Posted by Alden Cushman on Fri, Aug 27, 2010 @ 10:37 AM
We've all suffered through one of those conversations with an endless series of questions: “What are you doing? Why? What are you doing? Why?....” As many know, sometimes the only way to end the cycle is to answer with: “Why not?” Well, during the past year we've noticed a somewhat troubling trend in marketing data reporting questions that sounds a lot like “Why not?”
We start by identifying the drivers of this behavior. Four market forces are pushing most marketing organizations to improve and increase their reporting of marketing metrics and key performance indicators (KPIs):
- Increasing focus on marketing ROI
- Improving marketing processes and skills
- Increasing implementation of marketing automation platforms, and related systems and tools
- Increasing number of marketing service agencies that report campaign and program ROI measures
One of the interesting, and some might say unfortunate, consequences of being able to track the results of marketing campaigns, programs and tactics is the desire to search for answers by analyzing and reporting as much data as possible as often as possible. Senior management demands better information and intelligence to make better business decisions and improve results. However, since many companies (especially public ones) run on a quarterly cycle of reporting financial results every three months, many marketing groups have adopted the same reporting mentality.
The biggest problem is that most of our B2B clients have marketing and selling cycles that last well beyond three months, so they are reporting on marketing lead generation and nurturing activities that do not fit neatly into a quarterly view. The result is usually a potpourri of misleading conversion ratios between program response rates, inquires, marketing qualified leads, marketing sourced pipeline, marketing influenced pipeline, and a handful of other measures. We don’t advise that marketing groups refuse requests for quarterly or even monthly data, but do yourself (and senior management) a favor and put it within the context of the company’s regular marketing and selling cycles.
Begin by uncovering the decisions senior management is wrestling with and use those to determine which marketing metrics and KPIs impact them the most. Don’t measure and report on everything you can. Generating pages and pages of marketing activities only confirms what many senior managers believe, that marketing has no idea how to prove its return on investment. Report on fewer items and make sure to compare last quarter’s marketing metrics and KPIs to the same quarter of the previous year; don’t compare them to year-end numbers. Prove to senior management you understand their underlying business issues, you are investing in campaigns and programs designed to address those issues, and you can report the right indicators in the right timeframe to show concrete positive results.
Posted by Jonathan Block on Fri, Aug 13, 2010 @ 08:13 AM
IBM has announced that it has entered an agreement to purchase Unica in a cash transaction worth approximately $480 million. As followers of SiriusDecisions are aware, we've been predicting the consolidation of the marketing automation platform (MAP) space for some time. While other acquisitions have occurred, albeit it on a smaller scale (even taking into account Oracle's purchase of Market2Lead's IP), this could be the tipping point we've been predicting. It's easy to overstate the potential for consolidation, given the relatively small size of the MAP market, but other vendors have certainly been shopping themselves and have most likely been pricing themselves out of consideration.
So what of this acquisition? IBM has been using Unica internally, and standardized on it as their MAP worldwide in 2009. While the timeline to complete such an enterprise implementation is long, IBM clearly saw the value of Unica's capabilities and the opportunity to enter the marketing automation game. In addition to its marketing automation solution, Unica is one of the leaders of what we call Marketing Operations Management (others call it MRM), which handles planning, budgeting, scheduling, asset management, and a host of other operations capabilities. Unica also has a Web analytics product, but IBM already has solutions in this area. According to IBM, it's the operations and MAP functionality they were after to bolster its own ability to offer an automated, cross-channel marketing solution along with key marketing process and operations capabilities.
This acquisition is positive and gives MAP customers a strong choice; it remains to be seen whether this is an enterprise choice only or if it will be palatable to smaller customers as well. The implementation portion of adopting a MAP (whether on-demand or not) is something few marketing organizations have the stomach for. Given that the MAP market consists of relatively small vendors, who have had to rely increasingly on their emerging partner networks as the pace of clients they need to install has outpaced their internal resources capabilities, the combination of Unica/IBM technology along with IBM's vast services groups could help accelerate MAP adoption, certainly for larger organizations. So will this acquisition start a domino effect? Most likely, but the row of dominoes is fairly short. The real question is will those seeking to acquire a similar vendor buy one that offers the full complement of operations, analytics and MAP capabilities (such as Aprimo or Neolane) or one that focuses on the MAP side (such as Eloqua, Marketo, Silverpop or Manticore Technology)?
Posted by Jonathan Block on Wed, Aug 11, 2010 @ 10:42 AM
We've seen it happen in the realm of demand creation; marketers have realized that being more analytical about their activities has led to more measurable results. Understanding your marketing data leads to better targeting, segmenting and the more optimized pairing of tactics and offers to drive better results throughout the waterfall. More and more organizations are realizing the importance of the marketing operations role to make this a reality.
