Making a case for business-to-business marketing investment

Marketing execs need to provide accountable metrics that contribute to company revenue.

Marketing execs need to provide accountable metrics that contribute to company revenue.

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.

Success measurement

  • 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.

Additional articles you may find of interest on this topic:

Marketing Automation Platforms (MAPs)

Big data and creativity

People-to-People Marketing and “Small Data”

Please leave your comments or thoughts below.

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Marketing Automation Platforms (MAPs)

Blog_110_Marketing Automation Platforms

MAPs are a set of software tools with many moving pieces.

 

The promise of Marketing Automation Platforms is to integrate and automate marketing functions

Marketing Automation Platforms (MAPs) are receiving lots of attention in the B-to-B marketing sphere. Most of these platforms are targeted toward companies with large database records that execute the majority of their marketing efforts online. For originations that fit the aforementioned criteria, MAPs promise greater marketing efficiency, integration with sales CRM software, reduced external resource expenditures, and ROI tracking for each marketing event.

The strength of an MAP is its ability to capture digital transactional information for specific marketing actions. These actions can include the following:

  • Email opens, top performing links, and overall performance
  • Website visitation, visitor page interaction and analytics
  • Inbound marketing responses to posted content and landing pages
  • Social platform monitoring for sentiment and customer insight

These actions are generally considered first encounter lead generation activities found at the top of the sales funnel. It is at this junction that marketing and sales must agree on what a qualified lead looks like and what steps are necessary to move this lead through the sales funnel.

With the definition of a qualified lead identified, an MAP can provide the functionality to automatically continue to reach out to the prospect. As the prospect demonstrates intent to purchase, CRM software is able to provide sales with leads that require shorter close times and better success rates.

All of this sounds great, almost like push button marketing; however, there are several things to consider:

  •  MAPs are a set of software tools with many moving pieces
  • MAPs are not a substitute for a strategic marketing plan
  • Underestimating the amount of content required to shepherd the prospect through the sales funnel
  • The current marketing staff may not have the technical horsepower needed to manage the MAP
  • Time commitment and resources from IT will be needed for implementation, integration, and ongoing maintenance
  • Substantial learning curve and resources required for marketing and sales personnel
  • Implementation time of 6 to 12 months to see results
  • Identification of critical data chains for ROI reporting
  • Commitment from the executive wing to fund and nurture MAP implementation

MAPs focus is on digital interaction. What about traditional marketing and brand building? These software platforms are challenged to know what effect display advertising has with regards to purchasing behavior, brand sentiment, and brand loyalty.

Don’t get me wrong here. I see the benefit of ROI analysis and the positive potential MAPs can have when implemented properly. However, at the same time, I am also cautious about MAPS. My concern begins with the automaton nature of the entire process. The promise of inbound marketing is to engage with interested prospects and begin to build a relationship. Being inundated with additional email offers and qualifying phone calls can be a turn-off, stopping the relationship building cold. In addition, marketers must be cautious about treating prospects like Pavlov’s dog. Thinking that they can be trained to respond by redundancy is a danger.

Additional articles you may find of interest on this topic:

Big data and creativity

Determining Advertising Return On Investment

How to engineer a social marketing strategy

Please leave your comments or thoughts below
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Why ROI measurement for inbound marketing fails

ROI measurement fails to consider the shelf life of inbound marketing content

ROI measurement fails to consider the shelf life of inbound marketing content

Simple ROI measurement for inbound marketing fail to consider the shelf life of content

Here we are in the age of “Big Data” where everything can be tracked and scrutinized. For aviation marketers is means one more hurtle to jump when trying to justify investment of marketing funds for inbound marketing programs.

Traditional RIO measurement seems very simple – take the gain of the investment, subtract the cost of the investment, and divide the total by the cost of the investment.

ROI = (Gains-Cost)/Cost

This simple calculation comes up short in several areas:

  • How can you determine the value of a follower?
  • What’s the value of a blog response?
  • Is the content presented in such a way that it has an evergreen shelf life?

