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Raab B2B University Marketing Measurement


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David Raab presentation on marketing performance measurement from Silverpop B2B University, November 2009.

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Raab B2B University Marketing Measurement

  1. 1. Measurement, Accountability and ROI B2B Marketing University December 1, 2009 David M. Raab Raab Associates Inc.
  2. 3.
  3. 4. Today’s Goals <ul><li>understand the measures you need </li></ul><ul><li>build a plan to capture them </li></ul>
  4. 5. (Sad) State of the Art <ul><li>19% of marketers are confident they could forecast the impact on sales of a 10% cut in marketing spend </li></ul><ul><ul><li>Association of National Advertisers, 2009 </li></ul></ul><ul><ul><li>good news: up from 10% in 2009 </li></ul></ul><ul><li>24% of marketers calculate ROI, NPV or other profitability metric for at least some marketing investments </li></ul><ul><ul><li>Lenskold Group / MarketSphere, 2009 </li></ul></ul><ul><ul><li>bad news: barely changed in past five years </li></ul></ul>
  5. 6. Why It Matters <ul><li>3.3x higher Marketing ROI vs. average for best-in-class companies, who more often apply measurement best practices: </li></ul><ul><ul><li>1.7x more set channel performance standards </li></ul></ul><ul><ul><li>1.7x more assign an individual to regularly calculate ROMI </li></ul></ul><ul><ul><li>1.5x more keep history of marketing performance </li></ul></ul><ul><ul><li>1.5x more define campaign success measures in advance </li></ul></ul><ul><ul><li>AberdeenResearch, 2008 </li></ul></ul><ul><li>2.0x higher ratio of faster vs. slower growth among firms that use ROI metrics vs. those that use traditional metrics </li></ul><ul><ul><li>Lenskold Group / MarketSphere, 2009 </li></ul></ul>
  6. 8. Measurement Goals: Count Response <ul><li>response capture </li></ul><ul><li>campaign attribution </li></ul><ul><li>cost capture </li></ul><ul><li>comparisons vs budget, vs history </li></ul><ul><li>response quality </li></ul>
  7. 9. Measurement Goals: Show Impact <ul><li>import sales data and match to leads </li></ul><ul><li>attribute sales to campaigns </li></ul><ul><li>simple ROI (= revenue / campaign cost) </li></ul><ul><li>full ROI: </li></ul><ul><ul><li>estimate differences in future value </li></ul></ul><ul><ul><li>estimate additional marketing & sales costs </li></ul></ul><ul><li>applies to lead generation campaigns only </li></ul>
  8. 10. Marketing / Sales Integration Marketing Sales then… metrics measures # new leads marketing cost / qualified lead marketing cost # qualified leads # accepted leads # closed sales / # accepted leads sales cost / $ sales sales cost # closed sales $ sales
  9. 11. Marketing / Sales Integration … now metrics measures # new leads marketing cost / qualified lead marketing cost # qualified leads sales + marketing cost / $ sales # accepted leads # closed sales / # accepted leads sales cost / $ sales sales cost # closed sales $ sales Marketing Sales
  10. 12. Marketing / Sales Integration … now <ul><li>Additional Implications: </li></ul><ul><li>unified sales / marketing reports </li></ul><ul><li>sales access to individual lead history </li></ul><ul><li>greater emphasis on recycling leads </li></ul>Marketing Sales
  11. 13. Measurement Goals: Understand Process <ul><li>define marketing / sales funnel </li></ul><ul><li>define markers for each funnel stage </li></ul><ul><li>track progress through stages </li></ul><ul><li>measure impact of treatments on progress </li></ul><ul><ul><li>conversion rate and velocity </li></ul></ul><ul><li>tailor treatments to stages </li></ul><ul><ul><li>refine based on results </li></ul></ul>
  12. 14. Understand Process (1)
  13. 15. Understand Process (2)
  14. 16. Understand Process (3)
  15. 17. Measurement Goals: Optimize Results <ul><li>test management and reporting </li></ul><ul><li>downstream impact of changes </li></ul><ul><li>resource allocation </li></ul><ul><li>business simulation model </li></ul><ul><li>statistical optimization </li></ul><ul><li>ROI hurdle rate </li></ul>
  16. 18. Measurement Goals: Strategic Alignment <ul><li>strategy definition </li></ul><ul><li>spending vs. targets </li></ul><ul><li>market perceptions </li></ul><ul><li>lead profiles </li></ul><ul><li>behaviors </li></ul>
  17. 19. Strategic Alignment Strategic Objective: penetrate SMB market Marketing Objective: generate SMB leads Marketing Sales Funnel Stage Metrics / Goals Metric Type (all marketing) 30 % of marketing spend against SMB leading reach top 5 Google page rank leading interest 20 % of new leads from SMB coincident desire 65% of SMB leads are sales qualified coincident convert 25% close rate on sales qualified SMB leads lagging convert 15% of sales to SMB lagging
  18. 20. Social Media <ul><li>Capability Levels </li></ul><ul><li>monitor </li></ul><ul><li>react </li></ul><ul><li>initiate </li></ul><ul><li>empower </li></ul>
