The Characteristics of Revenue Generating Companies

In the last year the aspect of revenue, as it relates to marketing departments, has taken center stage.  Both Eloqua and Marketo are at the forefront of the Marketing Automation space discussing Revenue Performance Management.  These two companies along with others have appointed Chief Revenue Officers and some have resorted to creating a new type of marketer dubbed “The Revenue Marketer.”

Over the past few weeks I have had several opportunities to discuss this phenomenon with my friend and respected colleague Craig Rosenberg, a.k.a The Funnelholic.  During the conversations we have tried to answer questions like:

- Does revenue really emanate from marketing?

- Is the CRO really a legitimate role in organizations or is this really a COO with a different title? Or as David Brock has said: “Isn’t this the CEO’s job?”

- Hasn’t sales always been about revenue and is this new obsession with it just marketing’s awakening to the fact that they should also be focused on measuring themselves by the revenue yard stick?

The very fact that this is what we discuss when we are together or on the phone, makes us in our own right “marketing nerds” and while we do not have all the answers to these questions, we do know and agree on one thing – corporations exist to generate revenue.  While this is the foundation upon which all for-profit organizations are founded, we do not believe that all organizations are necessarily “Revenue Focused Organizations” (there is another acronym for the B2B space “RFO” – don’t try it we already have it trademarked).  So to better define what these organizations looks like, here are Craig’s and  my characteristics of RFO’s

1.  The Customer is the Focal Point

Hidalgo: For all of the work that has been done on getting marketing and sales aligned, it’s a wonder that the issue still exists. As a matter of fact, we would submit that the gap between the two is more apparent than ever.  However, revenue focused companies understand one thing: alignment is not just about marketing and sales. It’s about the entire organization uniting (forget aligning) to deliver true customer value at every buying stage.  This includes marketing, sales, customer support, product development, IT etc.  All of these organizations have their place in customer engagement which turns into revenue.

Rosenberg: This sounds so obvious but it isn’t.  The fact is we SHOULDN’T have to write about this, but we do because we need it.  In the last 3 years, we have learned a ton about the buyer and frankly exposed serious flaws with how we are running our businesses.    Again, from David Brock, start with the customer and work backwards against all areas of the organization. There is a great case study with Motorola where the customer became the organization’s purpose statement.  To get there, they understood everything about the customer and brought that understanding to EVERYONE.  Not just marketing, but everyone.

2.  Marketing Enables

Hidalgo: There is no doubt that the role of the B2B marketer has changed dramatically over the past several years.  As a result, many have sought to put marketing front and center in revenue creation. That’s not where they should be as this in effect supplants the role of sales.  Revenue Focused Organizations understand that rather than generating, marketing enables revenue.  While we may be splitting hairs here there truly is a difference.

How does marketing enable?

• They generate and deliver engaging and relevant content to the buyer
• They deliver content to sales that they can use to help propel deals through the pipeline
• They focus on delivering highly qualified leads to sales (based on a common definition and lead qualification process), thus increasing sales effectiveness
• They measure their impact and make adjustments where necessary
• They are marketing, engaging and nurturing at every stage of the buying process or sales funnel

When marketing supports the creation of revenue, it is an internal state of Nirvana

3.  They Know Where They Play

Hidalgo: Companies that are Revenue Focused Organizations know what segment of the market in which they play and do not pretend to be something they are not.

Rosenberg: Every single employee/team member in the Revenue Focused Organization can tell you who their customer is.

Hidalgo: In Sales: They are not afraid to walk away from a deal if they know they are not a fit.  Why?  Because trying to put the proverbial square peg in a round hole deviates from producing revenue. If you win the “wrong” deal will, in most cases, be a losing proposition.

Rosenberg: In Marketing: They focus on building their programs against their target. In Product Marketing: They don’t chase either. They are maniacally focused on building product to support the needs of their target.

Knowing where you play and staying true to your product or service delivery goes hand-in-hand with understanding your customer.

