Can Marketing Really be a Revenue Engine?

It's a key question in today's business environment - can marketing really be a revenue engine, or is this current energy around marketing driving revenue just a fad that will blow over. I was truly honored to host a panel at Dreamforce to discuss that question with three of the very best in the field.

In this panel discussion, Michael Williams of McAfee, Daniel Greenberg of TrialPay, and Chris Boorman of Informatica dug into the question from three very interesting angles and showed exactly what they had done in their respective businesses to rethink marketing as a revenue engine and drive business for the organization.

If you've been thinking about marketing automation as an investment, wondering what the excitement is over the new revenue performance management space, wondering how you can take your own team forward, or looking for some interesting metrics and KPIs on marketing's performance, this video is worth the watch.

If you find this presentation interesting, or want to look more deeply at some of the metrics that were talked about feel free to have a deeper look at how each revenue engine was build by looking at it on SlideShare. Read More...

Marketing Dashboard: Passive Discovery

We spoke recently about various ways of looking at marketing benchmarks and how to better dashboard and analyze the entire revenue performance management process. This thinking needs to be applied to all areas of the revenue engine, and each has its own unique challenges.

At the earliest stages of the funnel, where buyers first begin to become aware of your company and its solutions is perhaps the most challenging. One of the main ways in which people discover your message, of course, is coming across your messages "passively", through ads, content, and social media sharing.

Building an understanding of how your messages are being passively discovered is an interesting challenge. Many of the paid techniques of passive discovery, such as banner advertising, are inherently trackable. However, great content that allows an organization to earn passive discovery is often much less trackable. However, a clear understanding of this element of the revenue process is key to determining where to make important investments.

An important metric to start with is an understanding of paid vs earned awareness. This dashboard metric gives you a clear sense of whether prospective buyers in the early stages of their education process are learning about you through paid efforts, such as advertisements, or through your efforts to earn their attention, such as through content marketing. To create this view, chart the traffic to your website by its originating source. Those that arrive from content sites, or without the tracking codes that you place in your online advertisements are most likely earned discovery through your content marketing efforts. Those that arrive with the tracking codes of your online advertising efforts are paid discovery efforts bearing fruit.

In charting these two sources of awareness, all active discovery, such as referrals from search sites such as Google and Bing, and all natural traffic (visitors who just typed in your website’s address, and were not referred to it), must first be removed. Other sources of traffic, such as from a customer community, or online help portal should also be excluded, as these are individuals who are already aware of who you are and what your solutions are. With these categories of traffic removed, this leaves just the visitors who discover your content, and hence become aware of your solutions, through either paid or earned awareness efforts.

This view is instructive in two ways. First, a direct comparison of your paid and earned efforts provides insights into whether opportunities might exist that are not being maximally exploited. If you notice that prospects discovery of your solutions is mainly from paid sources, there is an opportunity to assess whether content marketing efforts may provide a more economically efficient way to drive awareness. If, however, all of your discovery traffic is coming from earned sources, there may be a chance to either re-evaluate whether your current paid awareness efforts could be better targeted, or, if there is an opportunity to increase your paid awareness efforts in order to generate awareness in areas of the market in which you are not currently driving as much awareness as you could be.

The second area of value you get from creating and maintaining this view of your revenue engine is that you can understand how your efforts are resulting in more awareness over time. This is most crucial for earned media, as this follows a “fly-wheel” dynamic for growth. Effort this is invested in creating and promoting great content results in a slow and steady growth in awareness. This dynamic is much different than the “lightning strike” dynamic of most paid media efforts where an investment results in a near real-time effect.

Calculations of the total audience to which your messages are presented in a way that allows them to be passively discovered is similarly simple for paid audiences, but challenging for earned audiences. For paid audiences, the total coverage of your advertisements (number of “eyeballs”) forms a good audience proxy. However, to calculate the total audience for earned awareness (mostly in the form of content sites that mention your company or solutions), it may be simpler to do this by assuming a known conversion rate and using that to calculate what the overall audience must be, based on traffic.

While this technique obviously prevents any insights that might have been gained by understanding and analyzing traffic conversion rates, in earned passive awareness, this is often not something that can be easily optimized as there is very limited control over how and where you are mentioned, so the best action is often simply to drive audience sizes higher through garnering more share of the conversation.

Analyzing Paid Discovery – Advertising and Audience Definitions

In building a dashboard to show the effectiveness of advertising efforts, the focus is on understanding how to target audiences that will effectively convert into interested buyers. This area of the industry is evolving rapidly, and an important development is in how audiences are defined. Historically, an audience was defined mainly by the content itself, with a thin layer of demographics on top.

For example, an industry new site focused on printing technologies in the publishing sector could be assumed to have an audience of people involved in that discipline. Within this audience, advertisers could often target by title or organization fit based on declared demographics, but not much more.

In today’s online world, this is rapidly changing. The major content networks are beginning to provide the ability to target audiences based on historical activity. For example, those who visit certain pages on your site, or meet certain qualification criteria could be defined as a specific audience, regardless of where they are on the Internet, for having specific ads presented to them.

In analyzing advertising campaigns, this analysis of audience becomes critical. While remarketing audiences are likely to have substantially smaller sizes than their mainstream counterparts, they may offer opportunities to convert prospective buyers to MQLs at a much higher rate or present more precise information that is relevant to later stage investigation and validation only.




Inbound Links – Earning the Potential to be Discovered

Traffic to your web properties is the most tangible metric to dashboard when looking at passive discovery. However, when it comes to the efforts to earn this discovery, it is a difficult metric to use in order to guide decisions as it is an aggregate measure of all the content that is linked to. Efforts to build great content and share it with influencers lead to a more measurable metric of inbound links.

An inbound link is a link from another site on the web to a page of content on your website. Creating interesting, useful, and valuable content leads to more links, and each link increases the chances that your content will be discovered by those reading about the market space. Obviously, links from higher traffic and more credible sites increase this potential more than links from less relevant sites.

To gain an understanding of the success of your content marketing strategy, and areas for improvement, a dashboard of inbound links can be very useful. For each major area of your web properties, such as your main site, blogs, and campaign-specific sites, dashboard the total number of inbound links, the average quality for each inbound link (based on the traffic and credibility of the page the link resides on), and the number of visits generated by that link in the recent time period.



