In the latter part of the 19th century John Wanamaker, the father of modern advertising, is reputed to have said “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Imagine you could demonstrate and manage the impact of marketing on revenue? Imagine you knew which half of your budget was well spent?
For a B2B company with sales cycles of more than six months this may still not be easy. Notice we are not talking about a labor of Sisyphus, pursuing marketing ROI on a single marketing initiative.
Measuring the impact of marketing means being able to attribute revenues back to all marketing initiatives that helped accelerate and earn that revenue. Another alternative, tracking marketing lead sources, which is similar to “first touch attribution” and while easily implemented, is not a substitute for recording 100% of the marketing interactions with contacts during their buying journey.
To successfully attribute marketing to revenue requires marketers:
1. Record all contact interactions with marketing initiatives.
2. Associate known contacts with opportunities in your CRM.
3. Weight the valued marketing interactions fairly.
In the past ten years there have been several developments on the marketing technology front that aid us in overcoming these challenges. Marketing automation records prospect interactions with marketing initiatives.
Since Wanamaker’s time we have been able to record the cost of our marketing outreach. The problem was we didn’t know which half of it was being effective unless they placed the order immediately because we could not see nor measure their interaction with our marketing initiatives.
In an age dominated by Digital Marketing,measuring and recording the prospect responses with Marketing Automation opens the door to demonstrating incremental movements in the buying cycle as a result of each marketing interaction.
A second important technology needed to overcome challenge #2 listed above is the Business Intelligence (BI) platform. For the most part, firms and sales people associate opportunities with accounts, and rarely attach contacts to the opportunity. In the majority of B2B sales five or more contacts may be associated with the purchase process and buying decision, yet only one or none of the contacts are listed on the opportunity.
The result is that the recorded marketing interactions with the 5+contacts are not directly associated with the opportunity or revenue. Enter the BI system. Connect it to your Marketing automation and your CRM platforms, give it some business rules for making the associations between contacts and opportunities, and you have overcome the second challenge.
Now you have arrived at challenge #3. Do you give equal weight to all marketing interactions with all contacts associated with the account, for all time prior to the opportunity closing? Probably not. You will probably need to weight the value of the interactions based on their recency and type. For example, you may choose to discount all website visits prior to 3 months before the opportunity was created, and you may choose to weight a webinar attendance five times greater than a Slideshare viewing.
In summary, your steps to getting started on Marketing Attribution include the following:
1. Integrate your marketing automation system and CRM to leverage the campaign object in the CRM when recording prospect behaviors. This will at least give you some basic reporting and show you some of the gaps.
2. Document and refine your lead management process so that pipeline reports on leads (not just opportunities) can accurately record marketing’s efforts.
3. Deploy a cloud based BI system that has pre-built connectors to your MA and CRM.
4. Define your business rules, configure your reports.
5. Train your staff to leverage reports in making better decisions every day and add measured KPIs into their variable compensation plans.
The knowledge, skills, processes and technologies are finally here to help all the John Wanamakers in the marketing world redirect the wasted marketing budget into initiatives that help sales people sell more. What are you waiting for?
Blog post written by Jeff Pedowitz, President & CEO, and Kevin Joyce, VP of Marketing Strategy, The Pedowitz Group.