The ROI Dilemma: Aligning Marketing Priorities with Measurable Performance
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Despite steady advances in marketing execution and measurement technologies, B2B marketing leaders still struggle to measure marketing’s impact on the business. In this webinar, SiriusDecisions Research Director Ross Graber & Allocadia CMO James Thomas look at the current state of B2B marketing measurement and share guidance on how successful organizations align their business objectives with measurable marketing impact. Join us to hear SiriusDecisions' research-based recommendations for how to: - Establish a meaningful view of marketing’s contribution to revenue - Develop measurement priorities, and align those priorities with marketing investments - Structure a system of measurement that effectively demonstrates results.
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The ROI Dilemma: Aligning Marketing Priorities with Measurable Performance
- 1. The ROI Dilemma: Aligning Marketing Priorities with Measurable Results Featured Analyst: The ROI Dilemma
- 2. Ross Graber Services Director, Marketing Operations Strategies @RossGraber James Thomas CMO @jthomas_44 Presenters
- 3. Agenda Housekeeping • Questions? Use the Chat Panel or on Twitter • Technical Difficulties? Contact brittany.wong@allocadia.com • The ROI Dilemma: marketing measurement challenges and trends • How to leverage effective planning processes to drive effective measurement using the SiriusDecisions Campaign Framework • How to deploy strategic planning processes with investments, measurement and performance using Allocadia #SDWebinar
- 4. Ross Graber Service Director, Marketing Operations Strategies @RossGraber #sdwebinar
- 5. The Marketing ROI Dilemma Linking goals and performance measurement
- 6. What We’ll Cover Today • Key issues • Marketers struggle to develop measurement that adequately captures marketing’s impact – especially when demand creation isn’t the only goal • Poor definition of what will be measured and how success will be judged leads to inefficient use of marketing’s resources • Technology-fueled attribution models may offer easy answers, but they are leading b-to-b marketers astray • What you will walk away with • Key considerations for building a measurement strategy • An understanding of attribution modeling options and their implications • A planning framework for delivering more strategic measurement © 2014 SiriusDecisions. All Rights Reserved 6
- 7. Marketing Leaders: Still Struggling With Measurement SiriusPerspective: Working Not - Working • Better visibility of tactic performance through improved systems • Marketing sourced revenue is clearer • Demand waterfall helps identify required volumes and problem areas © 2014 SiriusDecisions. All Rights Reserved 7 • No agreement on a definitive ROI metric • Poor connections between activities and business impact • Evaluation of non-demand creating activities
- 8. Marketing Measurement A strategic view
- 9. Expectations For Marketing’s Contribution SiriusPerspective: Sourcing pipeline is not always the primary objective of marketing; develop measurements that reflect marketing’s priorities. SiriusPerspective: Account Type Pipeline Large: Strategic/ Enterprise Named/ Territory Small/Midsize and Non-Named KPI Averages © 2014 SiriusDecisions. All Rights Reserved 9 Typical Program Balance Demand >40% Enablement 20%-30% Reputation <20% Influenced: 60%-75% Sourced: 15%-25% Enablement >40% Demand 30%-40% Reputation <20% Influenced: >75% Sourced: <10% Reputation >40% Demand 30%-40% Enablement <15% Influenced: 50%-60% Sourced: 25%-45%
- 10. Marketing Measurement Is a Process SiriusPerspective: A deliberate process drives development of useful, well understood, accepted systems of measurement – success isn’t achieved through happenstance. SiriusPerspective: Listening Goal Setting Delivery and Education • Project Initiation • Stakeholder Definition • Reporting Goal Definition • Business Goal Validation Execution Coaching © 2014 SiriusDecisions. All Rights Reserved 10 • Data Gathering • Report Building • Documentation and Approvals • Launch /Launch Planning Evolution • Adoption and Use • Refinement
- 11. Metric Class: Getting Specific SiriusPerspective: SiriusPerspective: The first step toward aligned measurement requires distinguishing between what is done and the results produced. Class Measure Description © 2014 SiriusDecisions. All Rights Reserved 11 Counts of actions taken • Email sent • Calls made • Requirements written Activity Direct results of actions • Inquiries • Proposals • Demo requests Output Effects against business goals • Revenue • Market share • Profit Impact