The value of a follower

What is a follower of your inbound marketing worth? Monetizing the value of a follower is subjective because we get into grey areas of determining worth. Does the content present the social face of the corporation? If so what is the value of good will towards the corporation? Does the follower reference the content in their social media network? If so, how do you calculate the value of reach from linked content?

Content shelf life

I like to think of inbound marketing content- blogs, white papers, e-books, videos and infographics as a conduit that provides a way to gain insight into the brand.  Produced correctly the content can influence purchasing behavior and have a very long shelf life.  This also throws a wrench in the traditional ROI measurement because the cost of producing the content needs to be measured over the time that the content remains relevant. For example, a video is produced about a new avionics component. The marketing expense to produce the video was $10,000. The video is placed on the corporate website and syndicated on various video sharing sites.  First year sales for the new component were $100,000 with gross profit of $40,000.

Traditional ROI measurement would look like this.

ROI = ($40,000 – $10,000)/$10,000 = 300% ROI

Now consider year two of the video investment with component gross profit of $30,000 and a marketing expense of $1,500 for website maintenance and syndication cost.

ROI =($30,000 – $1,500)/$1,500 = 1900% ROI

Inbound marketing measurement – ROI or VOI (Value of Investment)

As the examples above show ROI measurement can be can be modified to suit the situation -it all depends on what you include as returns and costs. Granted this a very simplistic view of ROI and there are more robust financial models available. That said, I’d recommend that a more accurate measurement: VOI = (Value-Cost)/Time

Another way to look at value of investment would be not to invest at all

This is another approach to determine the value of content. The internet is a crowed place with brands fighting for the attention of an over caffeinated, 140-character challenged audience. Their purchasing decision is neither entirely rational nor based on the lowest price. It can be influenced by website functionality, peer reviews, blogs, leadership papers and content that helps them select the product that is best suited to their need. If the brand is not active in this environment then it virtually invites the competition to gain the share-of-voice and increased exposure.

Additional Articles on this topic you may find of interest.

Big data and creativity

Big brother and marketing ROI

Why content development will drive the future of aviation marketing

Measuring Digital Display Advertising ROI

Please leave your comments or thoughts below.

Aviation Marketing: Big data and creativity

Creativity needs big data to define the landscape in which the brand operates

Creativity needs big data to define the landscape in which the brand operates

One provides tactical insight, the other the emotional glue

Big data is the buzzword of the day. The techno savvy number crunchers are heralding big data as an “end all, be all” for tracking RIO and determining which marketing initiatives to fund. I’m in agreement that big data, when properly interpreted, can provide customer insight as to the purchasing habits and the media channel that culminated the sale. No argument – this is valid tactical information and should be considered when planning marketing initiatives.

Big data has limitations

Big data interpretation is also influenced by what the interpreter wants from it. We all know numbers can be twisted to justify decisions based on the interpreter’s bias and ultimate goal.

Big data also presents a one-sided view of the transaction process. Yes, it can isolate the channel that the purchase was transacted through, but it cannot measure the cumulative effect of brand value and preference across all the marketing channels that led to the conversion.

Big data lacks soul

Dissecting any purchasing process has to take into account the emotional decision to consider the brand in the first place. This is where big data comes up short.

Purchasing decisions start by pinging an emotional need.  These emotions are what make us human and drive our wants, desires, and needs. Emotions are the glue that create an attachment to a brand and pique our curiosity to investigate features and benefits to justify the purchase.

Creativity needs big data and visa-versa

Big data is automated. It’s a logical path that turns creativity into a commodity. From automated ad purchasing programs to social media sentiment, tracking these algorithms can not detect sarcasm, joy, empathy or any of the other emotions we humans employ on a daily basis to communicate, cope, and justify our purchasing decisions.

There was once a time when creativity was celebrated. Good advertising built brands and created brand preference. It could sweep the nation with catch phrases and imprint the brand message in the minds of millions of potential customers.

Creativity needs big data to define the landscape in which the brand operates. Big data can help creative thinking by providing comparative analysis, insight into purchasing habits, and models of what not to do based on different scenarios.  Ultimately, this tactical execution may be big data’s greatest contribution to the creative process.

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