4.  They Are Maniacal About Measurement

Hidalgo: Companies who are revenue focused measure and measure the right things.  There is such a thing as going overboard on measurement.  Here is a good rule of thumb – if no one is going to use the data from your organizational metrics to help shape the future direction of your company, don’t measure it.

Rosenberg: Companies that are Revenue Focused Organizations measure what counts and pull the intelligence from those measurements to help define what’s next, what changes need to be made and what should continue.  It’s actually harder for the disjointed, unfocused organization to do this.  The lack of the singular goal of revenue prevents organization from creating truly transparent measurement and reporting.  Everyone’s silo is doing their own thing and looking to cover their butts.  The Revenue Focused Organization works backwards from revenue and creates the metrics that get them there.  If you’re not doing it already, now is a good time to start.

 

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What’s Your ROI?

This week we are fortunate to have the winner of the 2010 B2B Twitterer of the Year, Michael Brenner, guest post and share his thoughts on Marketing ROI. Michael Brenner is a Sr. Director of Marketing for SAP. He is the author of B2B Marketing Insider and co-founder of Business2Community.com. Michael has been in marketing for over 17 years in various roles where he has used customer insights to drive sales, ROI and customer loyalty through effective sales and marketing strategies. You can follow Michael on Twitter: @BrennerMichael

What is your return on marketing? This question can come up when you least expect it: while presenting your annual plan, while speaking to the CEO in the hallway, or maybe as one of those emails that lands in your inbox with a huge “thud!”

This question can come from sales, company leadership or even be debated within marketing.  Many marketers cringe. Some run and dive into the closest trash bin. And some marketers rise up, fill their chest with air and answer with confidence. Here is my view and hopefully you will find something here that can help you face the firing squad.

The New Marketing Accountability
In my blog B2B Marketing Insider I provide tips and insights from my perspective from inside a B2B marketing organization. In The New Marketing Accountability I talk about how ALL marketing spend should be tied to quantifiable results that the sales team and executives can understand. Generally, our marketing should be focused on generating and then managing demand. But sometimes, the CEO wants to “extend the brand” and sometimes sales folks want to work under the cover of a nice, massive awareness blitz. Aside from those examples, we need to show hard results and make sure EVERY marketing program has a sound business case or ROI.  Or as this Annuitas Group blog post stated recently, “we need to resolve to measure our marketing in terms of revenue.”

One Metric to Rule Them All
Deals, leads, conversion rates, inquiries, visitors, NPV, LTV, conversations? There is a dizzying array of metrics a marketer can use to measure the return on marketing. Unfortunately, there is no one metric to satisfy every goal. Each marketing objective has its own nuance.

• Awareness: This is challenging to measure but you should attempt to identify the increase in the number of people that know you but also like you. “Pre- and Post-“ ad recall is not enough. Many brand marketers will stop with awareness. For these tactics, you need to measure positive share of voice: for all those who care, what % has a positive impression of your brand?
• Consideration: When you are trying to get people to consider your product or solution, marketing tactics are highly measurable. You should look for increases in the number of branded or product-related searches, landing page hits and a steady growth in website visitors.
• Decision: This is where conversion rates become the most important. The ability for your organization to offer the information required for a prospect to make a decision will determine the conversion rate as well as the velocity or time it takes. I personally do not believe in marketing “acceleration” but I do believe we can remove the self-inflicted friction we impose on our deals. Not having transparent pricing or clear comparison tools is often the issue here.
• Retention: Customer satisfaction and Net Promoter scores are often used to identify the likelihood that we will keep our customers. We need to look at retention rates and analyze marketing programs that have a high number of lost customers. Some marketing programs like deep discounts might produce more customers that leave.

