In our recent webinar, Adam Mincham from Merkle and Darin Hicks from Hive9 provide insights and suggestions for establishing a framework for marketing performance measurement that drives improved results.
While almost every marketing organization is measuring marketing performance in some respect, we can all benefit from a better approach to B2B marketing performance measurement. You should watch the full webinar to get the breadth of wisdom and knowledge they had to impart, but we’ll provide a little taste of what was covered for you in this blog recap.
The Demand Center Concept
Adam started by explaining the demand center concept used at Merkle.
The demand center is made up of:
- Revenue goals
- Business Drivers
The team at Merkle works to understand what they need to put in to their marketing efforts, in terms of factors like budget, technology and personnel resources, to produce desired results. The goal of the demand center model is to make the connection between what goes in to the demand center and what’s produced from it to better see how their actions and budget spend are contributing to meeting their goals.
Marketing Performance Framework
For the demand center model to work, they need to have a solid measurement framework in place. That’s where their marketing performance framework comes in.
Start with a KPI Framework
Developing your marketing performance framework should start with determining your KPIs (key performance indicators). All KPIs are metrics, but not all metrics are KPIs and understanding the difference is important.
The main differentiators that make metrics KPIs are that they’re always:
- Directly linked to strategic directives
- Part of a multi-dimensional assessment of your organization’s performance
Figure out which of the metrics you’re tracking now measure the specific goals you’re trying to reach, then you can move on to the rest of your marketing performance framework.
The Three Tiers of Marketing Performance
The marketing performance framework is made up of three tiers.
Tier 1: Business Outcomes
The primary purpose of tier one is to effectively measure how marketing contributes to business outcomes.
The main goals of this tier are therefore to represent how effective your current marketing efforts are and measure the size and health of your customer base.
To do this, the main KPIs you should track and pay attention to are:
- The amount of revenue coming in
- How long it takes and how much work is involved in acquiring new customers
- Customer retention
- CLV (customer lifetime value)
This is the tier that helps you tie all your marketing metrics to the big picture that matters most to your c-suite.
Tier 2: Diagnostics and Comparisons
The primary purpose of tier two is to make sure you have the proper measurements in place to determine how well your efforts are paying off and see how different campaigns and tactics compare to each other in the results they bring in.
The main goals here are understanding the effectiveness of each specific tactic your team tries out so you can determine which ones are paying off the most in a diagnostic comparison.
The KPIs you should look at to figure that out are:
- The cost of acquiring each new lead, MQL, and SQL
This tier is crucial to helping you understand how your current marketing plan is working so you’re able to improve upon it.
Tier 3: Execution Optimization
The primary purpose of tier three is to take what you learned in tiers one and two and use it to improve your marketing planning going forward.
The main goals to emphasize here are turning your data into customized insights into how well specific tactics drive traffic, response, and conversion; and using that information to figure out how to best optimize which marketing tactics you use based on the data you have.
The best KPIs to help you with this tier are:
Tier three can only come after you’ve completed tiers one and two, so you fully know the best actions to take next.
Connect the Tiers
No single tier can exist in isolation. Adam explained in the webinar how you have to see the ties between the different tiers in order to be able to see the conversation across the business.
Connecting the different tiers in the marketing performance framework makes it possible to:
- Enable data-driven marketing planning and forecasting.
- Show the impact of your marketing decisions to executives.
- Develop a common language across departments and silos.
All of that adds up to improved marketing results across all your efforts.
Getting Marketing Planning Right
Once Adam wrapped his presentation up, Darin jumped in to elaborate on best-in-class marketing planning. He cited the Sirius Decisions CMI Vantage Point survey that found driving improvements to the marketing planning process is now a top priority for CMOs. Even so, many of our attendees admitted that they were still struggling to get a well-defined process into place.
That’s no real surprise since, as Darin admitted, marketing planning is hard. People don’t necessarily think of planning as difficult, but combining everything that’s going on in all your different channels and connecting it back to your business goals is a challenge many marketing organizations struggle with.
Two of the biggest issues that hold organizations back when it comes to their marketing planning are struggling to get effective measurement and ROI into place and relying too heavily on continuing with past habits. Sticking with last year’s plan may be easy, but it won’t help you improve.
Darin explained that useful marketing planning includes:
- Orchestration. You have to link your marketing planning to measurement and keep all your various systems in sync.
- Planning goal setting. Start with the end in mind so you can better determine what to track and measure your progress against.
- Creating a comprehensive marketing calendar. A shared marketing calendar like the one enabled in Hive9 allows you to bring everything you’re doing all together in one place, so you can see how the timeline, your different tactics, and all your channels relate.
- Analysis of budget spend. If you’re ever going to achieve a clear idea of ROI, you have to get good at tying your spending to the specific activities it goes to so you’re able to see how your budget spend relates to your results.
- Waterfall reporting. Don’t just pay attention to the number of leads you bring in. Your measurement should extend through the whole demand waterfall so you can get a much clearer picture of which activities are paying off in promising leads and actual customers.
With this much information just in the recap, you can bet that the webinar is packed full of even more valuable insights that can help you and your organization. Don’t stop with this post, head over to view the whole thing.