- 12. Tactic Attribution “I want to know how much revenue each marketing tactic creates”
- 13. Attribution Models – The Basics SiriusPerspective: Popular wisdom and vendor opportunism is pushing b-to-b marketers toward tactic attribution models. How They Work • Assess the value of individual marketing tactics through association with the revenue they yield • Stake a claim to the value of won opportunities • Factor revenue against the cost of a tactic to come up with a tactic ROI © 2014 SiriusDecisions. All Rights Reserved 13 Won opportunity value Tactic cost ROI $100,000 $25,000 4X SiriusPerspective:
- 14. Marketing Attribution Models – Tread Carefully! SiriusPerspective: SiriusPerspective: Despite their variations, attribution models don’t deliver marketers a trustworthy view of the value created by different tactics. Single Touch Distributed Variations Considerations • First touch • Last touch • Select touch • Even • Assumed • Statistical © 2014 SiriusDecisions. All Rights Reserved 14 • Simple to implement • Overlooks multi-touch, multi-player value creation • Touch choice creates bias • Factors in multi-touch complexity • Rules often arbitrary and don’t reflect buying realities • Must be predicated upon deep buying-cycle analysis Attribution Models
- 15. There’s a Better Way
- 16. Effective Planning Drives Effective Measurement SiriusPerspective: Organized by tactic type, program and campaign, view combinations of SiriusPerspective: actions relative to campaign objectives. Campaign Measurement Framework Addresses campaign-wide achievement against top-level goals Summary Campaign Measure against defined objectives connected to success Shows near-term outputs of tactic performance Reputation Advertising SEM PR Social Tactic Types © 2014 SiriusDecisions. All Rights Reserved 16 Demand Creation Sales Enablement Market Intelligence Programs Tactic Performance Ad Impressions Clicks Inquiries Cost A 1,000 20 4 $500 B 3,000 10 8 $5,000 C 2,000 200 2 $1,000 Tactic Shares Clicks Subscribes Cost A 12 20 4 $500 B 20 10 8 $50 C 5 200 2 $0
- 17. Campaign Measurement Framework SiriusPerspective: Organized by tactic type, program and campaign, view combinations of actions relative to campaign objectives. SiriusPerspective: Campaign Measurement Framework Revenue Goal $$$ Campaign Goal 1: X% Market Share Campaign Goal 2: +Y% Retention Campaign Goal 3: >Z:1 Revenue : Invest. Programs © 2014 SiriusDecisions. All Rights Reserved 17 Campaign Reputation Demand Creation Sales Enablement Market Intelligence Webinars Social Content Syndication Events Summary Tactic Types Tactic Performance Webinar Reg Attend MQL Cost A 250 120 20 $5,000 B 500 100 8 $8,000 C 125 90 12 $3,000 Event Attend Inq Briefings Cost A 50 12 0 $8,000 B 300 25 3 $10,000 C 100 20 6 $5,000 Demand Goal 1: +Q% Pipeline Demand Goal 2: +R% Velocity Demand Goal 3: +S% Influence
- 18. But Why Are Marketing Organizations Still Struggling? SiriusPerspective: To get specific about planning and expectations, b-to-b organizations must employ disciplined process, informed by data and supported by leadership. • Planning takes a disciplined approach supported by process, strategy, skills, tools and leadership • Developing the charter for marketing is difficult work • Visibility to organize performance by expectations is often lacking © 2014 SiriusDecisions. All Rights Reserved 18
- 20. Breaking Down the Objectives SiriusPerspective: After specifying strategies for generating revenue, b-to-b organizations SiriusPerspective: can align their marketing actions accordingly. New Logo Retention Upsell Cross-Sell Sales in new accounts © 2014 SiriusDecisions. All Rights Reserved 20 Ensure existing customers retain existing commitments Expand into new buying centers within existing logos Expand in current buying centers within existing logos
- 21. Campaign Objectives Worksheet: Summary Level Campaign-wide Summary Objectives How campaign objectives distribute across objective areas (relative priorities) Campaign Priority Stated Objectives New Logo: • Logo count • % Logo gain • Market share • New logo revenue Retention: • % revenue retained • % accounts retained • Cost per retained Cross-sell: • New buying © 2014 SiriusDecisions. All Rights Reserved 21 center $$$ • Account expansion • Wallet share Upsell: • Upsell revenue • % existing product growth • Wallet share Sample Metrics Revenue Objective: $______ or +___ % New logo: ___ % ___% _________________ Retention: ___ % ___% _________________ Cross-sell: ___ % ___% _________________ Upsell: ___ % ___% _________________