What Is Your Return On Marketing?
Still don’t think I’ve answered the question? If the question comes at the total marketing spend level, the answer is easy: ROI =direct revenue returned divided by total marketing spend. This is the only way to show true ROI. The reason this is an incomplete answer is time. Many B2B companies have long sales cycles that don’t conform to calendars. In the short-term, you can get through this issue by showing marketing-driven growth in the number of visitors, inquiries, leads and pipeline. I have typically used pipeline opportunity dollars delivered over marketing spend as a short-term benchmark. With an average close rate you can even get to a calculated ROI.

If you have the luxury of a longer time-frame, then Life Time Value (LTV) might be the way to go because it adds the element of future revenue with your company’s ability to retain customers. Marketing should not just produce customers but should aim to keep them.

If the question comes at the program or even the tactic level, then the answer is much more difficult. I have written enough on Social Media ROI. And The Annuitas Group has a great metrics overview titled Metrics – Tying it all Together.

But sometimes the answer comes down to determining the cost of NOT doing something. ROI has a cost and a return element that often misses the opportunity cost. This also needs to be considered when looking at marketing accountability. Is the competitor doing it? Are your prospects looking for it? Sometimes you need to invest ahead of the market. You will need to take on risks. You will make bets. And some won’t pay off.

Welcome to marketing! If it wasn’t fun, we’d be doing something else.

 

 

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Five New Year’s Resolutions for the B2B Marketer

Another year has come and gone and if anyone thought that 2009 was the year of the B2B marketer, then 2010 may have trumped it.  I have said before that there is no better time to be in B2B Marketing and with all the momentum that was built up this year, I am anxiously waiting for what’s to come in 2011.

Every New Year gives us an opportunity to set priorities and reset our focus. With that in mind, let me offer up the Top 5 New Year’s Resolutions for the B2B Marketer in 2011.

Resolution 1:  Align Around Your Buyers

I speak to marketers every day who are still in “activity based marketing” mode.  In essence, they deliver campaigns because that’s what they are supposed to do. But they do so with little to no understanding of how the campaigns are helping to drive engagement with their buyers.

2011 should be the year of the customer.

Organizations who want to improve the return on their marketing and sales investments need to first identify their ideal buyer profile.  Most organizations will have multiple personas/profiles depending on multiple product sets and offerings.  Taking the time to define and document these personas is a good first step in customer alignment.

Secondly, it is vital to create a map for each profile’s buying cycle. This is more than just time to sale.  It’s truly understanding the buying journey of each persona to whom your organization sells.  Understanding and defining the buyer’s journey will allow you to “walk in your customers’ shoes” and better understand what they need at each stage to engage them in meaningful dialogue.

Once you have identified the personas and mapped out the buyer journey, you can develop your offer and content maps.  These maps are guides that will enable you to deliver the most relevant content to the buyer at every stage of the cycle. It will improve the engagement and alignment with your buyer, leading to improved revenue attainment through marketing.

Resolution 2:   Involve Sales

I recently spoke at a conference attended mostly by B2B marketers.  During my presentation, when I mentioned “the sales team”, a collective groan seemed to emanate across the room.   Even though several trees have given their life to provide the paper needed to document how to solve the “marketing and sales alignment” problem, the negative sentiment continues to exist.

In 2011, marketers who want to find success have no choice but to go beyond involving their sales counterparts in the demand generation area. They need to view sales as their customer. The best way to do this is to begin speaking the language of revenue and conveying to sales that you need their help in attaining revenue goals.  A good place to start is collaborate on a common set of lead definitions and working towards the development of a lead management process. Marketers that want to see an improved ROI have no other choice.  Working with sales is paramount to achieving that goal.

Resolution 3:  Understand Technology for What It Truly Is

With the advent of marketing automation technologies, many marketers have fallen into the trap of buying automation with the expectation that it will make everything better.  While automation technologies are certainly robust, marketers must realize that simply implementing a technology solution does not bring with it marketing success.

Marketers must realize that technology is an enabler of strategy, process and people. It’s not THE solution unto itself.  Marketers should resolve to see how business process should be supported by technology, and ready themselves ahead of time to get the most value from it.