This dashboard view provides insights into the successes and challenges of efforts to create exceptional content that inspires others to link to it. If top level analysis of passive discovery shows levels of performance that are less than expected, an inbound link analysis can identify where the issues might be occurring.

Social Engagement and Passive Discovery

As social networks grow in importance as a medium through which information is shared, so too do they grow in importance as a place where prospective buyers happen upon information of interest to them and in doing so begin to learn about new solutions and new approaches. Each conversation or engagement that happens in the public domain, whether a discussion on LinkedIn or an interaction on Twitter creates an opportunity for another viewer to see the discussion and engage with the content being talked about.

While measurement in this area is evolving quickly, even a simple view of which social networks are seeing a large number of links to your content being shared, the total traffic to your content that is driven by each of these networks, and whether this traffic is successfully turning into inquiries.



Thinking about Passive Discovery

Whether paid (advertising) or unpaid (content, social), this top end of the funnel is crucial for driving new business. Without great dashboards, it is hard to optimize and grow it.

How do you think about, measure, and analyze the ways by which people "come across" your content? Read More...

Building Benchmarks - 3 Main Approaches

In order to build a high performance revenue management process, not only must it be instrumented and measured to allow you to understand current state, but it must be continually improved. As the market, technologies, competitors, and your own capabilities change, you must continually adapt, learn, and optimize.

However, to do so, it’s important to understand where in the overall revenue process you are performing well, and where you are performing poorly. This requires benchmarking your performance and guiding continual improvements in areas that are most in need or most critical for overall revenue performance. Over the next few posts, we'll look at ways to think about building these benchmarks.

Before we do that, however, we need to look at how we are approaching the challenge. Revenue performance benchmarks can be built in three main ways; against alternatives to ensure that the most effective and efficient way of accomplishing a tactical objective is being used, against a plan to ensure that each element of the revenue performance process is contributing at the required level, and against best in class companies to ensure that the performance levels being seen are maximized to the level that the best performers in your industry are seeing.

Against Alternatives

The best way to start with benchmarking is to look at individual components of the revenue process and ensure that each element of the process is performing as well as alternative options. To accomplish this, a clear comparison metric needs to be established that can be seen as equivalent. If, for example, a webinar and a whitepaper marketing campaign are being compared as alternatives, they can only be reasonably compared with a clear definition of what the outputs are.

If, for example, the immediate goal of the two marketing campaigns is driving marketing qualified leads for sales, then that metric allows a fair comparison. Metrics such as website traffic and raw inquiries will be too high in the funnel to be meaningful, and metrics such as sales pipeline movement or closed business will be too disconnected from the initiative to be useful.
For this reason, when benchmarking alternatives, only initiatives that are truly alternatives for each other in that they drive the same intended outcome can reasonably be compared. A humorous video that drives awareness cannot be reasonably compared to a webinar campaign that creates marketing qualified leads, and neither can be compared to an inside sales campaign that drives business towards close.

Against a Plan

To benchmark efforts across the entire revenue performance spectrum, we first need to develop a comprehensive plan that models the full buying process from beginning to end, and provides conversion metrics at each stage in the process. With this plan in place, the volumes, velocity, and conversion rates that are achieved can be compared to the planned rates, and adjustments can be made accordingly.

In building this plan, key gaps in revenue performance often become visible, especially at points where a transition between siloed groups takes place. Understanding these gaps, and planning efforts and investments to remedy them and bring the conversion rates within the gaps to a reasonable benchmark level can have a very positive effect on overall revenue performance.

While the ultimate goal is, of course, a plan that looks into the future and maps revenue efforts to company objectives, the simplest plan to get started with is an incremental adjustment of past performance. For this reason, clear dashboarding of the existing state is vital in building a forward looking plan.

Against Best in Class

With the comprehensive view of revenue performance that this planning effort allows, benchmarking can now be done against best in class companies. Although each business experiences a different situation, benchmarking revenue funnel metrics against best in class companies allows quick identification of potential areas of improvement.

With an industry vertical, similar realities of buyer dynamics and sophistication may allow insightful comparisons of funnel sizes, overall buying velocity, and conversion rates. Similarly, comparisons against other organizations that share the same general go-to-market strategy (such as through a free trial program), or are comparable in terms of deal sizes, may provide valuable insights in terms of conversion rates and response profiles to specific marketing or sales efforts.

Now that marketing automation has made analysis of the entire revenue engine more readily available, we are beginning to see the ability to provide cross-company and cross-industry marketing benchmarks that provide insight into what best in class performance truly looks like.

Each style of benchmarking adds value in its own unique way, and the more visibility you gain into the performance of your revenue engine, the more you are able to make needed optimizations and improvements.

Current State of Benchmarking?

As we begin a series of posts to look at benchmarking, how are you approaching the challenge today? Do you feel you have dashboards in place? Do you compare tactical alternatives? Is there a quarterly or annual plan that you measure your performance against across the entire revenue engine? Do you compare yourself to best in class benchmarks? Read More...

Marketing Dashboard: Active Discovery

One of the most valuable areas to gain an understanding of is the current state of how your prospects actively discover your company and your solutions. The richness of insights that can be gained with a deep understanding of how buyers are using search is nearly without parallel. Each insight allows you to guide investments in a way that maximizes their effectiveness in driving your revenue performance.

Basics of Discovery

The first area to look at is the set of 10 or 12 “main terms” that buyers most commonly associate with your solution category or industry. These are the main search terms that would ideally lead prospective buyers to your web properties. A dashboard comparison of both the number of searches being performed on each search phrase (the search engines' webmaster tools provide this information quite readily), and the number of visitors to your content based on those main terms gives a very good understanding of if you are successfully being discovered through this avenue. A few powerful insights can be gained here that allow a reallocation of investments:

- Need More Category Awareness? The raw number of searches being performed gives a good indication of the upper limit of your success with active awareness efforts such as search engine marketing or search engine optimization. Broader awareness efforts such as analyst and public relations may be needed to increase interest in your solution category if this is the case.