- 22. Program Objectives Worksheet – Program Family SiriusPerspective: Organized by tactic type, program and campaign, view combinations of actions relative to campaign objectives. SiriusPerspective: Program Family List top three opportunities/obstacles to campaign success per Reputation Demand Creation Sales Enablement program family. Program tactics are designed to address these. O / O • Small % of audience is aware of company • Those who know us know us for X, not Y • Competitor Z dominates the conversation • Inquiry counts are low • Qualifying a lead takes too long and costs too much • Content attracts users, not decisionmakers • Deals stall at late stages • Field sales reluctant to interact with persona A • Frequently outmaneuvered by competitor Q © 2014 SiriusDecisions. All Rights Reserved 22 H i g h M e d i u m L o wH i g h M e d i u m M e d i u m H i g h H i g h L o w
- 23. Align Resources and Priorities SiriusPerspective: Start with an allocation approach to budgeting, and fill in the details when quarterly budgets are understood. SiriusPerspective: Campaign Budget Campaign Allocated to Program Families And Then to Quarters © 2014 SiriusDecisions. All Rights Reserved 23 Reputation Demand Creation Sales Enablement Q2 Q3 Q4 Market Intelligence Q1 And Then Bottom-up to Execution Types Global Development Global Execution Regional Execution Regional Development
- 24. Recommendations • Effective performance measurement starts with defining what the business expects from marketing. • There isn’t one ROI metric, but instead a custom collection of measures that demonstrate marketing’s performance. • Create this view performance from the top down, instead of trying to construct it by piecing together tactics outside of objectives. • Link the organization’s goals with the actions marketing will take to produce those outcomes. • Plan purposefully against marketing’s objectives and assign marketing’s resources to prioritized performance areas. © 2014 SiriusDecisions. All Rights Reserved 24
- 25. Thank You!
- 26. James Thomas CMO of Allocadia @jthomas_44 | @allocadia © 2014 SiriusDecisions. All Rights Reserved 26 #SDWebinar
- 27. How to Align Marketing Priorities with Performance Results using Allocadia © 2014 SiriusDecisions. All Rights Reserved 27
- 30. Create alignment and gain full visibility across your marketing organization
- 31. Your strategic plans, investments and budgets, all in one place.
- 32. Leadership View: Marketing Investment Target Performance Gain insight to see how marketing is investing against business goals © 2014 SiriusDecisions. All Rights Reserved 32
- 33. Operations View: Strategic Investment Plan Understand your global marketing mix and investment strategy © 2014 SiriusDecisions. All Rights Reserved 33
- 34. Tracking Investment Performance: Plan vs. Actuals Know how your spending against plan with real-time insights © 2014 SiriusDecisions. All Rights Reserved 34
- 35. Marketing Performance: Marketing Returns Strategize & Plan: Effective Planning to Marketing Measurement © 2014 SiriusDecisions. All Rights Reserved 35
- 36. Marketing Performance: Marketing Returns Share how marketing is contributing to the business © 2014 SiriusDecisions. All Rights Reserved 36
- 37. Key Takeaways • A better way of measurement starts with better planning • Drive towards a sense of impact. Set marketing’s goal and develop expectations for performance • Define how marketing will contribute and what they will drive for the business
- 38. Questions Please your questions in the Chat panel. To see a demo of Allocadia, go to: learn.allocadia.com/demo
- 39. Thank you. • Receive a copy of this presentation • Get a personalized demo of Allocadia learn.allocadia.com/demo James Thomas CMO | Allocadia james.thomas@allocadia.com @Jthomas_44 @allocadia Ross Graber Services Director, Marketing Operations Strategies Ross.graber@siriusdecisions.com @RossGraber @siriusdecisions
Editor's Notes
- I’m here today to talk about the dilemma marketers find themselves in when it comes to showing return on marketing investment. At the heart of dilemma is the fact that marketing leaders almost universally agree upon the importance of showing marketing ROI, but very few marketing organizations even claim to be able to do it – muchless understand how to go about creating a view of marketing ROI. That is in essence the definition of a dilemma – we know we need to do it, we’re being asked to do it, we can’t do it today and we’re not sure what it’s going to look like or how we’re going to get there.