Resolution 4:  Take a Process Based Approach to Marketing & Sales

One of the most important roles of any B2B marketer is the delivery of quality leads to the sales force.  Yet more studies showed that in 2010, marketers still listed lead quality and delivery as their top challenges.  Furthermore, data continued to show that up to 80% of all marketing generated leads do not receive the proper follow-up.

In 2011 marketers need to understand one of the most important steps they can take is to define and develop a holistic lead management process that allows them to manage, engage with and nurture leads and make sure that only the most qualified leads go to sales.

In a recent post on research Jonathan Block from Sirius Decisions shows the importance of process and the impact it has on revenue.  Marketers that want to turn the tide of their marketing impact need to begin taking the steps to define a lead management process. Doing so will lead to increased returns, and quick alignment with sales.

Resolution 5 – Measure Your Marketing in Terms of Revenue

A 2010 Lead Generation Marketing ROI Study performed by the Lenskold Group and MarketingProfs showed that only 1 in 4 B2B marketers are using ROI or similar financial measurement to measure marketing effectiveness.  The study states that this rate has held steady over the last three years. MarketingSherpa also just released a survey that showed only 33% of marketers using email to track any kind of revenue component.

While marketers should certainly continue to track responses, clicks and opens, they must shift their thinking to tracking revenue as the top metric.  The rest of the organization tracks and marches to the beat of the revenue drum. Marketing must follow suit.  Clicks, opens and responses do not mean anything if they cannot be tied back to a revenue stream.

In 2011, marketers need to resolve that they will begin tracking and measuring their impact on pipeline, impact on new revenue and impact on customer retention/up-sell/cross-sell revenue.  When will inevitably give much more gravity and importance to marketing within the organization.

2011 is right around the corner. Instead of trying to predict what may or may not happen, take the necessary steps to make things happen. Resolve to mature in the B2B marketing role with these key resolutions, then get ready for another great year.

Posted in Lead Management Process, Marketing Automation, Metrics, Sales and Marketing Alignment | 1 Comment

Metrics – Tying it all Together

When speaking to our clients on issues of lead management, the one topic that seems to get the most attention is metrics.  As marketers, it seems that we are programmed to measure.  We want to know the return on our marketing spends. We want to quantify the impact of our lead generation programs. We want to prove numerically that we are having a significant contribution to the bottom line.  Some of us measure clicks, opens, conversions, leads, and almost anything else we can think of. Measurement is in our DNA. It’s inherent in what we do. So, it’s no wonder there are so many questions revolving around this very important area. 

In this, another post in ourLead Management Process Framwork TM  series, we’ll take a look at the area of metrics and its significance within the framework.

At the risk of stating the obvious, metrics are what determine the success or failure of our marketing and sales activities.  Yet, so many marketing organizations are struggling with determining what to track and how to track it.  As a result, many end up measuring with no clear purpose in mind.  Metrics are generated simply because “that’s what marketers do”.  What’s missing, however, are the answers to questions such as “What should we do with these metrics?”; “Are the right metrics in place?”; or, “How will these metrics be used to shape future marketing efforts?”  As a result, many marketing departments end up in one of two camps:  those who try to measure everything, and those that don’t measure enough. 

If you are looking to effectively use metrics as part of your lead management process, ask the following questions:

• WHY are we performing the campaign or activity?
• Demand Generation?
• Branding?
• Awareness?
• WHAT needs to be measured in order to show the success or failure of the campaign or event?
• WHERE will we obtain the data for the metrics?
• HOW will the business intelligence generated from these metrics be used to shape the future and benchmark against the past?

Let’s look at each of these questions a little more closely.

 

The Why & What?

