Why do good marketing metrics matter?

Metrics help you place smart marketing bets – no business has unlimited time, money, or human capacity. Marketing metrics help guide the resource investment strategy.

Metrics show accountability for investments – the marketing team needs to be a responsible steward of resources. 

Overcome Random Acts of Marketing^TM – take a pragmatic approach to marketing grounded in data. Executives need to feel confident about where they’re placing their bets.

What do CEOs ultimately want from marketing when it comes to understanding ROI?

CEOs want to know the return for every dollar put into marketing – execs often describe marketing as a black hole they throw money in. They want to know for every dollar they put into marketing, how many dollars come out the other side. 

CEOs want predictive confidence – CEOs want a level of predictive confidence in investment results (not just unstructured data). It requires data maturity to get here.

CEOs need to understand  “the big three” metrics:

1. Time to close
2. Customer acquisition cost
3. Customer lifetime value

Marketing is a mix of art and science – marketing leaders need to translate the creative world of marketing into practical business terms that executives understand. Leverage metrics to demystify marketing.

What are the “big 3” revenue metrics?

TTC: time to close – how long does it take to move a customer through your deal pipeline–from a lead to a win? 

CAC: customer acquisition cost – how much does it cost you to get a new client? Add all spend on new-business sales and marketing campaigns and staff, then divide that by the number of new deals won in any period. Spend on account management/client expansion sales don’t factor into CAC. 

CLV: customer lifetime value – what is the revenue or profit from a customer over the lifetime of the engagement? In the B2B world, CLV is influenced by retention, upsell/cross-sell, and subscription/retainer value. 

It takes a critical mass of sales to have useable metrics – in the seed stage, nothing is structured. You might be selling 50 ways to 50 buyers and you won’t have useable data. 

Use these metrics to create a baseline – every company’s performance will differ. If you’re selling six- or seven-figure deals, you’ll have a longer deal cycle; selling at the enterprise level takes longer than selling to small businesses. Use these metrics to set a baseline performance for your business. 

Then, leverage these metrics to find available growth opportunities – the big 3 metrics provide the levers you can pull to improve profitability and induce healthy growth. Monitor these metrics to find ways to continually improve–Shorten the deal lifecycle, remove transaction friction, figure out how to drive down CAC, etc.

What are the stages of marketing data and reporting maturity?

1. Non-existent – in the beginning, you don’t have any data. You have a hypothesis and you’re starting to do marketing activities. 

2. Unstructured – data is starting to come in, you can start counting things like sales meetings, and leads, but it’s likely very unstructured. It might be in employees’ brains or on hard drives

3. Baselined – you’ve put essential processes and systems in place so you can establish a baseline of collected data. You can look at how leads are progressing through each stage of the sales process. This can take a couple of years to get here, and it requires that you have a go-to-market focus. 

4. Informative – data starts to become useful information. But your use is limited to the reactive surfacing of information. The right questions might not get asked, or there hasn’t been enough analysis of the right data criteria. 

5. Insightful– there is now enough data and information that you can ask a question and get back an actionable answer.
   • Note: this can take a year after you are baselined.
6. Predictive – you have enough information gathered consistently over time that you’re able to thoughtfully predict future outcomes when evaluating investments.

See the full Authentic Brand Maturity Matrix here:

In an ideal world, every company should invest in a CRM and website with data analytics early –  most startups do a poor job of putting systems in place to capture data on day one. Ideally, startups should gather and structure data on all touchpoints and contacts that comprise the relationship network of the business. You need a strategic mindset for growth and the rigor to put technology in place with processes before you can expect your data to be useful.

Get clarity on your business before you can get clarity from marketing data – most startups go through a phase of experimentation—trying different buyers and sales scenarios. Getting to baselined requires narrowing on a go-to-market focus. Then, businesses often gather data but don’t know what questions to ask. Get clarity on what you’re out to accomplish. From there you can start to ask informed questions about your data.

Who is responsible for marketing data and reporting? What roles do the head of marketing, demand gen, and marketing ops play?

CMO or Head of Marketing – reports to the CEO, translates the big three metrics, and identifies opportunities for improvement. They can offer strategic views on changes in the market. The head needs to deliver the big picture through the fewest number of metrics possible, then give recommendations that impact the go-to-market focus. 

Demand gen, or marketing ops – manage and measure performance and engagement of campaigns, channels, and content. They manage individual pieces of content, real-time engagement, incremental conversion, and points of engagement. They may also use tools to measure market sentiment. 

