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Don't Let Bad Data Haunt You: An Expert Guide to Marketing Metrics

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  • Passion – founding the company
  • 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:
  • Please note that today’s webinar is being recorded. It will be available on-demand soon after the conclusion of the webcast.

  • 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: Twitter
  • 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?

    A common example of this comes from the 2010 study from The Lenskold Group. They found that the number one metric used by lead generation marketers is lead quantity, and barely half of marketers measure lead quality. Focusing on quantity without also measuring quality can lead to programs that look good but don’t deliver profits. Having a packed event is no good if it’s full of all the wrong people. To take this idea to the extreme, the phone book is an abundant source of “leads” if you only measure quantity, not quality.

    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 change in buying, 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.

    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.]


    Here’s Marketo’s…. Let me explain.
  • Many names are not yet our friends
    Names are NOT leads, don’t call them leads

  • Majority of leads NOT sales ready. This is OK since human interaction is part of developing the relationship (nurturing). These Lead are recycled back to Target for additional nurturing until Sales Ready.
  • Sales does on call, and converts if Opp
  • This is how Marketing gets paid… carry a quota for Opportunity created.
    Only Sales can create the opportunities.
    [Requires very solid definitions of what is an opp, since people get paid on it – can’t be subjective.]
  • Model
    Note Success Path and Detours; Inventory and SLAs
  • Google Analytics for Revenue
  • Focus on MQL to SQL pinch
    False positive not expensive
    False negative is!
  • Present to the slide

    Conclusion: The ability to create trusted marketing forecasts creates more power and influence for marketing, better justification for the marketing budget, and ultimately the potential for higher compensation for marketers. So how do you do it?
  • 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
  • Next, let’s focus on “Investment” side of ROI. Notice it’s investment, not cost. You “invest’ in growth, marketing is a growth driver.

    -Then you enter and track your budget plan
    -as invoices come in from your financial system, you can map them to line items
    -you can also map your Marketo programs to specific budget categories or line items
    -you can track planned, forecasted and actual spend, and indicate whether forecasted spend is committed or optional
  • 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
  • Different pipeline allocations – first / even
  • 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
  • Many marketers think of marketing ROI as reporting on the outcome of their programs. But the best companies measure ROI to find not just what worked, but what works better. They focus on “improving ROI,” not just “proving ROI.

    Planning for marketing ROI involves three main activities:
    Establish targets and ROI estimates up-front: With ROI goals in place, the CFO will see not just costs going out the door, but also exactly what benefit is expected to come from that cost.

    2. Design programs to be measurable: As part of planning, you should answer three questions:
    - What will you measure?
    - When will you measure?
    - How will you measure?
    By planning this upfront, you’ll be sure to include the variance necessary to measure relative lift.

    3. Focus on the decisions that will improve marketing: You’ll deliver the best ROI when you move past backward-looking measurement to forward looking decisions. Your highest-ROI decisions will often flow from strategic questions about offers, messages, target segments and geographies – not simply “pass/fail” assessments of specific programs or tactics.
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