 

Asking this question before each campaign will be the foundation of how you shape your metrics process.  I have recounted before on this blog how organizations conduct activities with no understanding of the reasoning behind them.  When it comes to metrics, this can lead to measuring the wrong thing leaving you to guess as to the success or failure of your campaign spend.  So, make sure to know why you are running the campaign, event or activity.  Set goals, and then measure against those goals. For example, if you are running a demand generation campaign, measure the following:

 

• Number of valid responses
• Number of Marketing Qualified Leads (MQL’s)  (be sure you define an “MQL”, as well as other terms, with sales prior to setting up your metrics – What Do You Mean When You Say That?)
• Number of Sales Accepted Leads (SAL’s) (including conversion metrics)
• Number of Sales Qualified Leads (SQL’s) (including conversion metrics)
• Number of Closed Deals
• Number of leads in the nurturing pipeline

Having the answer to these 6 simple areas will allow you determine success or failure, and give you insight into where you can improve for the next time.

 

The Where?

 

Most organizations have multiple systems involved in a campaign which means the metrics will need to be pulled from those various systems.  Make sure you identify what systems will be used and what reports will come from the various systems.  Marketing automation and CRM systems will be the most common, but don’t forget the information stored in finance systems, ERP or even customer service systems.  The more in-depth you go, the more likely you will need to include various systems and their data.

The How?

Perhaps the biggest gap seen in the area of metrics is the failure of organizations to utilize the business intelligence from the analysis.  Too many organizations pull the metrics, display them in their quarterly reporting to executives and then never look at them again

There is nothing better  than sound analysis of your metrics to help you plan your future marketing and sales activity.  Numbers don’t lie. Organizations that don’t use their metrics as a compass for the future are wasting valuable information and putting their future success at risk. 

Understanding the why, what, where and how of your metrics will enable your organization to improve in all facets of marketing.  It’s your roadmap to success and helps you avoid failure.  Your metrics tell a story, will help you avoid previous mistakes, and show you what is working.  Marketers who understand this and make this part of their overall lead management process will see a much improved return on their marketing and sales activity.

Posted in Lead Management Process, Marketing Data, Metrics | 1 Comment

Measuring for Dollars Helps Close the Gap

Over the last few days I have had a running discussion regarding the value and impact that marketing has on sales revenue.  The debate isn’t about IF marketing affects sales revenue.  After all, when sales closes on leads that were either generated or nurtured by marketing, then it’s certainly reasonable for marketing to take credit for having an effect on sales outcomes.  What the conversation is really about is HOW MUCH marketing affects revenue, and to what degree should they be measured on sales?  Or, to put it in the form of a question, “Why aren’t most marketing organizations measured or held accountable based on sales outcomes?”

Both “sides” tend to look at the argument differently.  Marketing makes the case, “We have no control over the sales process.  We can pass the sales team really good leads, and they can botch the sale on every one.  There’s nothing we can do, so to hold us accountable on sales outcomes isn’t fair”.   Sales responds with, “We have to rely on marketing for leads.  If they don’t provide us quality leads, then it becomes harder for us to sell. If they don’t do their job, then we don’t meet our numbers.”

This typical back-and-forth bickering is simply another example of the deep divide that exists between many marketing and sales teams. In this particular case, the issue is that marketing and sales are traditionally measured on completely different levels, and with completely different metrics.  But if both marketing and sales have the same ultimate objective, shouldn’t their being measured be more comparable? 

There is much that goes into aligning and integrating marketing and sales.  Metrics and accountability is one area that can’t be ignored when doing so. When it comes to rating both marketing and sales, it’s good to make sure both have the proverbial “skin in the game”.   For example, “closing rates on qualified leads” could be a measurement for both.  Marketing wants to see closing rates on qualified leads increase, so they work to provide the most qualified leads possible.  Sales also wants to see closing rates on qualified leads increase, so they work hard to close them when they come.  A team approach to a single metric, with both “sides”, dedicated to reaching the overall goals.