A smaller organization might just have a marketing manager or coordinator – this employee would centralize all marketing program execution, but should not be expected to be an expert at all marketing disciplines, nor be able to bridge from high-level executive strategy to ground-level tactics.

Augment the team with third-party agencies/contractors – in a given year there may be 5 to 50 different marketing capabilities needed. Nobody can develop all of these capabilities internally. Agencies and other third parties provide ninja capabilities that your company needs. But agencies shouldn’t be in charge of your whole brand.

Information & Data

What’s the difference between information and data?

Once you start collecting, you have data but it’s useless by itself – if you put systems in place to collect website visits, sales meetings, etc., you will have data but it’s just numbers or checkmarks without the necessary context to offer value to your organization. 

Information has a story, it answers a question – data can be shaped into information that answers a question. Information is the translation of data into an actionable takeaway. You have to ask the data questions to understand it.

What data do you need to track key marketing metrics? How do you collect it?

Three tools comprise the pillars of centralized marketing data and intel for most B2B organizations: a CRM, a marketing automation tool, and website analytics. 

CRM:

Your CRM will track everything related to relationships in your business: 

• The number of touches 
• The depth of an individual’s engagement with your marketing programs
• How engagement turns into leads and opportunities, wins and loss
• The length of time in cycle
• Annual contract value

Marketing automation:

Your marketing automation ties into your CRM – it is an amazing vehicle to tighten up your brand, experience, and story. Most businesses only use ~10% of the capability of a real marketing automation system. 

High-level view from marketing automation tool:

• Form fills/subscribers/inquiries
• Email opt-outs or unsubscribes
• Cleanliness of database/hard bounces
• Email and campaign performance
• Landing page conversion performance

In-depth view from marketing automation tool: 

• More in-depth understanding of customers and content
• Understand segmentation of customers and segment-specific engagement
• Content performance by stakeholder groups
• Trigger custom follow-ups from prior interactions 
• Nurture actual relationships – drive people further into the funnel, and produce deeper conversion to your brand. Understand what is and isn’t working.
• Customer 360 perspective – know each customer and their engagement on a personalized basis and how engagement translates into a purchase, retention, etc. 
• Account-based marketing – know key accounts and their interactions with your brand.

Instead of a marketing automation tool, less sophisticated orgs may use an email platform like Mailchimp:

• It pushes emails communications with simpler functionality
• Offers a similar high-level view of engagement as marketing automation 

Website analytics: 

Your website will show you leading indicators of engagement – it’s not going to answer many of the story questions, it will just show general growth and engagement trends, and how content is being consumed. It can help determine what content matters: 

Placeholder

• High-level view from website analytics:
  • Total page views 
  • Average page views per visitor
  • Bounce rate (what % of people hit your site and leave without engaging)
  • Length of time on the site
• In-depth view from website analytics: 
  • How specific portions of the site are performing
  • Depth of visitor engagement with content
  • Visitor geographic data
  • Visitor devices in use and the devices the site is optimized for 
  • Visitor conversions on the site using forms

You also need to procure information from partners – if anything is running on a platform you don’t own, like paid media or using an agency, the resulting data needs to be aggregated and translated back into the marketing team’s performance landscape. 

What data do you need to track the effectiveness of particular channels and campaigns? How do you collect it?

Some channels offer more control and visibility of the data than others – if you don’t have visibility, you have to be thoughtful about approximating it–for example, if you sponsor a trade show and send reps, collect details afterward to approximate ROI. 

Connect the dollars you spend to the dollars that came back into the business – you know your marketing touched human relationships and these humans are making buying decisions.

What tools do you need to collect and store it?

There are six stages to your technology setup: 

1. Basic – a startup MarTech stack
2. Ad hoc – you fix what needs to be fixed in the moment, you’re reactive
3. Stopgap – you glue pieces together so the pieces of your stack can talk to each other
4. Integrated – you’ve integrated your toolset with intention to optimize performance
5. Automated – you can execute processes without human touch
6. Optimized for scale – your stack is mature and there aren’t redundancies, you’re not paying for things you’re not using, and you’re using the majority of relevant features

Begin on a startup mar-tech stack – a typical unfunded startup is going to have something like a low-cost/no-cost CRM, Mailchimp for Email, and Eventbrite for events.  

Then, migrate to a more advanced CRM – move to a CRM like HubSpot with dashboards and customizable reports. All of your data history is in a single place and can be turned into information and insights. 