- Which takes us to what I’m going to cover today.
- We’ve been talking to marketing leaders and here’s what they’re telling us. There are a lot of things that have gotten a lot better. [fill in] But there are still some bit challenges… Most businesses are looking for a single marketing ROI metric and not having success. Connections are not being made between marketing’s actions and business impact. And evaluating the effectiveness of activities not intended to directly create demand is still difficult. [Many things may be better, but the core problem hasn’t been solved] -- The highest driver of change cited by CMOs (31 percent) was the need to show ROI Fewer than 20 percent of b-to-b organizations are comfortable with their ability to quantify the returns on marketing spend
- Let’s take a look at why this is happening.
- The thing most businesses struggle with is that that ask the question “what is marketing contributing” before they answer key questions about how marketing should be contributing. Marketing’s job changes based on the company’s go to market focus. When marketing focuses on large accounts…. And that’s much different than when marketing focuses on smaller accounts…. [different expectations deliver different results and need different ways to measure the return]
- Which tells us how important it is to set goals for marketing and marketing reporting. At SiriusDections, we’ve researched the process orgs go through for developing measurement - and it is very much as process. The first of 3 phases of reporting development is the goal setting phase. While we see a lot of organizations jump directly to execution because they feel it will yield faster results, that’s rarely the answer. Time spend aligning reporting goals with the organization’s expections for how marketing is going to contribute to acheiveing business goals is time well spent. [use the process to set expectations, otherwise you’re guessing]
- When set our goals for measurement, it’s important that we have a strong handle on the types of measurements that are available to us. We’ve developed a Metrics Spectrum that defines this for marketers. The most basic element of what we measure is activity – what we did. This is not ROI. Then there;s output. With all the technological advances in marketing systems, we have more of this than ever. But doesn’t show us business impact. And without a strategy, you’ll never be able to make the connection between outputs and business results. Which takes us to Impact metrics – these are the ultimate results that the business cares about. Revenue, market share, profitability. When systems of measurement work, they’re able to tie a series of actions and their outputs to the business results that they are intended to contribute. [NEXT SLIDE] [vocabulary helps make the distinctions between what be do and the results we need – but without objectives, we can’t get to results]
- And then there’s tactic attribution…. For those not familiar, tactic attribution is a technique which looks to apportion revenue value to each marketing tactic execute. And tactic attribution tends to work completely outside of the goals setting process. Let me describe it…
- Here’s the basic premise behind how tactic attribution models work. - They look to associate individual marketing tactics with the revenue they are considered to have produced. The revenue produced is calculated by making a claim against the won opportunity value of opportunities associated with that tactic. So if a buyer downloads a white paper and later signs a $100K deal with me, that white paper get’s credited $100k (or some share of it). The won revenue amount is divided by the cost of the tactic, let’s say $25K in this example to arrive at a Tactic ROI. Let’s move on an dig into some of the variations we see and their implications.
- First is single touch. ….. This isn’t the answer. We can’t start with the tactics if we want to show marketing impact.
- H
- A better way starts with better planning. I like to use our campaign measurement framework as the example. Campaign, defined buyer need and audience. Builds from the top down, starting with objectives then breaking out into performance areas – reputation, DC, SE , MI – the things that marketing does. These need objectives too. Then tactics need to be constructed to achieve those program objectives – they’re mid-term indicators of progress – most sales cycles are long and we can’t wait until the end to measure. Then we can understand tactics relative to their own performance. Did they do what they needed to do. - Work top down!
- Now let’s be specific – this is what goals can look like…. Review goals, then discuss tactic performance and comparisons. Knowing the activities and outputs. Looks great – How do I do that
- Most marketers I share this with can immediately relate. They know what they’re being asked to do and know it’s more involved than just assigning revenue to stand-alone tactics. But why do they still struggle. - For one thing, they lack the process to set goals and align them with a planning approach. - Sales marketing and product alignment is difficult work and it’s difficult to chart a course for marketing and develop organizational buy in - And organizations with the desire to plan this way find them lacking the tools to support showing results against their objectives and attain the visibility required to manage the process
- It may be hard work, but there is a path to take. Next I’m going to focus on planning so we can develop what types of returns are expected of marketing.