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For the Wrong Reasons

"Metrics" has been a buzz word in marketing circles for a long time.  It seems that more than ever, marketers are chasing the elusive ROI metric so they can prove that marketing really does make an impact on sales.  I won't argue that metrics are vital for marketing, or that companies would do well do invest in new processes and systems for measuring their effectiveness.   As a matter of fact, most executives I speak to know that they need to measure.  What kills me, however, is the REASON they say they want the metrics.

Too often, when I speak with marketing executives about metrics, and I ask them why they want to measure, the number one reason usually comes back as a  military metaphor: 

• - "I want to arm my marketing team so they can combat sales' when they
     attack, when they tell us that we don't provide any real value."
• - "I need the metrics to battle sales when they say that we don't generate
     enough leads for them."
• - "Having metric data allows me to defend my position."

(And we wonder why there's a gap between marketing and sales?)

Rather than using the metrics to arm yourself for battle, use metric data to improve upon past successes and avoid past failures. I rarely speak with or consult marketers whose mindset is to use metrics in this fashion. But it makes sense.  When it comes to metrics, the process should be…

Launch – Measure – Analyze – Adjust – Re-launch.

If your primary use of metrics follows this formula, you will exponentially improve the value of your marketing dollars. 

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How Much?

I had an interesting question posed to me a couple of weeks ago:  “What percentage of annual revenue should be allocated for marketing?”  While it was a legitimate question, it betrayed the questioner’s thought process.  He views budget allocation according to percentages, which can be a faulty and even dangerous way of trying to prepare annual marketing budgets.

Instead of using a rule of thumb percentage, we advocate using a “start with the objective” rule of them.  We used this practice effectively in the businesses we’ve managed, and also in helping clients to determine the answer to the aforementioned question.  The process goes like this…

• First, marketing needs to work with sales to determine annual revenue objectives and projections.  
• Next, marketing and sales should determine how much of that total is expected to come from new customers (as a result of marketing’s efforts), versus how much is expected to be generated from existing customers. The “new” sales number becomes marketing’s main objective.
• Next, use historical data to determine the revenue for the average sale, lead to close ratio, and cost per lead.  These three numbers will allow you to determine how many leads are needed to arrive at the sales goals, and what it will cost to generate them. 
• Finally, using those costs, marketing and sales together should determine (using historical data) which marketing communications methodologies will generate the number of leads needed to arrive at the agreed to sales objective. Then, allocate spending to each of those methodologies proportionately.
   
  Here’s an example of what we’re talking about…
  
• Total Sales Objective                                  $25,000,000
• Objective for “New” Sales (20% of Total)       $  5,000,000  
• Average sale                                           $         5,000
• Total sales needed from new customers                  1,000
• Lead to close ratio                                                20%
• Total leads needed                                              5,000
• Historical cost per lead                          $             50.00
• Total Marketing Budget for new business $      250,000

You can use a similar process to determine the budget needed for growing existing customers to arrive at the total sales objective.

By using this budget process and making sure sales is involved, you’ll be able to avoid an arbitrary percentage budget trap.  Instead, you’ll have a unified marketing and sales team, each knowing that the right money is being spent on the right activity.

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And the Objective is…?

More than once in my days at the various companies I’ve worked for, I would find myself sitting in a meeting when about half-way through, the thought would come to me: Why are we having this meeting?  (If I was in the right mood, I’d ask the question to the rest of the group.)  I think we can all relate to this scenario, and have all been in enough of those meetings, wishing we could have those hours of our life back.

However, this dynamic isn’t only related to meetings.  It’s something that occurs within marketing departments every day.  A few years ago, I was part of a group that was responsible for analyzing the ROI of our company’s marketing activities.  As we were reviewing our tradeshow participation, one particular show stood out like a sore thumb because of its lack of ROI.  So as any good marketing team would do, we highlighted that show and several others as bad investments.  We marked them as shows that we would not participate in the following year.  Then one of the team members who had helped plan that show said, “Our goal with that show was not to generate leads. We participated so we could gain awareness within the vertical.  In addition to a sponsorship, we had 3 speaking engagements to drive our thought leadership.” This new information changed our team’s view of the show completely, and it highlighted an important point:  in order to achieve the proper measurement, the objective needed to be stated up front.