- Are you Being Discovered? The number of visitors, and more importantly the percentage of visitors, who reach your site for each search term gives you a good indicator of how well your paid and organic search efforts are performing against each term. If a term is performing poorly, either an investment in search engine marketing against that term, or a focus on content around that term may improve your chances of being actively discovered by buyers seeking information on that term



Deeper Searches

As looked at earlier, however, the way in which buyers seek information is changing. With the average search phrase being more than three words in length, it is equally important to understand what is happening with the broader universe of search phrases being used by buyers. With a robust content strategy, the raw list of search phrases that are used by buyers to find you can be quite instructive in itself. However, as a high level dashboard to provide an understanding of the current state of your revenue performance, the best way to view the longer tail search phrases being used is to have it provide insight into what buyer stage your audiences can be loosely categorized into.

To understand this, divide the searches that guide visitors to your website into four main categories:

- Navigational: searches that are simply a replacement for typing in your website URL, usually just your company name

- Main Terms: searches for the main search terms you have deliberately optimized against

- Long Tail (branded): deeper searches, often with multiple words in the search phrase, or for specific content, and with your company or brand name in the search phrase

- Long Tail (unbranded): deeper searches, as above, but without your company or brand name in the search phrase

This dashboard view provides some rich insights into how well your company and solutions are being actively discovered. First, the relative amounts of visitors who discover your offerings based on long tail phrases vs main terms provides an indication of whether your content marketing strategies are working effectively. Given that the majority of searchers use lengthy search phrases, if the long tail columns are not larger than the main term and navigational columns, there is very likely an opportunity to be discovered by many buyers who are actively seeking solutions such as yours that is being missed. An increased investment in content creation may be warranted.

Second, a comparison of your relative strength between long tail search phrases with and without your brand name (ie, “Sourcefire intrusion detection products” vs. “intrusion detection system comparison”) provides an understanding of whether the buyers discovering you tend to be more at an education stage (understanding the category) or have moved more into the discovery stage and are looking to better understand your specific products.




Of course, overall trends are also very much of interest. The effectiveness of natural search or content marketing strategy grows slowly over time, and its success is best observed by following the trend in these high level numbers over time.

Paid vs. Organic Search

In order to deepen the insight gained from these views of your prospects’ active discovery of your content, it is important to understand what is driven by paid search (SEM) and what is driven by organic search (SEO) efforts in order to better coordinate efforts between them. Most B2B marketing organizations invest in paid search campaigns to drive awareness, and with most if not all of these efforts there is an ability to differentiate between traffic driven to your site via paid efforts vs. natural search efforts.

By splitting these two sources of traffic apart, and understanding the trends in each, you can better understand the performance of two very different categories of marketing investment. Paid search is predominantly a financial investment, and the results are generally directly in proportion to the monies invested (with a reasonable variation based on the skill of the search engine marketing team, of course). For this reason, you should expect the trend line of visitors from paid search to map closely to your SEM investments.

Organic search efforts, however, are very different. Effort, mostly in the form of time to create and promote great content, is invested, and slowly builds credibility with the search engines and with influencers in the industry. Consistent, meaningful investments in this avenue with therefore result in a slowly but steadily growing number of visitors driven by organic search results.

For this reason, a combination of investments can be very useful. Paid search (SEM) investments can be made in areas that are new, where results are weak, or where a short term boost is needed. Investments in content and influence to drive organic search results can be done over time in core areas of focus.

Read More...

Calculating the Value of a B2B Marketing Campaign

It’s the ultimate question in marketing:

What effect did this campaign have on revenue?

In short buying cycles, where the buyer generally understands the category of the offering, and the transaction is quick and simple, this can be measured relatively easily. A marketing campaign results in a website visit, a product is added to the visitor’s shopping basket, and the transaction is completed. Tying the buying event to that marketing campaign is both easy and sensible. Various marketing campaigns can be analyzed to see what offer, and what creative, drive more revenue.

But in the longer buying cycles we see in B2B, this analysis is not so simple.

Buyers progress through a buying process at their own pace, facilitated by marketing messages and campaigns, but not necessarily driven by them. Some campaigns may generate broad awareness, some might educate on criteria to consider, and some might trigger buying actions directly. All are valuable, but measuring their value requires a different approach than in simple buying processes.

Understanding the Stages

The first key step is to understand where each person is in their buying process. Some may be just names in your database, either acquired names or names that have gone inactive. Some may be interested, but not ready for sales yet, and some might be ready to engage with sales. Lead scoring allows you to objectively define where each person is in their buying process.

As part of this process, it’s important to make sure that buyers are removed from stages if time passes and they don’t continue to show the buying behaviour indicated. As buying behaviour can be transient, with interest starting and stopping at various points, it’s key not to leave an individual marked as being at a certain stage if they are no longer as interested as they once were.

Associate Value with each Stage

With the buying stages defined, it’s now possible to look at historical conversion rates to understand the value of a lead at each stage. For example, if a deal is worth $10,000, and an MQL has a 10% conversion rate to a deal, it is worth $1,000. Similarly, if a lead at the “mild interest” stage has a 1% chance of converting, it is worth $100, and if a raw name that has not yet shown any interest has a 0.2% chance of turning into revenue, it is worth $20 per name.

It’s important to note that these values are based on the conversion rate of the stage through to close, rather than the conversion rate to the subsequent stage.

Campaigns, Transitions, and Value

Now, with this value per stage established, it is finally possible to see the value of a buyer’s movement through the funnel even if it does not directly translate to closed business or qualified leads being passed to sales. For example, if a buyer moves from “mildly interested” ($100/lead) to “marketing qualified lead” ($1000/lead), their value has increased by $900. Similarly, if a buyer moves from “inactive name” ($20/lead) to “mildly interested” ($100/lead), their value has increased by $80. If net new leads enter the funnel, and are deemed to be “mildly interested”, they are immediately worth $100.

If a marketing campaign triggered that transition to take place, the simplest way to look at the value of the marketing campaign is that it added that much value to your lead funnel. If a campaign costs $50,000 and causes 1000 leads to move from “inactive name” to “mildly interested” (1000x$80), pushes 10 leads from “mildly interested” to “marketing qualified lead” status (10X$900), and creates 200 new “mildly interested” leads that were not previously in the marketing database (200X$100), the value of the marketing campaign can be calculated as:

Cost of Campaign: $50,00

Value of Campaign:
1000 X $80 = $80,000
10 X $900 = $9,000
200 X $100 = $20,000
=================
Total: $109,000

You can see that, if only the creation of qualified leads is looked at, the value of the campaign would appear to be very low, whereas it was a very successful and valuable campaign in that it triggered a lot of valuable early funnel re-engagement of inactive names, and generated new interest.