Tools you’ll need include: 

• CRM – this is going to be the central source of truth for any organization. 
• Marketing automation (once you’re mature enough) – you need enough relationships and enough data creation to merit the level of investment. It makes a difference if you’re getting highly invested in content and thought leadership. 
• Website analytics – for example, Google Analytics.

Reporting

What should you report within the marketing team?

At earlier stages, you’ll measure behavior and not outcomes – gather data and create baselines. At an early stage, your dashboard might be as simple as “how many Contact Us form fills did we get?” and “how many case studies are we going to produce this quarter?” 

As you mature, get into more complex analytics – you might start to report on things that refer to your now established baselines, like average deal cycle, the performance of specific campaigns and channels, etc.

Every team will have a different dashboard – this will depend on their media mix and go-market-strategy. 

Your marketing team needs to aggregate data from all campaigns – you need to gather the data on all content, campaigns, and channels. Then, work to understand how everything adds up to move the needle or not. 

What should marketing teams report to their company’s leadership team or board?

The business strategy determines what execs want to look at – common items to report on include: 

• The big three metrics –  lean on time to close, customer acquisition cost, and customer lifetime value metrics. 
• Health of the pipeline and changing dynamics – if the health of the pipeline is going to slow down, you need to explain why engagement is falling off.  Explain what indicators will help you stay ahead of the curve.
• Demonstrate marketing’s contribution – communicate revenue or deal numbers that can be attributed to marketing as an original source and/or key influencer.
• Speed of deals through cycles – report on how long it takes to get leads through each stage of the funnel. 
• Overall customer retention and satisfaction – marketing should be collaborating across the organization, supporting customers throughout their entire lifecycle and should report their contributions for revenue retention and expansion. 

How should you report on your overall pipeline? What are the stages to define in your marketing pipeline?

You need to agree on what ‘lead’ means – many businesses make the mistake of tagging contacts or “suspects” as leads. This can complicate things within your CRM and marketing automation system. Before there are leads, there are two different types of contacts: 

• Suspects – someone who engages with content but doesn’t reach out; or someone the marketing or sales team has identified and thinks should be customers. These are to help foster your outbound sales engine. 
• Handraisers – contacts who have acted on interest in your company (downloaded a white paper, signed up for an event, scheduled a meeting, etc.).

There are several different stages of leads: 

• Marketing qualified lead (MQL) – a lead that marketing has vetted.
• Sales accepted lead (SAL) – lead reviewed by sales and accepted. From here, the lead starts down the sales meeting process and further qualification. 
• Sales qualified (SQL) or opportunity – the lead is moving towards a proposal or you’ve provided a proposal. From here, a lead either:
  • Moves to a closed loss – if the relationship breaks off for whatever reason.
  • Moves to a closed win – if the lead ends in a deal then it moves into trackable revenue. 

Most CRMs can help you grade and weight the stages of your pipeline – you want to know what share of your prospects will drop off through each stage of the pipeline. This will help you become predictive in your revenue and analytics. 

Ask for input from peers when analyzing your pipeline – talk to those with a similar business model for their input as you’re creating assumptions in pipeline analysis. They’ll have a sense of timing and help you set expectations.

Once you have real data, re-analyze the lifecycle of the pipeline – in the beginning, a lot of this may be assumption based. Use the actual data once you have it, then push your teams towards solutions to get faster and tighten things up. 

How should you think about lead sources and attribution?

Marketing can either influence or be directly attributed to topline revenue – for B2B, influence is much more realistic than direct attribution. 

A lot of businesses put too much emphasis on marketing as a demand-gen engine – they fail to see the many touches with your brand and content throughout the customer’s whole  brand relationship. Marketing ought to play a role throughout the entire customer lifecycle. It’s not just a direct line correlation to attribute specific revenue. 

Marketing needs to be funded and empowered throughout the entire customer lifecycle – marketing can create the right kind of content, programs, and events that support sales and delivery in maintaining and growing customer relationships. 

Don’t get hung up on whether sales or marketing gets credited for a deal – it culturally kills your revenue organization–both teams have to be collaborating on all deals and relationships. 

Pick a path (first touch or last touch) and stick with it when attributing –  it doesn’t matter as long as the conversion and retention happen. Pick one and measure consistently. In B2B, you’re going to have 3-7 stakeholders on every deal touching different places at different times. So as long as you’re hitting your goals, there is no reason to split hairs.

What tools do you need for reporting?

Have a centralized source of truth with inputs from data sources – dashboards can be created between your CRM and Marketing Automation tool. 