Now it's time to see a similar role (and more) that applies the same analytical discipline to the seeding of demand, typically the responsibility of the reputation function in driving engagement and awareness. When it comes to social media specifically, we continue to see a lack of insight and analytics both in the processes companies use to measure and in the capabilities of the technologies that are designed to assist in defining, collecting and analyzing metrics without employing expensive services. You may gain some depth of information regarding your share of voice, sentiment and engagement, but how wide does this knowledge go and what is it telling you about moving the needle for driving business?
Organizations need to take the solution into their own hands. Whether social operations becomes a specific role or a responsibility spread across a number of employees, the key is to take all the data and metrics you can collect to follow the social media breadcrumbs and connect the dots in ways that existing technologies and agencies can't provide beyond traditional brand measurement. Sure, it's useful to understand the demographics, habits and preferences of your networks and communities within Twitter, Facebook and LinkedIn, but you need the insights that go across these multiple communities (and more) to not only better understand and serve your customers and prospects, but to be able to market to them more effectively as well.
So, who is responsible for social operations within your company and how do you see such a role evolving?
Posted by Megan Heuer on Fri, Jul 30, 2010 @ 09:00 AM
Are your marketing programs attracting the right kinds of prospects? Only your data can tell you. While it’s tempting to stop at reviewing email response rate, opt-out percentages or unique visitor growth on the website, understanding and optimizing B2B marketing tactic effectiveness requires a little more digging. You need to look into the details behind those numbers and how tactics impact the overall health of the contact database. Here are some guidelines for using the contact database to shed light on what works and what doesn’t.
Define Who You Need to Attract. It’s hard to know if a tactic is encouraging interactions with the right contacts if a clear goal has not been set as to who the desired audience is. Who exactly is your desired audience for the tactic and what goal are you supporting with them? One this is defined, if you are pursuing an outbound tactic, take a look in your database to see how many of these individuals you already know. If the universe in there is smaller than you know it to be, consider targeted contact acquisition. If the tactic is inbound (meaning not sent out to specific names but positioned where the right kinds of contacts go to encourage them to respond and identify themselves), then define the baseline of contacts that meet your criteria so you know when additions are made. The initial goal is to estimate a rough size for the segment you want to reach and what percentage of it you already know so it’s clear when gains or losses happen in the database.
Build a Segment Data Snapshot. For your target segments, track overall contact gains and losses monthly to see what the net impact of marketing programs is on building the contact database. As part of your normal database reporting, compare the number of names and the percent of total database added each month (de-duped from existing contacts) to the number of contacts lost or no longer usable. This not only shows whether the database is growing or shrinking, but at how rapid a pace movement is taking place. The calculation also can be used to determine incremental return on investment for specific addition efforts; for example, a demand creation program might contribute 100 leads, but if it also added 500 new names to the database and helped with the completion of 250 more records as well, there is incremental value that should be identified and reported.
Put together, these elements provide a warning system for changes that could hurt down the road. They’re also a way to identify highly successful approaches that should be shared and emulated to boost others’ contact acquisition results.
Posted by John Neeson on Wed, Jul 14, 2010 @ 10:06 AM
Well it's that time of year again. Many of you will begin your annual planning for 2011 or are well on your way to creating your budgets. This is the time of year where we do many budget benchmarks to show you trends in marketing spend that are often used to support the changes you are looking for. As we consider the improvements we have observed in sales and marketing alignment, here are three best practices to consider in your plans:
- Create a “menu” of programs sales is requesting. Very often marketing focuses on the top-line programs but not what they manifest into at the sales level. Build out the programs you will need in a menu model for sales. Include a description for each program showing what sales problem is solved with program and written in sales language not marketing. Show what will be on the menu for lead generation for new accounts, existing accounts, for sales enablement, and what will be done for targeting. Also show how the menu might be different by sales channel.
- Reverse the waterfall. Now with your menu created, determine the marketing requirements needed to achieve these sales programs. Establish what the number of leads will be, what marketing will source and what they will influence.
- Brand to demand ratio. Finally, determine what has been the ratio of awareness required to create demand. Look at what you've spent in years past on communications and advertising and see what the ratio has been for every dollar spent on demand generation, what has been spent in driving awareness.
Active dialogue is at the heart of B2B marketing and sales alignment, and fostering this dialogue should be a part of every planning process. Without using such a planning model as we've presented here, marketing is often left with assuming the impact that it can have on sales and, subsequently, the business.
Posted by Megan Heuer on Mon, Apr 19, 2010 @ 10:51 AM
One topic dominated conversations during my travels and on client calls the last several weeks: marketing tactic return-on-investment (ROI). This is hotly debated by analysts and consultants, not to mention pretty much anyone who has ever had to run or defend budget for a marketing program. Like any good question for the ages, the answer is “it depends,” but we can offer some clarity around what it depends upon and what can be measured.
