  that  you  are  managing  a   make  hard  choices  with  company  money.   Seventy-six percent (76%) of B2B marketing professionals agreeof  views.     or strongly agree that their “ability to track marketing ROI gives   the  right  revenue  metrics.   marketing more respect.” Source: Forrester Research   ©  2011  Marketo,  Inc.  All  rights  reserved.
  6. 6.     “Marketing has always been a grueling and competitive sport – not unlike running a marathon. With the changes in the buying process,   in media and technology, and managing expectations, it’s like running a marathon as the ground shifts beneath your feet. What To  formulate  accurate  forecasts,  sales     was already difficult is becoming increasingly difficult. If you’re going to do it without measurement, it’s like running a marathon, in an earthquake, blindfolded.” David Raab, Author, Winning thefrom  making  the  right  strategic  investments  to   Marketing Measurement Marathon it  needs  to  deliver  the  results  it  has  promised.   This  requires  knowing  what  it  will  take  –  in  important  thing  marketers  can  do  to  change   they  are  ready  to  talk  with  sales.  In  the  same  way  that  you  can’t  drive  quickly   Marketers  who  use  this  type  of  rigorous  if  you  rely  only  on  your  rear-­‐view  mirror,  you   in  terms  of  investments,  not  costs,  and  are  report  what  has  happened  in  the  past.  The  terms  of  leads,  pipeline,  and  revenue. ©  2011  Marketo,  Inc.  All  rights  reserved.
  7. 7.  WHY NOW IS THE TIME FORMARKETING METRICS But  with  great  power  comes  great   20%and  sales  teams  must  work  –  and  work   47%together  –  to  drive  revenue.    Because  they  have  ready  access  to   deliver  value  in  line  with  company  revenue      part  of  the  company’s  revenue  engine.   in  their  companies.   35%“70% of the buying process is now complete by the time a prospect is ready to engage with sales.” SiriusDecisions, Inc.   ©  2011  Marketo,  Inc.  All  rights  reserved.
  8. 8.  THE 5 STAGES OF MARKETING ACCOUNTABILITY   producing  asset.   remains  hidden.  Basic  metrics  such  as  lead   source  tracking  and  cost-­‐per-­‐lead  are  put  in   in  front  of  the  revenue  pipeline  –  where   investments  in  revenue  and  growth.  This  is  especially  when  you  don’t  yet  know  how  performance  as  well  as  good  performance.   to  press  release  downloads  to  search  engine   It  requires  top-­‐level  commitment,  discipline,  category  they  are  really  in.   and  investment  in  the  right  systems  and  tools.   ©  2011  Marketo,  Inc.  All  rights  reserved.
  9. 9. Part  2:     ©  2011  Marketo,  Inc.  All  rights  reserved.
  10. 10.   1 Process  begins  with  ROI   scenarios  early  in  the     planning  cycle  to  shape    looking  measurement  and  decision-­‐focused  management. 2a Strategy Impact  & Measurements  are   3.     Focusing  on  the  decisions  that  will     then  planned  concurrent  investment,  you  can  then  determine  exactly   incorporated  to  how  you  will  measure  the  program  against  them.   2b Measurements  capture   and  generate  insight  to   3 ROI  results  guide  changes   ©  2011  Marketo,  Inc.  All  rights  reserved.
  11. 11. STEP ONEESTABLISH GOALS ANDROI ESTIMATES UP-FRONT SHOULD MARKETING HAVE TO JUSTIFY ITSELF? more  likely  to  support  the  investment. Just  the  fact  that  the  marketer  is  walking  program.   the  pursuit  of  true  insight  are  instead  diverted  to  metrics  to  support  those  goals.  Imagine  if  each   changing  parameters  may  vary  the  results  case,  and  expected  case  scenario  outcomes  –  “what  do  we  expect  will  happen  in  exchange  for   actual  results. ©  2011  Marketo,  Inc.  All  rights  reserved. 11
  12. 12. STEPONE   on  the  right.   MARKETING EXPENSES (EXCLUDING OFFER COSTS) MARKETING IMPACT QUANTITY Campaign  Development $25,000 27,000 Mass  Media $100,000 $40,000 594 $875 MARKETING STAFF EXPENSE $519,750 $450 $2,813 $197,505©  2011  Marketo,  Inc.  All  rights  reserved. 12
  13. 13. STEP ONELenskold  Group  provides  excellent  tools       ©  2011  Marketo,  Inc.  All  rights  reserved.