- And I find that it begins with developing the strategies for how a business is going to develop revenue. It comes from one of four places…
- The next step is to be specific about how our segmented approaches are going to produce revenue – how we’re going to measure success. Because we may choose different marketing approaches based on what our objectives are. Let’s start by focussing on where our revenue is going to come from . It helps us drive what we need to do.
- Then let’s break that down one step further. And this is a worksheet we’ve developed for defining that next level of program objectives. We call it the obstacles and opportunities worksheet. It’s meant to force us to be specific about what our efforts are going to accomplish. [ Give examples] rank them] use this as a guide to develop metrics, narrow the list of what you’re going to measure and think about your allocation of resources.
- © Copyright SiriusDecisions. All Rights Protected and Reserved.
- The solution to the ROI dilemma is to reshape the problem – and then own it. Marketing leaders need to define how marketing is going to contribute – and it’s not just leads – and be upfront about these being the things that marketing will drive. Define what marketing will deliver. There’s not one thing that will be delivered, so use the roadmap for measurement to sort out what marketing will do and then produce the collection of metrics that tell a more complete story. Getting this right is about producing connections between the things we do and the impacts they’re supposed to create. Drawing those linkages allow use to tie immediate results to mid term and long term results. And then put your money where it counts. Use a purposeful planning process to match your resources with the organization’s specific objectives and religiously track your acheivement against them. The reason that we care about ROI is that we need to show how marketing is delivering – and with a purposefully driven approach to measurement, more b-to-b organizations can confidently show the value marketing creates.
- To set marketing’s goals for performance reporting, you need to first align the marketing organization as a whole. Most marketing orgs today are silo-ed, and it doesn’t have to be that way. Allocadia is designed to manage your global and regional investments, so all your marketing spend and results becomes aligned across teams, BUs, channels, agency vendors, etc. It is a starting place for marketing organizations to set a foundation to align business priorities with marketing performance. Ultimately, as Ross mentioned, leadership can set the stage to drive towards making a sense of “Impact” , so we can answer critical business questions like: How can we understand Marketing’s Impact against business goals and performance? Let me show you how we can do that with Allocadia. --- how to --- In Allocadia, you can create a marketing hierarchy that makes sense to your organization from an investment and results view. This is a typical example of a global B2B organization: Field Marketing split out by region (or product line, business unit, channel/MDF and agency vendor spend) [Build 1 – Folder highlights] As you can see here, managing your marketing org hierarchy is as simple as thinking of this as folders and subfolders. [Build 2 – User Share Permissions] Aligning your teams, you can also set the appropriate share permissions and access rights to different marketers. [speak to example] [Build 3 – Multi-currency] With global organizations, you often need to use multi-currencies. We can manage multi-currencies and roll-up into a master currency. In order to report on performance, you need visibility across your organization in two critical areas: [Build 4 – Investment/Returns Hierarchy] First, your investments. You need to understand how and where you’re investing. This is where you manage all your global investment planning and spend. Second, your results. How you can tie your investments to your results and performance. This is where you manage your program lead targets and results. WHAT YOU GET: Create alignment and gain full visibility across your marketing organization From a very rudimentary basis, as marketers, we’re given a budget from finance and we need to show how we’re spending against it AND share what results we’re driving for our businesses. And we can do that by aligning our TOP-DOWN target / budget allocations with our BOTTOMS-UP marketing plans. Here’s how we can do that: [Build 4 – Top-down Budget Allocation for North America] Let’s look at the North America budget as an example. This “arrow” is where finance can input the budget allocation for North America by quarter. They would do the same for each budget. Now that the budget is established, the North American marketing team needs to align their marketing plans to their target budget. Let’s go into the North America plan and budget.
- [Builds – there’s a lot] I think you can speak to this slide well Special notes: Details Panel – Objectives. “Taking the SiriusDecisions Objectives that Ross mentioned, we’re able to align the Objective with our programs. Details Panel – Program Family. “Further, we can align the SiriusDecisions Program Families with the programs as well. It becomes really easy for field teams to align PROGRAM SPEND to BUSINESS PRIORITIES. WHAT YOU GET: Your strategic plans, investments and budgets, all in one place. Because all of the budgets globally are brought together in one place, these become the critical strategic data points that your organization can now segment by. Let me know show you what I mean in the analytics.