Key questions to ask to track and measure activity and results to improve your marketing return on investment
A number of recent surveys— including the recent Marketing Performance Measurements (MPM) study conducted by the CMO Council—all point toward the same conclusion: the majority of senior marketers believe that the primary objectives of marketing are to drive B2B sales leads, influence sales, increase customer retention and boost revenue.
The key is tracking and measuring results
Regardless of how these objectives are accomplished, one of the keys to improving marketing’s overall return on investment is the ability to track and measure activity and results. This view is supported by the MPM research, in which nearly 60 percent of CMOs surveyed reported that they plan to boost spending on ROI measurement over the next two years.
Accurate tracking and measurement of marketing activity and results allows you to concentrate future marketing investments where they will have the best returns and to reduce or eliminate marginal and nonproductive activities. It also helps justify investments in marketing to other C-level executives of your company.
Marketing for leads often plays a major role
Because B2B sales leads can significantly influence sales and therefore help boost revenue, increasing B2B sales leads is often one of the key objectives of marketing in the technology industry. This holds especially true for companies with big-ticket or complex products or services that are designed in by engineers, designers or architects, or have enterprise-wide applications affecting multiple stakeholders. These are “considered” rather than “impulse” purchases. And increasing B2B sales leads is even more critical for companies selling products or services through such indirect channels as manufacturers’ reps, distributors, resellers, and systems integrators.
The questions to ask to get the answers you need
To develop and implement the most productive marketing strategies and tactics for increasing B2B sales leads, CMOs need to have the right information at their fingertips. To get that information, you need to be asking your marketing team the following questions:
What is our average marketing cost per activity or result? By tracking and measuring cost per activity or result, you have a way to benchmark and improve results. Ask your team:
- What is our average marketing cost per inquiry? Per qualified lead? Per sale? Per up-sell, cross-sell, or renewal? Per reactivated customer?
- What are the costs associated with the same metrics when marketing is not involved?
- How do the current numbers compare to previous years or quarters?How much
What is the return on investment? Although the actual dollar amount of sales revenue linked directly to marketing activities often serves as the strongest indicator of return on investment, other criteria can be used to show ROI as well. Here’s a suggested list of questions to get you started:
- How much sales revenue has been generated as a result of marketing activities?
- What percentage and amount of the company’s sales has been assisted by marketing?
- What percentage of forecasted sales in the pipeline can be linked to marketing activities?
- What is the value of the average marketing-generated sales opportunity compared to opportunities found by sales without marketing’s help?
- How long has it typically taken to close marketing-assisted sales compared to those in which marketing hasn’t appeared to be involved?
- How much have results in all these areas improved compared to previous years or quarters?
What’s in the sales pipeline? Be sure to consider forecasted sales. Ask your team to find out:
- How many of the opportunities in the forecast came from marketing-generated B2B sales leads?
- How much of the forecasted revenue will be the result of marketing-generated B2B sales leads?
- What number and percentage of the target accounts in the forecast have been found via marketing-generated B2B sales leads?
Where do our best B2B sales leads or sales opportunities come from? Ask your marketing team to help you understand:
- Which lead generation campaigns have been the most successful?
- Which market segments have shown better results than others?
- Which media have generated the best results?
- Which “offers” have resulted in the highest number of inquiries?
- Which lead follow-up activities have generated the best results?
Don’t take no for an answer
Although it isn’t always fun for the creative types in your marketing team, it really isn’t difficult to track and measure marketing results. Start by telling your team that you can live with the fact that they won’t be able to track and measure every activity, result, or dollar in revenue. Ask them to focus on those activities and results that can be tracked and measured, and don’t worry about those that can’t. If your sample size is large enough, you can confidently project overall results from the measurable segment.
In today’s bottom-line environment, most technology CMOs cite an increase in B2B sales leads as a key objective of their marketing programs. To be successful in improving your marketing for leads and justifying your marketing investments, you must have answers to the questions noted above. Don’t take “I don’t know” or “We can’t” for an answer. Insist that your team get you these answers, and consider replacing those who can’t or won’t.