  14. 14. STEP ONE   INCORPORATE ALL RELEVANT EXPENSEScase  scenarios.  This  lets  you  protect  your  an  understanding  of  how  changes  to  various     Take,  for  example,  a  program  that  generates  a  lot  ways  the  program  could  fail  –  and  then,  where   sales  wastes  on  pursuing  leads  that  don’t  convert.  the  risks.  This  may  include  things  directly   expenses  are  included.and  managing  risks  up-­‐front,  you  lessen  the   ©  2011  Marketo,  Inc.  All  rights  reserved.
  15. 15. STEP TWODESIGN PROGRAMS TO BEMEASURABLE A  key  part  of  planning  for  measurement  is   MEASUREMENT COSTS MONEY – SO SPEND WISELY   measure  everything.   early  enough  in  their  lifecycle,  and  they  pay              In  almost  every  case,  you  will  need  to        your  spending  levels  across  markets  to   to  learn  whether  something  works,  or  how  to  make     “ It is more important to periodically capture potentially high-impact insights than to frequently is  usually  a  wise  investment.using  test  and  control  groups. measure less important outcomes simply for reporting purposes.” Jim Lenskold, Lenskold Group ©  2011  Marketo,  Inc.  All  rights  reserved.
  16. 16. STEP THREEFOCUS ON THE DECISIONSTHAT IMPROVE MARKETING MARKETING REPORTING: JUST BECAUSE YOU CAN DOESN’T MEAN YOU SHOULD  looking  decisions.   is  it’s  important  not  to  measure  just  what  you  can,      and  knowledge.   answer,  and  what  would  I  do  if  the  answer  were    An  integral  part  of  your  planning  process   your  understanding  of  how  to  make  the   even  if  you  don’t  meet  all  of  your  program   improve  the  program.  This  is  almost  always    stance,  which  prevents  you  from  moving     ©  2011  Marketo,  Inc.  All  rights  reserved.
  17. 17.  ©  2011  Marketo,  Inc.  All  rights  reserved.
  18. 18.     metrics  that  are  not  addressed  directly  in  this   CUSTOMER SATISFACTION AND NET PROMOTER SCORES   incremental  customer  impact  on  company  revenue        Measures  views  and  impact     measures  the  total  sales  and  margins  of   individual  products    Assesses        Measures  which  product   This  is  not  to  imply  that  these  metrics  are  not   important  for  marketers  to  track  –  just  that   companies  are  more  likely  than  low-­‐growth  companies  to  incorporate   ©  2011  Marketo,  Inc.  All  rights  reserved.
  19. 19. WHERE METRICS GO WRONGmetrics  to  choose  from,  and  almost  all     results  are  hard  to  measure.  In  contrast,  sales  of  them  measure  something  of  value.  The   any  wonder,  then,  that  sales  tends  to  get  the  metrics  internally  within  your  department   For  example,  having  a  packed  event  is  no   of  marketers  measure  lead  quality.  Focusing   good  if  it’s  full  of  all  the  wrong  people.  spend.  Instead  of  pursuing  metrics  that  opt  for  metrics  that  sound  good  and  impress  and  names  gathered  at  trade  shows.   ©  2011  Marketo,  Inc.  All  rights  reserved.
  20. 20. The  worst  kinds  of  metrics  to  use  are  “cost   FINANCIAL OUTCOMES OVER ACTIVITY  Within  this  context,  it’s  only   MARKETING CHAMPIONS   leads,  and  sales  tools.  But  these  answers       expenditures. programs  with  enough  emphasis  on  learning  how  to  increase  the   the  same  results.“ ©  2011  Marketo,  Inc.  All  rights  reserved.
  21. 21. THE RIGHT METRICS Lenskold  Group  points  out  that  there  are       goals  for  each  of  the  key  metrics  you  choose   to  track.  Your  goals  will  put  your  performance     into  context,  and  help  you  and  your  fellow      –  in  other  words,  your       Business Performance   Metrics & KPIs How did we do last week? Last month?Most  B2B  marketers  should  focus  on  two   Last quarter?   Diagnostic Metrics What is working, and what can work better?Revenue Metrics   impact  on  company  revenue   Leading IndicatorsMarketing Program The  incremental     How will we be doing in the future?Performance Metrics ©  2011  Marketo,  Inc.  All  rights  reserved. 21
  22. 22. BUSINESS PERFORMANCE DIAGNOSTIC METRICS LEADING INDICATORS PAUL ALBRIGHT, MARKETO’S CHIEF REVENUE METRICS & KPIS PRESENT: WHAT FUTURE: HOW WILL OFFICER, SHARES HIS SECRETS FOR PAST: HOW DID WE DO? IS WORKING? WE BE DOING? MEASUREMENT SUCCESS:  Revenue Metrics     versus  targets versus  trend  or     choose  wisely.   2.     Measure  success  versus  goals  for  those  metrics   for  every  campaign,  every  channel,  every  sales  Marketing Program    Performance Metrics   group   way  you  can  immediately  see  where  you  are     improving  and  where  you  are  not.Profit Per Customer   acquire     a  customer customer trying  to  achieve,  and  where  you  stand.   serve track  results  weekly,  monthly,  and  quarterly     ©  2011  Marketo,  Inc.  All  rights  reserved. 22
  23. 23.  ©  2011  Marketo,  Inc.  All  rights  reserved.
