Fergus Gloster, managing director EMEA, Marketo
B2B marketers should share just two categories of metrics with senior management if they want the respect of the CEO and CFO: revenue metrics and marketing programme performance metrics, which document the impact of effort and investment and directly link it to revenue and profit.
These kind of metrics enable marketers to speak the financial language of business. When it comes to marketing metrics, there are five key areas where things can often go awry and complicate forecasting…..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. Typical examples include the number of Facebook likes, Twitter followers, and names gathered at a tradeshow.
Measuring what is easy – When it is difficult to measure revenue and profit, marketers often end up using metrics that stand in for those numbers. Whilst this can be acceptable in some situations, it raises the question in the mind of fellow executives whether those metrics accurately reflect the financial insight they really want to know about.
Focusing on quantity, not quality – Focusing on quantity without also measuring quality can lead to programmes that look good initially but don’t deliver profits.
Activity, not Results – Marketing activity is easy to see and measure, but marketing results are hard to quantify. In contrast, sales activity is hard to gauge, but the results are easy to measure. Little wonder that sales gets the credit for revenue, and marketing is perceived as a cost centre.
Efficiency instead of effectiveness – Paying attention to the difference between effectiveness metrics (doing the right things) and efficiency metrics (doing – possibly the wrong things well). Having a packed event full of all the wrong people doesn’t do any good at all.
As the function that “owns” the relationship with early stage prospects, marketing is now responsible for a much greater portion of the revenue cycle than ever before. According to a recent report, 70 per cent of the buying process is now complete by the time a prospect is ready to engage with sales. When executed well, revenue starts with marketing. Yet many marketers think of marketing ROI as reporting on the outcome of their programmes, often in the form of monthly reports. In my opinion, CEOs and boards don’t care about the majority of the metrics that marketers track, but they do care about revenue and profit. The right metrics and marketing analytics will empower you to move from historical, backwards looking measurement to decision-focused management.