4 tips for creating meaningful metrics for B2B marketing ROI
Are we measuring the right things? In order to truly prove marketing's value, we need to re-evaluate ROI metrics, argues Heidi Taylor
Demonstrating marketing value in B2B has never been easy. Yet the past few years have placed a microscope on our B2B marketing activities and we continue under increasing pressure to ‘prove’ our B2B marketing ROI. Every day it seems like we have new tools and technology that let us measure many, many more things we weren’t able to in the past.
Do these metrics matter to anyone but marketing?
I get it, we’d all love to quantify our marketing activity with a single number – this amount of marketing spend generated that amount of revenue. But ROI in the B2B world is not that straightforward. The sales cycle in B2B is most often a lengthy one, and there are many complex interactions that happen at all levels throughout an organisation before a sale is finally closed. Yet, within this context, the ways in which we are currently measuring marketing ROI isn’t giving us insight into these dimensions and it certainly isn’t telling us what percentage of sales revenue can be attributed to our marketing efforts, no matter the number of qualified leads we send along to sales. I even know of some marketers who are proudly signing up to revenue targets.
What on earth is that about? We are marketers, not salespeople. Furthermore, lead generation is just one aspect of marketing, a tactical, short-term activity that is designed to do one thing only – provide our sales teams with a pipeline of potential customers.
I’ve recently read 2 terrific articles that challenge what and how we are measuring our B2B marketing activity, both from The Marketing Practice (TMP). Paul Everett argues that one of our core metrics – MQLs – is simply not delivering. And David van Schaick goes even further:
"The results that really count are suffering at the expense of those we are too busy counting"
Without a doubt, marketing impacts the bottom line. Yet we are consistently failing to quantify or communicate our contributions to the business in ways that are meaningful and of value to the business.
What are we really trying to measure?
Some marketers make the argument that we have to measure what we can. But there's a fundamental flaw in this - just because we can do something, doesn’t mean we should. If we focus on meaningless metrics, we're in danger of neglecting those other activities – such as segmentation, positioning, awareness, and insight - that are marketing’s responsibility and critical to longer-term business outcomes.
Because we all know that numbers can be made to mean just about anything. I’ve worked with companies where every marketing campaign is a resounding success, and wow, do they have the numbers to prove it.
Which only serves to illustrate the worrying tendency to focus on those metrics that make marketing look good, instead of those metrics which might be the most meaningful for the business. We have completely lost sight of the fact that the purpose of measuring marketing ROI isn’t to ‘prove’ worth or value; it’s intended to help us make better decisions.
So, what should we be measuring and how do we translate this into information the business understands and values? Definitely not an easy question to answer, but the first step is to stop talking about marketing outputs and start talking about marketing outcomes; in other words, about what we’re actually trying to achieve.
4 tips for creating meaningful metrics for B2B marketing
1. Change the conversation
Have profoundly different kinds of discussions with our B2B stakeholders about what marketing success looks like, for them – both in the short term and the long term. Instead of starting with what we can measure and ‘explaining’ to the business how that ‘proves’ our value, start with a completely different conversation about business goals and objectives.
2. Agree up-front what measures and metrics are meaningful
I speak to a lot of marketers who are asked to justify their activity and thus their marketing spend after the fact or on ad hoc basis, which always catches them by surprise. They then rush around ‘proving’ ROI by hyping numbers that are simply not understood or valued by the business. Metrics by themselves are meaningless if we can’t connect them to what’s important to the business.
3. Create a standard measurement framework that’s used by everyone
The reporting format or frequency doesn’t matter, as long as it’s agreed with the business and used by everyone. Most business stakeholders I know prefer a simple dashboard with a few key metrics that capture ROI at-a-glance, along with the contextual factors that underpin the data. No matter the framework, it needs to be embedded within and across the business, enabling both marketing and the wider organisation to see and understand marketing’s impact.
4. Choose the tools and stick with them
Choosing the technology and tools we’re going to use is the final component for developing meaningful metrics. But this has to happen after we’ve agreed what we’re actually going to measure and the framework in which we will deliver it. One of the biggest mistakes we make is that we start with the tool – what we can measure – instead of what we should be measuring; we then get distracted by the latest new tool that absolutely positively will measure our marketing ROI.
Ultimately, creating marketing metrics that matter means profoundly resetting the ‘value’ agenda with our stakeholders. By developing and agreeing on a simple set of metrics that will consistently provide real insight into what marketing is doing, we will be able to demonstrate the impact marketing is having with our customers and on our business. And maybe, just maybe, we will never have to have yet another conversation about the value of marketing within our organisations.
I explore these issues and more in my new book - B2B Marketing Strategy: differentiate, develop and deliver lasting customer engagement – now available from Kogan Page publishers and Amazon everywhere.