Keep the reporting to the CEO simple – it might be a PowerPoint of some metrics and headlines that you walk through. Most executives don’t want to look at your CRM and get into the weeds on all the data.

ROI & Budgeting

How can a CMO balance long-term and short-term ROI?

Think of marketing as both a checkbook and a long-term savings account – 

• Short-term checkbook – executing on engagement (visits, likes, clicks, shares) in the here and now: working on the pipeline and conversions. 
• Long-term savings account – brand building and creating trust for customer retention, satisfaction, referral, and advocacy.

How much investment (time and money) does it take to get an accurate read on the ROI of a new channel or campaign?

It will take 18-24 months to build out a new channel through various campaigns – this is the rule of thumb for B2B companies, because you won’t know whether a campaign is working until revenue is realized. You may see early signs of engagement and funnel movement, which is a great early indicator. But if your sales cycle is 6 months, you’ll need 6 months to get a win, and several months to a year to know if they were a quality client that renews. It takes time to gauge whether the customer lifetime value is worth your marketing. 

Too many companies spend time and money doing 90-day experiments – that’s not enough time to glean anything valuable. You’re better off doing nothing than a 90-day sprint and then a hard stop. Instead, expect to make many minor adjustments quickly based on what the data tells you. But stay the course long enough to vet the strategy. Marketing is never as fast as people want it to be. 

To get an early read, you can monitor leading indicators – there are early signs of performance that are channel/campaign specific.  For example, if you’re testing a paid tradeshow event, early indicators might look like this:

• Feedback from reps who attended 
• Traffic to the booth or hosted event
• Quality of conversations 
• Which competitors were in the room 
• How your brand presence compared to competitors 
• Number of sales meetings held at event or set as a follow up

Before investing, know what measures of success you’ll be looking at – you need to know how you’ll tell if the investment was worth it.

How do you set your overall marketing budget?

The sales and marketing combined budgets usually float between 10-20% of annual revenue – you can distribute spend between the two functions as your GTM strategy calls for it.

Look where you want to be in two years and invest to get there – in high-growth businesses, you need to invest into who you want to be in two years. So, you’d base your sales and marketing spend on 10-20% of projected revenue, not current revenue.

Your budget will ultimately be determined by: 

• Ownership appetite for investment 
• Capital available 
• Company’s expected pace of growth 

Think of sales and marketing spend in conjunction – if your marketing programs are running and productive, you might change your sales structure to cost less and move dollars into marketing. But if you start out generating most of your revenue from sales, you can’t downsize your sales team while you’re building marketing and still expect to hit your revenue targets.

How should you allocate the marketing budget across headcount and different channels and campaigns?

Have an experienced marketing leader who can guide you through investment – too many businesses throw money away on random acts of marketing. Someone needs to be there making pragmatic decisions on what marketing investments you’ll say yes and no to.

Spend on campaigns vs. staff will depend on your marketing strategy –  if most of your marketing traction is via paid media or referrals, you may not need a lot of staff. If most leads come through owned media, you need to invest in humans to orchestrate content.

Invest more in your marketing winners – divest from channels and campaigns that are underperforming and pump more dollars into the top performers. Similar to how managers need to let low performers go to create bandwidth to support high performers and hire more A players, marketers need to cut low-performing channels to tighten focus on the most promising ones.

Be mindful of seasonal and economic volatility- in situations of volatility, do your best to base current decisions on past performance and future indicators.

What tools do you need for ROI tracking?

Calculate lifetime customer value – to get the whole picture, you need data from your CRM and potentially inputs from your finance team, invoicing, or customer service. This will help you get to how many dollars out per dollar in. 

You need dashboards that do conversion math for you – this way, you can easily see what percent of leads are converting and for how many dollars.

Top Takeaways

What are the most important pieces to get right?

Have patience – it doesn’t mean you stick with the same thing forever, but you’re patient enough to see the fruits of your labor come through (remember, it can take 18-24 months to be truly confident about the results of B2B marketing strategies and new channels).

Find the right marketing leader – you need the right leader who can grab your goals and vision and then help you place your bets and hold teams accountable.

What are the common pitfalls?

Attempting to build a marketing team without knowing marketing – often, companies without marketing leaders try to build out a team of marketing specialists but end up hiring the wrong people or mismanaging them. Carve out a role on your executive leadership team for marketing that’s separate from sales. 

Don’t outsource your entire brand and marketing experience to agencies – agencies are necessary, but can’t outsource your brand and customer experience to an agency.