Campaign Value

Many campaigns that we run as marketers are targeted at top-of-funnel, or mid-funnel outcomes. Generating net new names, educating buyers, establishing evaluation criteria, and nurturing buyers are all very valuable activities to perform. However, they can be extremely difficult to measure unless there is a framework in place to assign value to each of the early stages in the buying process.

When the right marketing analysis framework is in place, and each stage of the buying process can be measured, valued, and analyzed, it becomes possible to associate a clear value to campaigns that are targeted at top-of-funnel activities. When we build the overall marketing dashboards for our organizations, we can then value these campaigns in the same way that we value campaigns that target moving mildly interested leads further down the funnel until they are ready for a conversation with sales. Read More...

Cash Flow Statement as a Metaphor: Sources and Uses of Leads

Earlier, we introduced the financial metaphors for balance sheet and income statement when looking at B2B marketing analysis. Following on the same financial metaphor, a “cash flow” statement can show valuable insights into the sources and uses of leads, allowing you to dashboard the lead flow within your organization in order to understand which territories, product lines, or business segments are seeing more lead flow than others, and whether the leads are being successfully converted into opportunities.

Understanding which sales teams are seeing the best sourcing of leads gives a good sense of whether there is any imbalance in the lead flows. For example, in the following data, you can see that although the West is generally getting more leads, they are of significantly lower quality. Similarly, while there are lots of leads for Widget B being generated, there is a significant imbalance in lead flow to reps in the East.





With this understanding of which territories, product lines, and salespeople are provided with leads, the next step is to provide insight into the outcome of those leads once they have been handed off to sales. Done properly, the disposition of leads by a sales team after they attempt to connect with them should not only trigger a marketing process to correctly handle the leads, but also provide clear insights into the quality of the leads. If the leads were unreachable, lacked interest, were not the right role, or only had early stage interest, this insight allows marketing to see whether there are potential quality issues with their leads.

Likewise, if certain sales reps are doing a poor job in following up with the leads they are given, this will also show up in the analytics of lead disposition. In the following lead disposition chart, for example, you can see that both Bob Clark and Jane Chen received a large number of leads, but failed to convert many of them to opportunities, instead resorting to voicemails or calling back in 90 days. This may be an indication of a performance or training challenge with these two sales reps.



The more visibility we introduce to our processes for building interest, qualifying leads, handing them to sales, and having sales connect in order to grow a revenue opportunity, the better we are able to improve those processes. The cash flow statement, as a metaphor, provides a great way to look at which sales teams are getting good sources of leads, and what the uses of those leads are. The ability to optimize this lead flow or guide the sales team's response lets us optimize revenue quickly and effectively. Read More...

CEOs and Marketing Metrics

CEOs may not be involved in the day to day challenges of the marketing department, but they can strongly influence its evolution through the questions that they ask and the metrics that they track, both in the marketing and sales teams. Done well, this structure and encouragement can facilitate a transition to a buyer-centered, efficient marketing and sales organization. Done poorly, however, the structure and metrics that a CEO imposes on his or her team can prevent the needed transitions from taking place.

High Level Framework

At the executive team and board levels, CEOs should measure marketing on objective, standard metrics around marketing’s ability to create, nurture, and qualify sales-ready buyers. By looking at Marketing’s ability to manage the top end of the revenue funnel through balance sheet and income statement metrics, CEOs will instill the discipline of defining the stages of the buying process, measuring leads against these stages, and facilitating buyers’ movement through each stage by carefully targeted campaigning.

Similarly, CEOs must work to have Sales and Marketing present their views of revenue projections, and the needed investments, in a coordinated fashion. The hand-off of a lead from Marketing to Sales should be based upon a mutually agreed-upon definition, and thus should enable a common view of the entire funnel from the earliest stages of awareness to the final closure of a deal. With this in place, and with an understanding of the conversion times and percentages between each two stages, there is an ability to see potential revenue shortfalls well in advance and adjust investment across the entire Sales and Marketing spectrum accordingly.

Conflicting Metrics

Without this coordinated focus, it is easy for conflicting metrics to develop. For example, if a Marketing team is focusing on only handing highly qualified leads to Sales, they will naturally reduce the number of leads that are passed. If, however, the Sales team is managed and measured based on activity metrics such as the number of calls per day, they will resist the reduction in lead volume from Marketing, even though the lead quality is significantly higher.

In measuring Marketing, CEOs encourage the right behavior when they think in terms of the buyers’ buying process:

- How is awareness of your solution category first developed?

- How do buyers educate themselves, and is that education process something you should be a part of?

- When prospective buyers understand a business challenge or opportunity and seek to solve it, do they discover your company?

- How are solutions selected and validated in your category?
What criteria are used, and how have we educated buyer on why to select us?

These questions focus marketing on understanding and facilitating buyers throughout the entire buying process.

What this may mean, however, is that Marketing focuses more on processes that continuously nurture prospective buyers, continually allow your solutions to be found, and gradually establish buying criteria that allow your solution to be selected. This can often reduce the number of large, one-off campaigns that attract significant internal attention, but may do far less to engage with buyers, as they are timed and targeted based on the company’s needs and schedules rather than those of the buyers.

Results in Terms of Buyers

CEOs that ask Marketing for results that are defined in terms of the prospective buyers – such as the movement of prospects between one stage of their buying process and the next – allow Marketing to better focus on campaigns that facilitate buyers. While large one-off campaigns can at times be useful, they often attract a disproportionate amount of internal attention due to their higher internal visibility. CEOs that avoid the temptation to only ask for and look at large one-off campaigns are guiding Marketing teams in a direction that is more focused on the needs of buyers.