Let’s start with the definition of a lead, because that’s where the ROI calculation trouble usually begins. For the record, we don’t believe every inquiry is a lead. It’s an inquiry, which means someone who has raised his or her hand to take some action you have made available. An inquiry can be anything from a newsletter sign up to a whitepaper download to an event registration and more. On its own, an inquiry does not signal readiness to buy, which means it is not a lead (yet). Our years of benchmark data show companies who treat every inquiry as if it is a lead and send it to sales do not perform as well as those who have a process to nurture contacts from inquiries until they are properly qualified and ready for sales. When marketing teams follow this pattern of sending every inquiry to sales, they reduce potential to deliver against goals in the most effective way possible, and by extension this reduces potential for sales to be more effective and efficient. Now in the rare case where an inquiry says “call me I’m looking to buy,” the qualification process is a lot shorter, but this type of inquiry is less common than, say, a whitepaper download. Case in point: this week alone I got two calls from companies after I completed forms to download whitepapers in which I clearly stated I was an industry analyst and not looking to buy. In both cases, a competent and polite sales rep called and asked me about my inquiry. If they had read the form, they would have known the call was a waste of time. Calls are not free, so sending an unqualified contact to sales also wasted money.
Based on this thinking, let’s tackle the tactic ROI question. Specifically, marketers want to attribute dollar return based on closed deals to a single tactic, when no single tactic deserves that much credit. If you know your sales cycle involves multiple touches from marketing before you can consider a lead qualified and ready for sales, then it is impossible to attribute revenue from a closed deal to any single tactic. Some systems are set up to attribute a first or last marketing touch to each lead that is passed to sales and that’s the tactic that gets credit for the close. This results in a flawed view of what really works because all you see is one touch, when in fact there may have been tens of touches over a long period of time that in combination supported qualification of a lead. It’s just not that simple in B2B, and trying to make it simpler can hurt marketers’ ability to allocate resources. Instead, take a more realistic and practical view of the role of tactics by monitoring cost per response (from new or existing contacts) and cost per contact added to the database. Next look at the appearance of those tactics in the buyer’s journey. First look at the number of touches it typically takes to qualify and what those are, then look at the touches present all the way from qualification to close. This will provide a more accurate view of the relative success of various tactics vs. their cost. The key is not to confuse tactic ROI with overall marketing ROI, because doing so sells them both short.
Posted by Megan Heuer on Fri, Mar 26, 2010 @ 10:20 AM
If data is the lifeblood of demand creation, shouldn’t it have a heart monitor attached? I talk with many companies about their reporting and dashboards, and data is rarely part of the conversation. That should change. The best leading indicator of demand creation throughput is the effectiveness of tactics designed to add contacts to the database. When the focus is only on downstream results, including conversions and marketing qualified leads, it is more difficult to pinpoint problems upstream that clog the flow of data. Adding data to regular reporting allows another level of diagnosis, and some of the problems it finds can have a huge impact.
Take the case of an organization that invests heavily in inbound marketing activities to draw people to its website to request assets. The marketing operations team gathers reports from the web team, which show the number of visits to the site and the pages viewed. What they don’t see is how many of those web visitors hit a form page, completed the form, and were added to the database as marketable contacts. They also don’t see how many of the contacts who came in via inbound tactics fit the most desirable demographics for marketing to attract. Marketing ops may also get reports from the field marketing team or demand center, showing click-throughs and conversions on emails, and all leads created by campaign. They also don’t see how many of the individuals who clicked through an emails and saw a form, but did not complete it and were not added to the database; and if the name came from a list rental, then that’s money out the window. And, there’s no ability with this reporting to monitor on a cumulative basis how many of the most desirable contacts (or all contacts for that matter) are opting out and the impact that has on database growth.
The solution is adding at least one key performance indicator (KPI) plus a few key metrics around database health. Together, they provide the basic foundation:
- Net monthly database growth: Percentage of records gained minus percentage of records lost (opt-outs, bad data, etc.)
- Total percentage of usable records in the database
- Percentage of new contacts added each month
- Percentage of contacts lost each month, separated by opt-out/unsubscribe percentage vs. lost to data issues (bounce, bad address, etc.)
- Percentage of those who reach a form and complete it
If the organization described above was tracking these metrics, then the marketing ops team would identify the fact that specific web forms have low completion rates and need to be revised and tested for better results to improve database growth to take better advantage of good inbound traffic levels. They would also be able to see that specific inbound activities are attracting contacts from a different segment than the one intended. They might also sound the alarm on increasing opt-outs that appear to be tied to specific third-party data sources. This knowledge can save money and improve effectiveness, and that’s the definition of good reporting.
Your action item: Add data health metrics to your dashboard and let it be known the doctor is in.