The following was previously published on the Marqeu blog:
As marketing execution in 2020 gets into full swing, marketing analytics continues to be the top priority for organizations.
To drive long term success, marketers now are adopting the mind-set of a CFO to establish marketing as a driver of value and revenue-driving function. Expectations have changed a lot and the marketing leaders who are adapting to this new marketing paradigm are leading the charge to transform their organizations.
Such modern marketers incorporate analytics rigor as well as revenue mindset for every decision they make. They demonstrate that marketing led by a growth mindset is accountable for driving the top-line revenue. Data-driven CMOs are increasingly relying on marketing analytics teams to lead the charge for demonstrating the quantifiable impact marketing organizations are making.
The most common ask from the marketing leaders these days is to demonstrate the quantifiable impact that their organizations are making on the pipeline. Given the growing scrutiny around marketing budgets and the asks for returns from the marketing spend, marketing performance insights not only empower marketing leaders to have data-driven conversations with the c-suite, inspire/reward their teams based on performance but also optimize the execution of their strategy.
As the importance of marketing analytics continues to grow, the number of metrics that are available for marketing teams to track is growing exponentially as well. Whether it is digital marketing, partner marketing, demand generation, events/field marketing, every marketing organization has a set of “Strategic Metrics” (with different definitions, unique to how a company operates) that it tracks to measure performance.Combination of such metrics makes up the key levers that they can pull to accelerate the performance and understand what is working
Across all our marketing analytics engagements at marqeu, we have been building marketing BI, data warehousing infrastructure (using popular tools like Amazon Redshift, Snowflake, Alteryx, MySQL, Periscope, Looker, Tableau, DOMO, PowerBI) and self serve dashboards that enable tracking of these metrics on an on-going basis. Though the definitions of such metrics vary there are 5 broad categories of metrics that define Marketing Analytics and ROI.
Volume and Quality: the only way to influence new deals is to have the right customers and accounts engage, actively qualify and nurture them before they are handed over to sales. Goals are the key drivers to ensure that marketing organizations put together aggressive plans for driving such engagements. To make sure marketers have real-time visibility into the performance against goals, we have designed a framework to track the actuals against goals.
Cohort-Based Demand Waterfall Conversions
While new engagements are focused on driving top of the funnel volumes, it is the“cohort-based” demand waterfall conversions that determine the quality of these engagements. Demand Waterfall conversions generally track 4 KPIs with some degrees of variation – Leads to MQLs, MQLs to SALs, SALs to SQLs and SQLs toDeals. These 4 KPIs provide insights into efficiency across the funnel and help with accelerating deals.
Influenced and Sourced Pipeline
Driving a new pipeline has always been the most important KPI for any marketing organization. The importance of demonstrating how marketing is impacting the pipeline has grown manifolds in the recent times. The 2 commonly used metrics that demonstrate the impact of marketing are Marketing Pipeline Acceleration/Influence and NewPipeline Sourcing With these 2 metrics, organizations can quantify marketing-driven engagement across the accounts and relate them to the impact on pipeline. These pipeline correlations of the marketing activities provide valuable insights when it comes to understanding “when” the new opportunities were created in marketing engaged accounts and for the accounts with existing opportunities, how marketing was able to influence deal expansions and accelerate deal closures. These 2 KPIs provide a foundation for marketing leaders to have impactful conversations with their sales counterparts. At the same time, these KPIs are very influential when it comes to evaluating the market mix across marketing tactics and channels in different phases of the buying cycle.
We live in a world wherein a multitude of marketing tactics and channels are used by organizations to engage with customers. For every deal (especially in the enterprise space), countless marketing touches are involved from web engagement (visits, clicks) to email engagement, webinars, e-books, white papers, in-person events and the list of all the touches goes on and on. While all such touches have a varying degree of influence on the deals, they all come at a cost from the limited marketing budget. It is not fair on part of marketing leaders to allocate their budgets to different tactics without having access to the insights around how these tactics perform. Gone are the days when a marketer could just go about doing budget allocations based only on what she “felt” was right. Finance and sales organizations expect marketing leaders to make smart decisions when it comes to budget allocation and more importantly within the marketing organizations, the leaders increasingly want to feel confident about these decisions because it is these decisions that will help them meet their pipeline goals. This is where multi-touch campaign attribution comes into play and it is the most valuable of all the KPIs as it powers the marketing investment decision making which in turn drives the results for the marketing organization. Whether it is the FirstTouch, Last Touch, Multi-Touch, Equal Weight Multi-Touch or Weighted approach to marketing attribution, when implemented correctly and validated, the insights provided are of immense value for the marketing organization.
Customer Life Time Value (LTV)
This metric is increasingly getting traction across SaaS companies and especially being looked at more closely for long term Marketing ROI calculations. It is defined as the total amount of revenue expected off of new customers over a lifetime. Given that the probability of getting more revenue from an existing customer is almost 3x as compared to a new customer, the value of managing customer churn is driving the LTV higher in pursuit of higher ROI.
Modern marketing technology and analytics platforms have made it easy to actively track marketing spend (building budget tracking apps within the CRM platform instead of buying additional tools), engagement with the marketing programs and the pipeline associated with those engagements. With the right analytics strategy and tools, we work with marketing leaders to empower their teams with these critical data points so that each team member can actively contribute towards fostering a data-driven culture within the organization. These KPIs provide strategic insights to the marketing leaders and CMOs so that they can confidently demonstrate the impact that their organizations are making and help foster a strong working relationship for marketing within the c-suite, especially with the CFOs.
We are always on the lookout for inputs and examples from the marketing community to keep adding value for our customers. We welcome the inputs from other leaders and practitioners around growth the key metrics that leaders are using to demonstrate the impact marketing is making at your organization? What kind of questions do they get from the sales teams? What data points around marketing performance are shared with the c-suite?