  19. 21. Social Media Social Media Capability Levels broadcast  monitor  react  initiate  empower <ul><li>Social Network Uses </li></ul><ul><li>60% thought leadership </li></ul><ul><li>49% generate leads </li></ul><ul><li>46% customer feedback </li></ul><ul><li>35% advertising </li></ul><ul><li>29% market research </li></ul><ul><li>15% other </li></ul><ul><ul><li>- BtoB Magazine, 2009 </li></ul></ul><ul><li>Social Media Uses </li></ul><ul><li>25% generate awareness </li></ul><ul><li>18% customer engagement </li></ul><ul><li>16% engage analysts/influencers </li></ul><ul><li>15% market products </li></ul><ul><li>14% monitor and respond </li></ul><ul><li>8% competitive tracking </li></ul><ul><li>4% other </li></ul><ul><li>- Visible Technologies & SiriusDecisons, 2009 </li></ul>
  20. 22. Social Media <ul><li>Social Media Measures </li></ul><ul><li>activity: mentions, links, downloads, views, shares, members </li></ul><ul><li>sentiment: positive/negative comments, evangelists/detractors </li></ul><ul><li>content: brand attitudes, messages, insights </li></ul><ul><li>impact: attributed sales, customer satisfaction, service costs </li></ul><ul><li>Social Media ROI Metrics </li></ul><ul><li>31% Web traffic/response rates </li></ul><ul><li>20% qualified leads </li></ul><ul><li>14% customer loyalty/retention </li></ul><ul><li>13% brand awareness </li></ul><ul><li>12% revenue </li></ul><ul><li>10% other </li></ul><ul><li>- Visible Technologies and SiriusDecisions, 2009 </li></ul>
  21. 23. Recap: Five Measurement Goals <ul><li>Count Response </li></ul><ul><li>Show Impact </li></ul><ul><li>Understand Process </li></ul><ul><li>Optimize Results </li></ul><ul><li>Strategic Alignment </li></ul>
  22. 24. Industry Practice <ul><li>35% use traditional metrics </li></ul><ul><ul><li>e.g. response rate </li></ul></ul><ul><li>35% use basic financial metric </li></ul><ul><ul><li>e.g. cost/lead </li></ul></ul><ul><li>24% use profitability metric (at least sometimes) </li></ul><ul><ul><li>e.g. NPV, ROI </li></ul></ul><ul><li>(6% don’t know) </li></ul><ul><ul><ul><ul><li>Lenskold Group / MarketSphere, 2009 </li></ul></ul></ul></ul>
  23. 25. Systems CRM/sales automation Web site call center reports & analysis Web analytics <ul><li>marketing </li></ul><ul><li>automation </li></ul><ul><li>database </li></ul><ul><li>campaigns </li></ul><ul><li>scoring </li></ul>email direct mail events search marketing advertising social media
  24. 26. Marketing Measurement Maturity Model level data needs system needs measures skills / processes 1. Count Response _ campaign tracking codes, universe, budgeted cost and response _ campaign costs _ campaign responses _ response quality _ campaign management _ marketing planning _ capture responses & link to campaigns _ calculate measures & compare vs. history _ campaign response [varies by channel] _ campaign cost _ cost per response _ plan vs actual results _ response quality _ campaign design _ tracking discipline 2 Show Impact (acquisition programs) _ sales results on leads _ sales & costs on existing customers _ marketing treatments and costs per lead/customer _ marketing lead database _ import sales results & link to marketing leads _ campaign attribution method _ report marketing costs by lead _ estimate long-term value _ new leads per campaign _ sales per lead _ simple ROI (sales / acq cost) _ long-term value per lead _ long-term costs per lead _ full ROI (long term value / all sales & marketing costs) _ long term value forecasting _ cost allocation 3 Understand Process _ customer attributes _ customer behavior _ stage assignment / scoring _ track funnel status over time _ calculate summary measures on transitions and time-in-stage _ correlate stage changes with marketing treatments _ calculate flow through funnel _ funnel counts _ treatment impact on conversion and time-in-stage _ treatment impact on flow through funnel _ treatment ROI (net change in value / change in cost) _ funnel stage definition _ funnel change analysis 4 Optimize Results _ test setup and reporting _ business modeling _ automated optimization _ budget and revenue projections by period _ test design, execution & analysis _ business modeling 5. Strategic Alignment _ strategy tags on campaigns _ Web visitor behaviors _ report budget by strategy tag _ Web surveys & visitor profiles _ social media monitoring _ sales analysis (upsell, etc.) _ trend analysis _ marketing spend vs. target (by strategy tag) _ market perceptions vs. target _ visitor attributes vs. target _ trends _ strategy measure definition _ data interpretation
  25. 27. Next Steps <ul><li>Consider: </li></ul><ul><li>where you’re spending your budget </li></ul><ul><li>the biggest information gaps </li></ul><ul><li>potential for improvement </li></ul><ul><li>management pressure </li></ul><ul><li>low hanging fruit </li></ul><ul><li>resource gaps </li></ul><ul><li>outside resources </li></ul>doable within data needs system needs measures skills / processes next week next month end of year mid next year
  26. 28. Keys to Success <ul><li>Compared with all firms, companies with effective marketing measurement: </li></ul><ul><li>2.5 x more have a formal process to apply measurements to decisions </li></ul><ul><li>2.1 x more make targeted investments in measurement systems, skills and data </li></ul><ul><li>2.0 x more hold marketers accountable for meeting targeted measurements </li></ul><ul><li> - CMG Partners and Chadwick Martin Bailey, 2009 </li></ul>
  27. 29. Thank You David M. Raab email: [email_address] blog: Twitter: @draab phone: 914-241-2117