Part of any good strategy is to understand what drives your business. Marketing savvy organizations understand the concept of demand generation, the impact it has on sales and the metrics you should watch to understand the ROI of your marketing efforts.
Over the last years this conversation has gotten more and more frustrating. You want to show value from your dollars spent but with all the ways that buyers consume information during the buying cycle, you might start to feel there is really no way to prove ROI.
I’ll use enterprise technology sales as an example. We know the following:
So if there are so many factors that go into a sale, how can you ever report on ROI?
Spreadsheet hell? Not willing to give up on telling this story, I’ve been known to literally go through all the customer wins and manually see which marketing programs had impact during the cycle but this takes hours, and more importantly, patience.
Invest in more tools? Or you can look at the dozens of data analysis tools online and invest in some pretty sophisticated BI to help tell the story as well. There are a few out there, but it requires people who really understand how to work with data. Not something a marketing person is often trained on.
Look at the Bigger PictureTo me it seems that we can no longer calculate simple ROI like “cost per lead” of overall revenue dollars from a marketing activity, that is just not the way it happens. But there are things you can measure to understand the impact of your marketing efforts.
Pipeline GrowthI’ll use enterprise sales again as an example. The rule of thumb I live by is to always have 3x your revenue goals in your pipe. Pipeline or “pipe” as many sales people refer to it, is something often looked at by the sales organization. After all, this is how they make their living. Marketing needs to track pipe as well. Setting goals on pipe increases and maintaining the consistent 3x ratio is a clear metric that shows how things are working.
Measure ImpactTools are pretty sophisticated these days. I can pretty much watch any persons journey as they make their purchase decisions but stay in touch with “call to actions.” These are the activities that often take a bit more time and can be a sign of stronger impact. How many “contact us” forms have been filled out? How many “webinar replays” are being watched. Set targets and measure performance against these impactful moments.
Listen for BuzzAre you monitoring your social buzz? There are plenty of inexpensive tools to help with this. Set goals on not only how much noise is out there but also how often a positive recommendation is made.
Don’t be Afraid to Dig DeepThere are many ways to measure ROI although maybe not as granular as in days past, but I might argue there are now even more ways to watch how marketing is impacting your business. But don’t let it stop there. Numbers are good but they don’t tell the full story. Pick a couple of great wins and dig in and understand how the purchase was made. Who was involved? What activities did they participate in during the sales cycle? Take some lessons learned and place these back in your plans for new marketing activities.
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