Driving a Marketing team to look at hard metrics for their campaigns, and to take responsibility for those metrics has some interesting repercussions. A marketing team can commit to revenue metrics, delivery of objectively qualified leads, and to managing an overall healthy and predictable revenue pipeline. With this responsibility and measurement, however, comes the associated ability to associate compensation with directly measurable performance. CEOs should not be afraid to challenge long-held beliefs on compensation levels between Sale and Marketing. Even institutions such as Presidents’ Club, long the purview of Sales, should be opened up to anyone in the Marketing organization performing sufficiently well against objectively defined metrics.

CEOs that set the right framework and structure for their Marketing and Sales teams can drive an evolution of performance. However, simple actions and metrics, or long-held beliefs that are not challenged, can easily derail the best intentions of Marketing and Sales executives seeking to improve their own performance.

Read More...

Predicting Revenue through the Marketing Funnel

Predicting revenue is a difficult task for any organization, and it has historically been only attempted in the sales organization. With a buying funnel modeled from the top of the funnel, however, it is possible to begin understanding whether there is enough in the marketing funnel to support the desired and planned revenue goals.

For each stage in your buying process, based either on best-in-class metrics or your own historical results, you can look at two key metrics; the ratio between how many leads enter a stage and how many progress beyond it, and the average time in the stage for those that do progress beyond it. Note that it is critical to have leads degrade from a stage after an appropriate period of time. Without this, your calculations will be misguided as you will be basing your numbers on leads that are no longer sufficiently engaged to be accurately counted as part of that stage.

From there, with the conversion rates known or approximated, simply work backwards up the funnel. If your average deal size is $100,000, and you need $10M in revenue, then you need 100 deals. If the Sales Accepted Leads (SALs) close at a 10% close rate, that’s 1000 SQOs. With a 40% conversion rate of SALs to SQOs, this means 2500 SALs.

In order to create those SALs, sales need to be provided with MQLs that they accept. With an 80% acceptance rate, this means marketing needs to create 3125 MQLs. If the Interested Inquiry to MQL ratio is 10%, that means you need 31250 Interested Inquiries in order to make that $10M number.

However, time is an important element of analysis of the marketing funnel. If it takes, on average 2 months for and inquiry to become an MQL, a SQO is only created after a few initial calls, taking on average 1 month, and the sales process takes 3 months, those 31250 Interested Inquiries will not convert into $10M in revenue for 6 months. This is obviously a very simplified example, but the importance of taking time into account cannot be underestimated. The more your model of the buyers’ buying process evolves to include multiple stages, the more insightful this analysis can be. Seeing gaps in the funnel early can give you insight into revenue shortfalls many months in advance.

It’s important to note though, that is is only a model for deals that are generated by marketing. If you have a partner channel generating deals on their own, or your field sales team generates their own opportunities, this revenue will be over and above the revenue modeled with this calculation. Read More...

Marketing Analysis: Foundations for Great Analysis

One of the most commonly cited benefits of implementing a marketing automation system is the opportunity to improve your organization’s ability to analyze marketing effectiveness. This is indeed possible, and provides a powerful advantage to organizations who are successful. However the final outcome of great marketing dashboards rests on a strong foundation of data. Ensuring that the data you need is available, cleansed, and normalized is critical to generating the analysis you need.

In evaluating a marketing automation software investment, it’s crucial to look at this overall stack and ensure that you will be able to access the right sources of data, keep that data clean, and then build an analysis framework on top of that. In this post, we’ll look at the key foundational elements of good analysis.

Data Sources:

The first part of this foundation is having the data that you need. Without the right data, analysis is impossible, so this forms the first key area to evaluate, even before looking at any reports or analytics. The following examples give you a sense of the types of data you might need available within your marketing automation system in order to perform certain types of analysis:

Product Purchase History: an analysis of whether individuals who bought product A are more responsive to messages about product B, or product C, would require you to integrate and store information about product purchase history within your marketing automation system

Social Media Effectiveness: understanding the effect of your social media efforts on buyer behavior requires you to track all key social media interactions with both known and unknown web visitors, and associate them back to purchase activity

Offline Activity: analyzing the effectiveness of offline activities, such as tradeshows or lunch seminars will require you to capture and track that information (registrants and attendees) within your marketing automation system

Each of these data sources is continually changing, so in thinking about your marketing automation choice, you’ll need to ensure you have the needed integration capabilities in order to get any data that resides in external systems into your marketing automation platform.

Data Quality:

The next foundation for marketing analysis is data quality. By this, we mean the ability to manage duplicates, cleanse, and normalize data. As marketing data is continuously touched – by web forms, list uploads, event registrations, and white paper downloads – it is imperative to have a process in place to manage this data quality inline.

Some key aspects of data quality that can affect your ability to effectively analyze your marketing efforts are:

Duplication: identical or similar records of individual contacts or accounts need to be identified, matched, and merged. Without this, any measurements of lead count, campaign response, or segment size will be inaccurate or misleading.

Completeness: in many cases, the data in a marketing database is not complete. Records may be missing values, or the data in them is not up to date and accurate. If analysis relies on these field values, it will not be effective until that data is available. The ability of your marketing automation system to do progressive profiling, and gradually add needed data to contact records is crucial in ensuring that you have the needed data completeness in order to properly analyze your marketing effectiveness.

Normalization: Data within a field, such as title, role, industry, or geography must be normalized to standard values in order to effectively analyze it. For example, if analyzing the effectiveness of a campaign in driving response from senior executives, if job titles are not normalized, and “Vice President” is written as “VP”, “V.P.”, “VP of”, “Vice Pres” or “Vice President”, your resulting analysis will be almost impossible.


Great marketing analysis rests on a foundation of great data. The ability of the marketing automation software you select to obtain the needed data, and maintain it in a state of continuously improving data quality is key to your success, and should be a key part of your analysis in making your selection. Read More...

Top-of-Funnel Analysis - Net New Names, Inactive Leads, and Reactivated Interest

Analyzing marketing actions at the top of the funnel has some interesting nuances. This is a direct result of the fact that having a contact’s name within your marketing database does not in any way imply interest. You may have a name in your database that is from many years ago and has not shown interest in recent years, there may be names that were input as part of a list purchase, and have never shown interest. In looking at the top of the funnel, it is critical to be able to carve out these “inactive names” from the rest. Without that, the measurement of campaigns targeted at the top of the funnel, and also your overall funnel conversion metrics will be challenged.

