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Introduction
We’ve been hearing it for some time
now—marketers need to earn a seat at
the revenue table. But how do you go
about doing that? It all comes down to
proving—and improving—marketing’s
contribution to the bottom line using
metrics that matter.
For too long, marketing has been seen
as a cost center. And it’s not hard to
see why—marketers have traditionally
struggled to quantify the return on their
marketing spend. It’s no wonder, when
they have been focused on metrics that
undermine their credibility in the eyes
of executives. We’re talking about vanity
metrics such as Facebook Likes and the
number of Twitter followers that sound
impressive but don’t measure the impact
of revenue on profitability.
We also mean activity metrics that
measure what you do—such as record
webinars, write blog posts and run
campaigns—instead of the result and
impact of those activities. We are also
referring to metrics that frame marketing
in terms of costs instead of outcomes
and revenue contribution. If you report
on your cost-per-lead, for example,
you’ll only be asked to reduce that cost
over time.
If you can’t pin down the revenues your marketing initiatives and programs are driving, how can you make smart decisions about future spend?
2 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
Monitor Success with the Right Measurement Tool
To elevate your status and value in the
organization, you need to measure Key
Performance Indicators (KPIs). A KPI is
any measure of an activity for a marketing
or business initiative that allows you to
understand the ROI of your activities. This
refers to the programs, messaging and
content you create and share using your
marketing automation platform.
KPIs are important because they
demonstrate how marketing impacts the
business. They indicate both progress
and challenges, and provide a benchmark
so marketers can continually evolve and
improve their efforts. By using a proper
mix of tactical, strategic and operational
KPIs, marketing can quickly and
emphatically evolve into a revenue center
and earn a seat at the executive table.
KPIs allow a better understanding of where to allocate marketing budget based on where you’ve realized success—or failure—to date.
3 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
Tactical KPIs are the Best for Channels
These metrics are relevant and valuable
for marketers to understand how well
they are performing in a specific channel,
such as email, mobile, social, and the
web. Measurement usually centers
around buyer behaviors, such as opens,
clicks, page visits, content downloads,
and form submissions. In addition to
understanding performance by channel,
marketers, such as the Director of Email
Marketing, the Manager of Social Media,
and Director of Mobile Messaging can
identify how to optimize their programs
and initiatives going forward.
Tactical reports are usually generated on
an ad-hoc basis, after a certain program
is deployed, such as an email campaign
or new tab on a social media page. For
most marketing teams, this translates into
weekly or monthly reports like the one on
the following page.
5 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
Tactical KPIs are best for channels
Figure 1. A tactical report measuring email performance
Email Name
Top Ten BestPractice Lead Mgmt
Landing PageeBook
45
1
41
1
29
0
48.8%
0.0%
12
0
29.3% 60.0% 0 0.0%
0 0.0%0.0%
Leads SentLeads
DeliveredLeads
Opened % Opened Leads ClickedEmail
% ClickedEmailed
Clicked to Opened Ratio
LeadsUnsubscribed
%Unsubscribed
Lead Nurture WP
Blind Date LeadNurturing WP fulfill
89
141
87
130
59
65
67.8%
50.0%
75
90
86.2% 127.1% 0 0.0%
138.5% 0 0.0%69.2%
Lead Scoring WPfulfill
Best Practices LeadNurture WDFM fulfill
179
69
163
64
112
43
68.7%
67.2%
140
48
85.9% 125.0% 0 0.0%
111.6% 0 0.0%75.0%
Lead NurturingWDFM follow-up
B2B Lead MgmteBook fulfill
78
14
68
14
34
7
50.0%
50.0%
19
8
27.9% 55.5% 0 0.0%
114.3% 0 0.0%57.1%
Freetrial Followup 145 157 65 41.4% 2 1.3% 3.1% 1 0.0%
6 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
Strategic KPIs Empower Executives
Because tactical KPIs do not typically
provide a level of detail that the CMO and
other executives care about, marketing
teams should also track strategic KPIs.
These KPIs are typically focused on results
rather than buyer behaviors. In other
words, they help determine marketing
performance in general versus measure
specific behaviors like opens and clicks.
For instance, strategic KPIs can provide
insight into how many new opportunities
were created as the result of combined
email programs over a recent time frame.
Or how much additional pipeline was
driven by marketing, how many of those
opportunities closed, and in turn, how
much was generated in revenues.
These KPIs can also help quantify the ROI
associated with incremental pipeline, or
how marketing is impacting up-sells and
cross-sells, for example. The likes
of Directors of Digital Marketing and VPs
of Demand Generation, and sales and
marketing, are the ones most interested
in these measurements. While a Director
may want to see these reports on a
weekly basis, a VP may choose to
review them on a monthly or quarterly
basis, while the CMO may only look at
them annually.
