5 Key Marketing Metrics to Measure Success - Focus on Conversions, Not Volume
Many marketers focus on volume-based metrics to measure results which is like measuring Tom Brady's success based on passes attempted. Marketers need to go deeper.
Volume-Based Metrics do Not Equal Success
A marketer may walk into an executive meeting with a count of last quarter's new leads, website impressions and site visitors. However, these metrics are like passes attempted--you are actively in the game, but does that activity lead to success?
Do you think that the New England Patriots measure that Tom Brady attempted 582 passes last season? I'm sure that number is part of their analysis but the more important question is "how did those 582 passes translate to completions? To wins? To an eventual Superbowl victory?"
My point is that volume counts but it is only a small part of the overall story.
I'll hold off on any deflation analysis for this article.
Winning with Value-based Metrics
Today's best practice marketers go beyond volume-based metrics and focus on value-based metrics--what is marketing's value in driving revenue? According to Sirius Decisions, 67% of the buying process is complete by the time a prospect is ready to engage with Sales. These value-based metrics enable marketing executives to measure their impact on the bottom line.
Businesses will never have one report that tells the whole story--rather there are several reports that provide insight into a business's health. Here are a few your business might want to consider.
1) Marketing Contribution
What is marketing's contribution to revenue? At a high level, this report puts marketing at the revenue discussion table.
For example, marketing influenced $750 million worth of pipeline last year while helping close 65% of last year's $150 million revenue number.
Those are powerful numbers for any marketer to share at a quarterly meeting.
2) Marketing Program Success
Your company is spending money on marketing but is it spending the money wisely? This report enables marketers to gain insight on their most/least impactful marketing programs.
For example, of the 1,000 people who stopped by a trade show booth, how many signed up for a follow-up demo (as opposed to stopping by for the free t-shirt)?
3) Opportunity Influence (AKA "Closed-loop Analysis")
Here, we get to insight nirvana by tying marketing investment to revenue. These reports allow marketers to make better decisions on where to allocate marketing dollars based on opportunities created and deals won. The insights also help organizations justify additional funds when making budget requests.
For example, if two trade shows cost the same but one helped convert three times the amount of opportunities, a business might consider reallocating budget for next year's events.
4) Lead Funnel Analysis
Every business has some kind of funnel where leads turn into customers. These reports put metrics around that funnel to find gaps and improve conversation rates.
For example, is an organization converting marketing qualified leads to won business at a 100:1, 50:1 or 25:1 ratio? The lower the ratio, the better the return on marketing investment.
Funnel reporting is one of the more difficult metrics to measure as it requires an excellent sales and marketing alignment, and a clear definition of terminologies. These take time to put in place.
5) Acquired versus Influenced
These reports help business understand what programs are driving acquisition versus the ones that are influencing deals. To summarize, "acquired" means first touch-there can only be one. "Influenced" means the touch could have happened anywhere along the funnel process.
For example, trade shows generally bring in many new names (acquired). On the other hand, webinars usually bring in fewer acquired leads but are effective at influencing leads already in the lead pipeline. Businesses need to measure the success of each.
Your Steps to Value-Based Metrics
Companies have historically focused on volume-based metrics because they are easy to understand and relatively easy to obtain. Like measuring Tom Brady's impact to the New England Patriots' success, value-based metrics are a little tougher to quantify.
In my experience, the transition to value-based metrics takes anywhere from three months to over a year--don't expect overnight success. Once your business decides to make the switch, you can begin the journey to creating a repeatable and measurable business model.
Jeff Coveney is an accomplished marketing expert with more than 20 years success in generating demand and creating buzz for leading technology organizations. Jeff is the founder of RevEngine Insider blog and regularly consults via RevEngine Marketing. Jeff is also recognized by Marketo as one of its fifty worldwide Marketo Champions.