The best way to account for this, is to have a rigorous process of eliminating inactive names from an “Interested” stage at the top of the funnel. If a lead, interested at one point, has made no inquiries, and taken no actions in a period of time, say 3 months, then that lead is placed back in the inactive lead pool.

Campaigns targeted at the top of the funnel then, can have three main effects:

- Generate Net New Names via Inquiries; a campaign that generates buzz in the market may generate net new names for your database that come in as active inquiries. For example, if a whitepaper is offered as the call to action for a campaign, and an individual who was not originally in the database downloads it, they are both a net new name and are now part of the “Interested” stage of the funnel

- Reactivate Inactive Names; a campaign may target Inactive Names in your marketing database, and by doing so cause some of them to re-engage. This is a very valuable transition as those are names that were otherwise not showing any interest in your organization.

- Acquire Inactive Names; A campaign that involves a list purchase or other name acquiring techniques may add names to your database, however these are not people who are showing any interest, and therefore must be deemed to be part of the Inactive Name pool until a campaign succeeds in interesting them

In measuring the effectiveness of your marketing campaigns at the top of the funnel, it’s crucial to separate these transitions. If not, highly successful campaigns that re-engage large portions of your existing, but inactive, marketing database will appear to be minimally successful due to not creating many net new names. Similarly, campaigns that involve an element of list purchase may appear more successful than they truly were as they create many net new names, even though only a small percentage of these individuals will engage with your communications. Read More...

Natural Search in B2B Marketing - Analyzing Discoverability

Being discoverable by your potential buyers is critical to success in many businesses. As buyers control their buying process more and more, the need to be found when a prospective buyer is searching for a solution to a business pain is increasingly critical. One of the most obvious elements to this is natural search engine optimization. If a prospective buyer is searching for terms related to your business or the pains you solve, you want them to discover your organization.

If they are early in the buying process, you may want them to discover your thought leadership writings, and recognize you as a leader in the field. If they are at a vendor discovery phase or moving towards solution validation, you may want to have them discover writings that clarify how to think about important aspects of the buying decision.

Measuring this discoverability, however, is an interesting challenge, as there are many search phrases that might be relevant to discovering your solution. Against each of these phrases, your main web site, your social media properties, and your competitor’s web properties may be discoverable.

The first challenge is listing the search phrases that are relevant to finding your solution. For each phase of the buying funnel, you will have a different set of phrases, and this will differ based on the marketing challenge you face. If, for example, your main challenge is a Flying Car challenge, you may wish to focus mainly on the awareness stage, and think about search phrases that are related to, but not identical to, your solution. If prospective buyers are unaware that your solution category exists, they may be looking for solution categories that are peripheral to yours. You will want to be discoverable when they are looking.

At each stage of the buying funnel, list out the key phrases that buyers may be looking for. At the vendor discovery phase, the prospective buyers may be searching for more exact solution category names. At the solution validation phase, the searches may involve your product name directly, but be searching for specific capabilities or objections.

With the search phrases listed, it’s then key to understand where your main web properties, your social media properties, and your competitors rank against those key phrases. One of the simplest ways I have seen of presenting this, is a table that shows your best ranking against each phrase in the form of points on a grid.

On the left side, place your own web properties, both your main web properties, and any social media properties your team runs. For comparison, place your key competitors’ web properties on this side of the chart also. Along the top row, build columns for each of the following search ranks: First place, top 3, top 5, top 10, top 30, and top 100. Then, for each of the search phrases in your list, each property a point in the highest category it is discovered in.

For example, if “widget transportation” is a search phrase of interest, and your website appears as number 8 on the natural ranks on Google for that page, you would give yourself one point in the “top 10” category for your main website. Note, that if you use a marketing automation system or web analytics package to understand which search phrases are being used to find you, this will only show you the phrases where you are already successful. Be sure to include search phrases where you would ideally be found, but currently are not.

Complete this process for all the search phrases (around 100 phrases is often a useful number to gain a good perspective), and you will find an overall discoverability profile for you and your competitors. Note that the first page of search results is generally seen as the only page offering significant value in terms of traffic, so the results that are lower down than that can give indications of progress, but are unlikely to be driving traffic.

This view gives an easily digestible sense of your natural search engine discoverability. It should be noted, however that results will vary by search engine, geography, and over time. It is not a report that gives a definitive answer, but it is useful for providing a perspective as to where you are as a business and whether you are making progress in terms of being discoverable. Read More...

Marketing Dashboards

The old adage of “you can’t manage what you can’t measure” is as true in marketing as in any other discipline, but in marketing there is often a challenge of defining what one wants to measure. Especially in B2B marketing, the length of the buying process leads to challenges in defining metrics that make sense for a marketing dashboard. Some metrics may seem too transient, being only relevant to a particular campaign. Some metrics may seem too tactical, not strategic enough to the business. Still further, some metrics may seem too difficult to achieve, requiring a broad change in processes before the metrics are possible.

This challenge leaves many CMOs, VPs, and Directors of Marketing without the same level of dashboard metrics that their peers in other functions rely up on to run their businesses.

However, there are a number of key areas of B2B marketing that can be greatly enhanced with dashboards with today’s capabilities. Here are a few key areas to think about as you build critical management metrics for your marketing organization:

Funnel Management:

As we adapt to today’s buying processes where the buyers are in control, we need to adapt our thinking on how we look at a marketing funnel. Buyers progress through their own buying process at a pace that is controlled by them, and the best way to measure it is to use a top-down marketing analysis structure. First, an understanding of digital body language allows us to determine where in their buying process each person is. From there, we can measure the marketing funnel using a balance sheet and income statement metaphor.

The balance sheet view gives us a snapshot of the current state of the marketing funnel. How many suspects, inquiries, and MQLs, are in the marketing funnel at that moment in time. The income statement view gives us an understanding of how the funnel has changed in the last quarter as leads move up, down, into, or out of the funnel.

These top-down views of the performance of a marketing organization allow a high level understanding of what the health of the overall organization looks like. If there are too few leads in one part of the funnel, it indicates a future challenge in revenue generation. A strong motion in the funnel in one quarter can indicate a highly successful marketing push to move buyers through certain stages of their buying process. As these views do not change with time, they are excellent high level dashboards for a CMO or VP of Marketing.