7 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
Strategic KPIs Empower Executives
In this strategic report, you can
see lead sources across multiple
channels, including which channels are
garnering the most leads, the number of
leads converting to opportunities, and the
amount of time for that conversion. Such
a report illustrates, for instance, how the
VP of Digital Marketing is performing.
8 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
Lead Source
Trade Show-Virtual
Trade Show
Online Ad
Website
Sponsorship
TeleProspecting
Webinar
Sales Outbound
User List Upload
List Purchase
42683
30930
30717
18167
17926
15977
8828
8114
7919
6849
0.48%
1.32%
0.65%
5.72%
0.60%
0.15%
0.23%
10.12%
1.09%
0.44%
243
210
255
101
322
217
75
134
166
267
207
408
199
1040
107
24
20
821
86
30
Number of LeadsLead to Opportunity
Conversion RatioAvg Days to ConvertLead to Opportunity
Number of Leads(Converted to Opportunity)
Figure 2. A strategic report measuring top-performing lead sources
Figure 1. A tactical report measuring email performance
Another strategic report in Marketo, called Program Analyzer, allows you to evaluate
all channels in a single spot. For example, you can determine which channels are
generating revenues, see pipeline creation, and more. Plus, you can drill down to
understand the programs behind these results.
9 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
RECOMMENDED STRATEGIC REPORTS
• Number of new inquiries
• Number of active leads
• Leads per lead stage
• Success path acceleration
• Number of touches to conversion
• Last touch to conversion
• Pipeline generated
• Revenue generated
• Campaign ROI
• Program analyzer
• Success path analyzer
Figure 3. Marketo Program Analyzer report
Figure 1. A tactical report measuring email performance
Strategic KPIs Empower Executives
Operational KPIs Get Everyone in Sync
Operational KPIs are typically indicators
for how well—or poorly—your cross-
functional teams are aligned and help
pinpoint bottlenecks in the sales funnel.
An example of an operational report
is one showing the quality of leads
generated by marketing and passed to
sales. We call this a “kickback report”.
This report shows the number of leads
rejected by sales and the reasons for
those rejections. With this information in
hand, the organization can understand if it
is generating the right types of leads and,
if not, what needs to change to connect
with the target audience. Specifically, a VP
of Commercial Operations and the CMO
can better align teams and accelerate
lead and opportunity throughput.
While operational KPI reports can be
generated on a monthly or weekly
basis, they are most often produced in
support of quarterly and annual planning
meetings and performance reviews. The
focus is on understanding performance
to date and how the organization can
improve going forward.
10 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
The sample Success Path Analyzer report from Marketo in Figure 4 shows where new
leads are injected into the funnel, where they are leaking out, and where the handshake
between marketing and sales is less than optimal. With this insight, executives can best
determine how to improve conversion rates and funnel throughout velocity.
11 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
Operational KPIs help those with a vested interest in cross-functional teams understand operational improvements that can lead to higher revenues.
Figure 4. Marketo Success Path Analyzer report
Figure 1. A tactical report measuring email performance
Operational KPIs Get Everyone in Sync
Conclusion: Earn Your Seat at the Table
If you collect traditional marketing
metrics to support your decision-making,
you may very well be setting yourself
up to remain on the periphery of your
organization. Most of these metrics are
meaningless to key stakeholders because
they don’t tie directly to revenues.
To gain a seat at the revenue table, track
tactical, strategic and operational metrics
that help you connect the dots between
marketing programs and tactics and
your contribution to the top line. In other
words, speak the language of business
using metrics that matter.
12 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS
Marketo (NASDAQ: MKTO) provides the leading marketing software and solutions designed to help marketers master the art and science of digital marketing. Through a unique combination of innovation and expertise, Marketo is focused solely on helping marketers keep pace in an ever-changing digital world. Spanning today’s digital, social, mobile and offline channels, Marketo’s Engagement Marketing Platform powers a set of breakthrough applications to help marketers tackle all aspects of digital marketing from the planning and orchestration of marketing activities to the delivery of personalized interactions that can be optimized in real-time. Marketo’s applications are known for their ease-of-use, and are complemented by the Marketing Nation®, a thriving network of 400 third-party solutions through our LaunchPoint® ecosystem and over 50,000 marketers who share and learn from each other to grow their collective marketing expertise. The result for modern marketers is unprecedented agility and superior results. Headquartered in San Mateo, CA with offices in Europe, Australia and Japan, Marketo serves as a strategic marketing partner to more than 3,400 large enterprises and fast-growing small companies across a wide variety of industries. For more information, visit marketo.com.
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