  24. 24. a  prospect’s  movement  from  one  stage  to     A NEW BREED: REVENUE MARKETERS™ requires  a  new  revenue  methodology.  disagree.  In  today’s  online  and  social  world,   value  leads  and  maximizes  revenue.”revenue.  This  new  way  of  working  requires   track  movement  through  the  stages  –  which  in   pipeline  coverage  will  help  me  hit  my  targets    DEFINE THE REVENUE CYCLE and  evaluate.   the  revenue  cycle.  This  is  unfortunate,  since     how  their  key  metrics  stack  up  against  their  targets,   prospects  forward.   and  what  they  plan  to  do  to  improve  their  results. clear  rules  for  how  prospects  move  through   ©  2011  Marketo,  Inc.  All  rights  reserved.
  25. 25. AWARENESS All Names MarketingSTAGE DEFINITION EngagedAll Names This  is  the  entry  point  for  everyone.  We  have  purposely  called  this  stage   funnel.   Prospect &Engaged   Recycled       Nurturing a  trade  show. Database MQL Lead SDRProspect Sales SAL Lead Opportunity CustomerLead Sales SQLSales LeadOpportunity The  sales  team  has  accepted  these  leads  and  added  them  to  the  pipeline  as    Customer ©  2011  Marketo,  Inc.  All  rights  reserved.
  26. 26. Your  company  may  use  only  a  few  revenue  stages,  or  you  may  model  something  more  CATEGORY DEFINITION / TIMELINE EXAMPLEInventory Stages An  inventory  stage  is  a  “holding  pool”  where  leads  and   Common  examples  of  inventory  stages  include  the  prospect   ready  to  move  to  another  stage.          Gate Stages Assume  your  company  only  wants  leads  from  companies  of   dimension.     $100+  million  in  revenue.  In  the  gate  stage,  a  lead  will  move  SLA Stages       nurturing.  If  a  lead  stays  in  this  stage  for  over  14  days,  it       sales  rep. ©  2011  Marketo,  Inc.  All  rights  reserved.
  27. 27. DETOUR DISQUALIFIED INACTIVE RECYCLED LOST   STAGES success  path,  so  make  sure  your  model       To   Definition   Lost  or  provide  the  highest  value,  sales  should  not   marked  as   who  are  non-­‐   leads  in     deferred   responsive   need  of  more   sales-­‐ready. over  the  last     nurturing (ongoing   rules  that  govern  how  and  when  your   prospects  move  from  one  stage  to  another.   This  includes  how  your  leads  move  from  the  customers  end  up  in  “lead  purgatory.”  inventory  stages  to  a  minimum  –  perhaps  just  don’t  sit  idle. one  of  your  target  industries.leads  originally  deemed  “sales-­‐ready”  are  not.    Because  no  lead  should  ever  remain  stagnant   if  they  don’t  respond  to  a  campaign  or  visit       a  new  program. ©  2011  Marketo,  Inc.  All  rights  reserved.
  28. 28.   BENEFITS BEYOND ANALYTICSnote  that  it  includes  the  success  path  stage,     A  revenue  stage  model  also  provides       move  through  the  funnel.         to  stage.     ©  2011  Marketo,  Inc.  All  rights  reserved.
  29. 29. REVENUE CYCLE METRICS METRIC QUESTIONS IT WILL ANSWER EXAMPLESTHAT MATTER Flow (Lead     Generation)     Balance (Lead     Counts)         Conversion     Which  types  of  leads  have       Velocity   Do  certain  types  of  leads  move  faster  through   ©  2011  Marketo,  Inc.  All  rights  reserved.
  30. 30.     QUESTION: SHOULD METRICS COUNT PEOPLE, Companies  that  sell  a  lot  of  deals  at  lower   ACCOUNTS OR DOLLARS? that  sell  fewer  deals  of  greater  size.  But  even   accounts,  not  individuals. stages  of  their  funnel.  In  this  case,  digging  into   your  earlier  stages  can  serve  as  a  valid  proxy   it  hard  to  track  accounts  for  early-­‐stage  leads.   For  example,  a  company  that  closes  only   meaningful  than  a  company  closing  many   Given  these  pros  and  cons,  most  companies  ©  2011  Marketo,  Inc.  All  rights  reserved.