Communication and Response

Communication of messages is a key role of any marketing organization, and most do so with the goal of generating a response. As an executive in charge of a marketing organization, it is important to remain aware of the pulse of messaging and response with your marketing organization. First, a high level view of your email campaign history is key; how many campaigns have been sent and how many recipients were communicated with. Seeing this communication pattern over time allows you to understand if there are spikes or lulls in your communication pattern. Another key view of your outbound communications would show your email frequency – how many times you are communicating to each person in your database – to indicate if you are having any over or under-communication challenges.

Response, is also critical to measure. In terms of web traffic, new and repeat visitors are important to understand as they give you a view into trends of potential buyers visiting your website. Likewise, inquiry counts (submission of web forms), give you an understanding of the number of individuals engaged with your marketing offers. If you are making any search or social media investments, a measurement of the raw traffic being generated by source is also critical to understanding the success in each of these areas.

The patterns in your outbound communication and response patterns are ideal for dashboarding, as they are each views that do not change over time, but provide very valuable insight into the trends, challenges, and successes you are facing.


Database Growth and Data Quality

A marketing organization focused on demand generation is only as good as the marketing database it is nurturing. To do this successfully, the database growth and quality must be carefully managed. That means that dashboards of database growth and data quality are key in understanding trends, problems, and opportunities.

There are a few factors involved in database growth, each of which can be easily monitored and managed through dashboards. Raw growth through net new names, and tempered by unsubscribes and hard bounce-backs is a key component of any marketing dashboard. On top of that, however, monitoring the growth and relative size of your inactive segment gives you an understanding of those who are on the path to being emotionally unsubscribed, essentially becoming an inaccessible part of your database.

Data quality has many aspects that are deeper than a top-level dashboard allows, but a few key aspects of data quality can still be measured effectively. Data completeness is one such aspect. For the 10 or 20 fields in your database that you are most concerned about, a dashboard showing data completeness allows you to quickly understand your progress towards ensuring that these fields are completed by the majority of your marketing audience.

Sales Alignment and Adoption

A successful B2B marketing organization needs to focus as much on enabling the sales team they serve as on their own marketing activities. Even more so in this case than in others, the use of marketing dashboards is crucial in understanding how successful they are being with enabling the sales team. As content is provided to the sales team to use in their communications, a dashboard should be set up to provide insight into which content assets are being used, and which members of the sales team are most active. Similarly as lead nurturing programs are provided to sales as disposition options, a marketing dashboard should show which nurture programs are being used.

Similarly, when leads are passed to sales, if a service level agreement has been reached with sales beforehand, a dashboard can be very useful in monitoring and measuring how quickly qualified leads are followed up on, and whether these timelines are sufficient.


Dashboards on Marketing Assets

So far, we’ve mainly discussed top-level marketing dashboards that provide a glimpse into the performance of an overall B2B marketing organization. However, of equal importance are the dashboards on individual marketing assets. For example, when an email campaign is launched, a landing page is posted, a web form created, or a search campaign initiated, being able to quickly run a dashboard of critical metrics on that marketing initiative is important to building a culture of marketing analytics.

With dashboards on individual assets available quickly and easily, each tactic that is used can be analyzed, understood, and compared against similar assets to understand its performance in context. This culture of analysis quickly weeds out underperforming campaigns by focusing management attention on the metrics that determine their success.

Dashboards as a B2B Marketing Tool

Whereas other functions have leveraged dashboards successfully for many years, marketing has historically been without the ability to devise effective, relevant dashboards that allowed CMOs, VPs, and Directors of Marketing to understand and manage their businesses. Now, with the transition in today’s buyer to be more in control of their own buying process, while also being much more online, marketing dashboards are both possible and necessary.

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Analyzing B2B Marketing: Balance Sheet and Income Statement

Consistent in every discussion I have with B2B marketing execs is the topic of analysis. We're all very familiar with the tactical metrics on each marketing type; open rates and click through rates on emails, landing page conversion rates, cost per click metrics, traffic statistics, and so on. However, these metrics fall short when it comes to understanding marketing's overall contribution to the performance of the business.


Much recent writing has focused on a campaign-up view of the world, with analysis focused around an attempt to determine the return on investment for each campaign. These ROI or ROMI analysis frameworks tend to run into challenges in a B2B marketing environment as the buying cycle is often of significant length, and influenced by many touch-points.


An alternative, and much more actionable framework, is a top down view that uses a "balance sheet" and "income statement" view of the marketing world to understand marketing's overall effect on top-of-funnel activity. Within this top-down view, marketing actions and campaigns can facilitate buyers moving from one stage in their buying process to another, but the complexity of each campaign's individual influence is smoothly aggregated into an overall view that shows the current view of the top of the funnel, and the transitions that have been made over the last period of time.


The first step in looking at this view of the B2B marketing world is to map the buyers' buying process. Each step from education and awareness through to vendor discovery and validation should be understood and mapped, as these are phases that are influenced by marketing, and thus highly relevant in an overall marketing analysis picture.


In order to understand which buyers are at which phase of their buying process, the techniques of lead scoring can be used in order to map each prospective buyer to their individual stage of the buying process by looking at their digital body language.


With this in place, it is possible to build a "balance sheet" view of the B2B marketing funnel. This is a moment-in-time view of where leads are in the funnel, much as a financial balance sheet is a moment-in-time view of where dollars are in an organization at the end of a reporting period.


To have this view relevant and accurate, it is of course necessary to ensure that lead scores degrade over time. Buying interest is, in most cases, a transient phenomenon, and if a lead has not turned into a sales qualified opportunity (SQO) within a certain amount of time, it likely will not, so ensuring a time-based decrease in score is key.


With a balance sheet view in place, it is then possible to begin looking at the motion in the funnel over a period of time, such as a quarter. As buyers progress through their individual buying processes, the transitions in the funnel can be viewed and analyzed, showing where in the funnel there is growth, and where in the funnel there is shrinkage.


