Measure what matters in B2B marketing: 4 tips for creating meaningful metrics
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 have been under increasing pressure to ‘prove’ our marketing return-on-investment (ROI).
I’ve just seen the latest Hubspot 2017 State of Inbound report and for yet another year - even with all the technology and tools we have for measuring our [inbound] marketing activity - demonstrating marketing ROI remains one of the enduring challenges being faced by marketers. Unsurprisingly, respondents found that inbound campaigns yielded higher ROI compared to outbound campaigns, yet a shocking 41% of respondents either could not answer the question or could not calculate ROI!
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 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 – in other words, into the kind of impact we’re making in our markets or whether we’re achieving the level of customer engagement we’re aiming for. And it certainly isn’t telling us what percentage of sales revenue can be attributed to our marketing efforts, despite the fact that some marketers are signing up to revenue targets.
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, in ways they understand.
What are we really trying to measure with our ROI?
Some marketers make the argument that we have to measure what we can, that even if we don’t have quite the right tools or metrics, we still need to measure our marketing activity. It’s hard to argue with that; we do, indeed, need to measure what we do. But there is a fundamental flaw in this argument - just because we can do something doesn’t mean we should.
Especially when it comes to data. 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? This is not an easy question to answer and it will differ depending upon organisational strategy and goals. But the first step is to stop talking about marketing outputs and start talking about marketing outcomes; in other words, start talking about what we’re actually trying to achieve in terms of overall business contribution.
Four tips for creating meaningful metrics for B2B marketing:
- 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.
- 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.
- 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.
- 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 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.