Soft marketing metrics don’t impress the CEO or CFO.
In most business-to-business vertical marketing segments, marketing is viewed as an expense on the balance sheet. One reason for this is that the justification for marketing has relied on soft metrics — awareness levels, brand recognition, website visitor traffic, target audience reach, etc. While these metrics are important and part of the marketing equation, they lack accountability for revenue generation. This reinforces the perception with the CEO, CFO, and COO that marketing is a cost center, not a revenue center.
Moving to a revenue center requires marketing execs to rethink their role and provide accountable metrics that contribute to company revenue.
Moving beyond soft metrics to revenue cycle metrics
Business-to-business marketers have their feet planted in two different worlds. One foot is in the traditional (and comfortable) world of paid media placement, ad campaigns, direct mail, trade shows, and public relations. These tactics yielded soft metrics and worked to exclude marketing from the revenue generation conversation. Because of this, marketing became the stepchild of sales. It was easy to see the expenditures and hard to justify the results.
The other foot is in the digital world. In this world, everything can be measured, tested, and scrutinized. This can be an uncomfortable place because there is nowhere to hide. However, it does present the opportunity for marketing to shift from a cost center to revenue generation center if it is properly planned, executed, and measured.
Where to start
Start small and plan the program with ROI measurement from the beginning. The goal is not backwards measurement to prove ROI but rather forward focused measurement that influences decision-making.
Don’t try to measure all things. Because digital has a lot of moving pieces, select areas to measure that contribute to profitability.
Plan and establish ROI estimates upfront. Consult with management team members that have a negative view of marketing, and build their pessimism into the marketing forecast. Remember, there is nowhere to hide and it’s all about making better marketing decisions that lead to revenue generation.
- Select 3 to 5 key metrics
- Measure success versus goals – good, bad or ugly
- Drill down – measure every campaign, channel, sales rep, and region
- Track tends over time
- Create a dashboard that shows what marketing is achieving and contributing to revenue results
Very few small to mid-sized B-to-B brands have a 100% digital customer base. Many marketing automation programs (MAPs) lean heavily on online lead generation as the basis for marketing ROI planning. Small to mid-sized brands may struggle with this due to the size and sophistication of the markets they serve. Therefore, it is incumbent on marketers to identify digital initiatives that lend themselves to ROI measurement and revenue planning.
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