Organisations expect CMOs and marketing departments today to provide quantifiable results, proving that marketing activities increase the sales pipeline and thus the budget assigned is justified. Marketing is accountable for their footprint in the sales funnel. In essence you have to be able to trace a customer and their buyer’s journey back to the influence that your content had at the very beginning of their buying decision.
Metrics & goals go hand-in-hand
MROI doesn’t necessarily translate into maximising profit in the short-term. It can translate as the number of new leads in the pipeline. Setting metrics goes right back to the idea of planning what you want to achieve with SMART goals. If you are calculating metrics without thinking about your goals, and you’re not sure what figures you are trying to reach, your endeavours become pretty worthless.
The business decision-making context
There are a number of ways to analyse your marketing efforts – but the decision-making context indicates which are best to use. When your management team are looking to evaluate MROI to make a strategic business decision (such as your annual lead generation spend), a channel specific metric (such as email marketing click-through) is not an appropriate measurement to provide. These metrics should be used by the marketing team to form the strategy piece, but to demonstrate their impact to the bottom line, these figures must be married up with conversion rates and therefore estimated pipeline value generated from these channels.
So, why is demonstrating marketing ROI such a challenge?
Two key challenges which INCo have come across are:
- Timescales – Your investment in marketing has no end date. The money which you invest today may have impact well into the future. A new piece of content can have immediate conversions, but also continue to bring in prospects months or even years down the line.
- Multi-channel marketing campaigns – With multi-channel marketing, you have a wealth of different touchpoints to engage with prospects and lead them down the funnel. However, this can make it hard to evaluate each channel in isolation.
An Inbound Marketing platform
An Inbound Marketing tool such as HubSpot is an invaluable resource. Across each element, such as landing pages, you can analyse leads generated. With social media you can look at the impact as a whole or break it down to each in isolation (Facebook, Twitter, LinkedIn and Google+). For each prospect you obtain a wealth of intelligence on the journey they have taken with your organisation, for example the source they originated from and which pages they have viewed. The reporting function allows you to compare time periods like-on-like, and view how many conversions a channel has had over a set time period so you can analyse the length of time it is taking for a return on your efforts.
At INCo, we use 6 key metrics to analyse MROI. Our cheat sheet – The 6 Marketing Metrics Your Boss Actually Cares About – detail these 6 metrics, how to use them and what they tell you about your marketing efforts. Of course, as B2B lead generation experts, everything boils down to leads and estimated pipeline creation.
Measuring the impact of your marketing comes down to setting your goals, and the metrics you use will differ depending on the business decision-making content (leads, leads and more leads!). Conversion rates and estimated pipeline value which stemmed from these channels allow marketing to provide quantifiable results.