If in the pre-show planning it had been stated that this show was an awareness generator, then our team could have developed our metrics accordingly: How many people attended our sessions? How many people stopped by our booth? How much signage and advertisement did we have among the show material and on the show floor?  We could have conducted a pre and post show survey to measure our company’s brand recognition.  Instead, we applied the same measurement criteria to this show as we did to all of the other lead generation shows.  As a result, we almost axed a very important show for the following year.

So remember, when developing and measuring your campaigns, understand the purpose of each activity.  And state it up front.  From there, it will be much easier to measure against that purpose.

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The Devil is in the Details

Years ago, I worked at a summer camp.  One of the jobs I was given that summer was to help construct a play fort.  I’m not talking about a little play house. I’m talking monumental, 75 feet across, “Custer’s Last Stand” kind of fort.  I remember one hot June day we were putting on the finishing touches which included cutting the railings for the top decking (told you it was huge).  Another worker and I were calling out measurements from the deck.  Two of our co-workers were on the ground, cutting the rails, and handing them up to us. For the first railing my co-worker from the deck called out, “36 and three-eighths”.  Obviously, he needed a piece of railing that was 3 feet and 3/8ths inches long.  However, the saw operator below first cut, then handed us a 3 foot rail plus three 8 inch long boards.  After all, the measurement called a 36 and three 8’s, right?

We learned a few things at that moment:

1.  The saw operator needed to be reassigned to something else besides carpentry.

2.  The saw operator was using the wrong measurement.

While this story is amusing (and one I tell often) it is not too much different that what many companies do today when measuring their marketing effectiveness:  they apply the wrong units of measurement.  Usually, the only stat that really matters to marketing professionals is ROI (see Counting the Losses – August 17).  They measure the results of campaigns at a certain point in time, assign an ROI, and are done with it.  But to do so is not much different then providing a 3 foot piece of wood and three more that are 8 inches long. There are other measurements that need to occur.  One of those measurements entails taking into account your sales cycle. 

One of the companies I did work for in the enterprise software market had a sales cycle that was 6-9 months.  Using a point in time measurement only skewed any kind of quarterly ROI numbers.  Certainly a few deals would close within the first three months of a campaign launch, but they weren’t the whole story.  The majority of deals would not be realized for nearly 9 months after campaign launch.  That’s why we created Pipeline Return on InvestmentTM or PROITM: measuring results in terms of what is put into the pipeline.  By including PROITM  in your analytics report you will get a more accurate picture of the true impact of the campaign, plus additional data to help determine sales’ close rates and forecasting accuracy.

By not including metrics such as PROITM in marketing analytics, much data is being left out, and measurement will be way off.

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Counting the Losses

We all know the big thing in marketing today is analysis and measurement of ROI.  These three letters make any marketing persons heart jump and pulse quicken as it is vital we show the continued value we are bringing to the business.  While measurement is very important (See the post "What Do They Want - July 20), it is only going half-way and not truly giving a representation of what we have done from our campaigns.

Companies launch a campaign, the responses start rolling in, they get passed to sales, the responses that turn into leads get counted, we track the leads that close and then derive the ever important ROI analysis (Note:  Some companies do this well, some do not). However, what most companies fail to do is to nurture and manage those contacts that did not go from response to lead, or lead to closed deal.  In essence they are left on the floor to dry up and die on the vine, even though the company has already paid for them.  So here we have good contacts who have responded to the message, which have been paid for and then ignored.

With this in mind next time a campaign is being measured it is only fair to measure LROITM or Lost Return on InvestmentTM.  This is the investment that has been made in responses and/or leads that go ignored and non-nurtured.  If the money has already been spent to get them, you have to measure this against your ROI to truly get an idea of the health of your marketing.

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