If a large number of leads have been passed to sales as Marketing Qualified Leads (MQLs) and accepted as Sales Accepted Leads (SALs), this may be viewed as a very productive quarter, but if the top of the funnel has been neglected and there is a decrease in awareness and a lower number of inquires than normal, this is a warning sign for future funnel trouble.

With the funnel understood in these terms, our ability as marketers to assess the buyers toolkit becomes very valuable as we can understand what resources are contributing to transitions at each stage of the funnel. If there is a gap in funnel motion at a certain stage, and investment in the buyer's toolkit at that stage can be made.

Presenting a marketing funnel in a "balance sheet" and "income statement" view allows marketing to clearly demonstrate their relevance to the business, justify investments in top-of-funnel activities, and make meaningful contributions to revenue forecasting. Whereas approaching marketing analysis from a bottom-up ROI perspective runs into significant challenges as the complexities of the B2B buying cycle come into play, approaching it from a top-down perspective brings clarity and consistency to the task.






As marketing teams begin to present this "balance sheet" and "income statement" view of the marketing funnel, the ability for the business, and the board to objectively understand marketing's contribution increases. With that shift, the well known tenure challenges of today's CMOs and the compensation imbalances between marketing and sales may begin to slowly disappear.

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Sherlock Holmes' Insights on B2B Marketing Data

"Is there any point to which you would wish to draw my attention?"

"To the curious incident of the dog in the night-time."

"The dog did nothing in the night-time."

"That was the curious incident," remarked Sherlock Holmes

Sherlock Holmes makes an interesting point (in the short story "Silver Blaze") about the conspicuousness of zeros in the data. They can, as in this story, lead to interesting investigations and important conclusions.

However, in the busy world we all live in, they can often be overlooked, as they generally do not appear in most analysis, due to the fact that they are by their nature non-events.

I was reminded of this in a conversation with Mark DiMaurizio regarding visual clickthrough analysis in email. Often, in looking at tabular or chart views of email clickthrough analysis, we will only see the links that were clicked on. If zero links were recorded for a click, either due to a technical error such as a broken link, or due to that call to action not engaging the audience at all, that is very valuable information that is being missed.

A very valuable and insightful question to ask whenever looking at any marketing data is "what is NOT being shown" as the insights based on absence from the data can often be as valuable as insights that the data itself shows.

As we look more and more to analyze our efforts in social media, and the efforts and forums that are driving interest in our solutions, we need to keep asking deeper questions of our data in order to draw out the insights from it.

Read More...

What the Prius can teach about B2B Marketing Analytics

Anyone who has driven in a Prius is aware that it is an interesting experience, different than in most other cars. However, can it really teach us about B2B Marketing Analytics?

I think the answer is yes.

If you look at the dashboard of the Prius, it has some interesting data. Mainly, it shows you your energy consumption, and your gas mileage in Miles Per Gallon. The data is right in front of you, and continuously updated.

It is interesting in that there are no compensation plans, MBOs, or commission structures associated with your gas mileage, but every Prius driver will report the same effect - you change your driving habits. Just by having the metrics in front of you, you feel compelled to do the behaviours that drive the number in the right direction; accelerating gently, not driving too fast, braking slowly.

This works in B2B marketing too. Socializing metrics can drive behaviour, regardless of compensation plans and MBO objectives associated with those metrics. If your marketing organization does not share, socialize, and discuss metrics on campaign response, you may be surprised at what happens if you do.

We all react naturally to seeing metrics in front of us on our behaviour, and much like in driving a Prius, if we see that our marketing campaigns are not influencing buying behaviour, are not driving inquiries, or are not guiding leads to become marketing qualified leads, we will likely stop those activities. Read More...

6 Really Simple Marketing Metrics for your Execs

We've all seen a similar cycle.... if you ask a marketing exec in a B2B company what metrics they'd want, it ends up in a complex description of ROI, funnel velocity, or influence measurement. Great goals, for sure, but not exactly quick wins. So, the reports aren't created for them and they end up with nothing. Let's start from the other direction, and look at 6 very simple measurements that you can provide them that they give them some simple insight into what's actually going on in marketing.


If you already provide this, fantastic, but I suspect there might be more than a few execs who don't have this data about marketing, and who would truly appreciate it. I get the pleasure of chatting with lots of present and future Eloqua clients, and from them I commonly hear that even high level data like this is very much appreciated.


-Contact database growth over time; gives a good sense of new name acquisition, unsubscribes, and overall size of list.


- Web traffic (new and returning visitors); this is where you're driving most people to if you're successful, it never hurts to have execs know about traffic levels. Knowing that x-thousand people are viewing your site on a daily basis never hurts in ensuring budget for the site redesign doesn't get cut, either.

-Raw Inquiries (form submits); I'm a huge proponent of lead scoring, but if you're not at the point where you can provide an executive dashboard of leads, properly scored and tallied, at least put out a list of raw inquiry counts to show inbound interest


-Total Campaigns; How many unique campaigns have been sent in the last month. This shows the level of activity of your marketing team in creating and promoting content, events, and webinars

-Communication Frequency; How often are you communicating with your database, are you under/over communicating


-Top Search Terms; How are people finding you? What are they most interested in, and is it more awareness, discovery, or validation?

So why these metrics? Well, for one, they're easy to do. Not much work with data or business processes involved, and you can have execs looking at them quickly. But, the more important reason is that they begin to focus attention on the right issues. It's only a beginning, but the direction is the right one.


As the world moves from outbound marketing and promotion to inbound marketing and demand generation, you need your execs to be asking things like: How do people find us? How many people are we educating? How frequently do they come to us for more information? Are they only passively reading that information or willing to provide their information in order to get it?


The more that execs ask this type of question, the more they will be bought in to the concepts of inbound marketing and demand generation. They will push for better nurturing of leads, more investment in social media to generate market awareness, more lead scoring, and better coordination with sales on which leads to hand off, and when. Those are the right directions for them to push, and if you can provide them with some of the right data at the start, you'll inspire more of those questions.


If you're already an Eloqua client and just want to build this out, there's some info on dashboarding on Eloqua Artisan - the user blog: http://eloqua.blogspot.com/2008/12/quick-win-whats-going-on-in-my-database.html. Enjoy - I'd love to hear some of your best dashboards that people can get started with quickly and easily. Read More...