  31. 31. Understanding  the  conversion  rates  and   LEAD DEFINITIONS & CONVERSION RATES: AN INTIMATE RELATIONSHIPcommunicate  –  your  revenue  cycle  economics.  Let’s  use  Marketo’s  actual  revenue  cycle    As  of  early  2011,  Marketo  spends  ~$275,000  a  month  on  various  demand   -­‐ means  an  incremental  opportunity  is  worth       deal.   Typically,   customers  we  want  to  close  in  future  months.     It  also  allows  us  to  answer  precisely  how   revenue.meaning  they  haven’t  done  anything  in  six  Leads  over  a  two-­‐year  period.   ©  2011  Marketo,  Inc.  All  rights  reserved.
  32. 32. LEAD SOURCE CONVERSION RATIO AVG TRANSITION FLOW product  line,  or  channel  source.  Drilling  in   (ALL TYPES) TIME (DAYS) Website 14some  will  convert  faster  than  others.  That’s   Online Ad 29more  powerful  when  you  can  drill  into  the     Trade Show – Virtual 54   Trade Show 37 up  and  down.   AppExchange 15 For  example,  if  your  leads  for  a  certain  source   Important  Lead  Type  Variables   Webinar 38 418 Alliance 37 313 PPC_GS_US 13 Not Available 4 234 Sponsorship 70 229 Partner 55 Content Syndication 37 133 Web Direct 44 115 Organic – Google 24 113 Web Referral 40 111 ©  2011  Marketo,  Inc.  All  rights  reserved.
  33. 33. REVENUE PERFORMANCEMANAGEMENT METRICS        sales  work  –  and  work  together  –  it  requires  a  new  set  of  metrics  that  focus  not  on  how  end-­‐to-­‐end  revenue  engine.    than  any  other,  provides  an  accurate  measure     ©  2011  Marketo,  Inc.  All  rights  reserved.
  34. 34.    to  measure  your  impact  on  revenue.  FLOW CONVERSION IMPACT INVESTMENT SALES AND RPM OTHER in  key  inventory  stagesLeads Lead Accepted  Lead Investment  per   Investment  per  Win   Discounts ©  2011  Marketo,  Inc.  All  rights  reserved.
  35. 35. TRACKING METHOD BENEFIT By week, month and quarter A  regular  cadence  helps  keep    and  dice  them,  each  of  which  will  frame  your     Trends over time     helps  you  see  if  you’re  improving. Versus goalsgoals  for  each  geographic  region.many  variants  too  frequently,  so  pick  the   Versus benchmarks similar  companies,  as  well  as  versus  your  own   company’s  historical  results. By source By channel, product, region, etc. important  it  is  to  track  your  key  metrics  on  a   more  granular  level. ©  2011  Marketo,  Inc.  All  rights  reserved.
  36. 36.                                                           t                              Target  Latent  Leads                                                                                  Channel                        Install  Base                            ©  2011  Marketo,  Inc.  All  rights  reserved.
  37. 37. ©  2011  Marketo,  Inc.  All  rights  reserved.
  38. 38. WHY MEASURING MARKETING larger  companies  or  more  complex  purchases,  PROGRAMS IS DIFFICULT DON’T GO OVERBOARD ON PROGRAM MEASUREMENT know  which  programs  have  the  most  impact.  In  many  cases,  factors   out  that  marketers  tend  to  overemphasize  their   impact  program  results  –  from  macro-­‐economic   trends  to  the  weather  to  the  quality  of  the    The  money  you  invest  today  will  have  an  uncertain  impact  at  an   economy  improved,  can  marketers  claim  their  uncertain  point  in  the  future.  Last  month’s  trade  show  may  deliver  results  next  month  or  perhaps   measurement.   measurement  ever  since  John  Wanamaker    wisdom  says  at  least  seven  touches  are  needed  in  order  to  convert  a  cold  lead  into  a  sale.   is,  I  don’t  know  which  half.” According  to  company  comprises  six  people.  In  the  case  of   ©  2011  Marketo,  Inc.  All  rights  reserved.
  39. 39. you  a  more  accurate  view  into  your  customer  various  methods  exist  to  give  companies   with  a  corollary  rise  in  cost  and  complexity.  insight  into  their  various  programs’  levels  of   LESS ACCURATE LESS COST  4.  Test  and  Control  Groups Test  and   Control  5.  Full  Market  Mix  Modeling Groups INCREASED INCREASED INSIGHT COMPLEXITY Market  Mix  Modeling   ©  2011  Marketo,  Inc.  All  rights  reserved.