Tag Archives: Chief marketing officer

Marketing Win Revenue = Autopsy on a dead guy!

Marketing organizations are not exactly known for their desire or ability to measure the outcomes of their activities.  As a former director of marketing ops I ask myself:  Is it ability?  Is it lack of desire? Or, is it simply that marketers just do not know where to start?   As with any complex organizational discussion, it is likely a mix of the three.  My experience leads me to believe that most marketers just do not know where to start.  And those who have started are likely choosing all the wrong key performance indicators and metrics.

When I was still in my marketing operations role,  I would frequently hear from the marketing teams about how much win revenue we got from our marketing programs.   We were very fortunate that our organization had standardized our reportingCWprovided analysis capabilities to our program managers and the management team with standard dashboards for a single version of the truth.  Managing your business via lagging indicators is fine when you hit your target which we frequently did.

Still, something troubled me.  We knew what had happened and why but still could not answer what WILL happen.  Essentially, we could do an autopsy on a dead guy but could not predict what would kill him…Something had to change.

As a B2B marketing organization we subscribed to Sirius Decisions demand waterfalldemand waterfall In spite of this, our key performance indicators, metrics and business intelligence platform continued to reinforce the behavior that win revenue is king.  Our CMO was no longer content with seeing the results at the end of every quarter.  He wanted to know within a reasonable margin of error (+/- 10%) where we would end up each quarter.  We needed to change our behavior to do this, we needed to change our metrics…moving up the waterfall all the way to inquiries…and beyond.

Applying Predictive Analytics to the Problem

We were swimming in marketing data – contacts, inquiries, marketing qualified leads, sales qualified leads and win revenue.  What we needed to do is figure out what patterns lead to a person progressing all the way through the demand waterfall.   By applying predictive analytics, we were ultimately able to predict within +/- 5% how much win revenue would come from our marketing activities.

We took our contacts, marketing outreach data (emails, web, live events), inquiries, pipeline and win revenue and brought this data together in a predictive model. SPSS-Modeler This predictive model identified those contact job titles, marketing offers and marketing channels which would yield a successful marketing inquiry.  From here, we were able to extend the model to be able to forecast which contacts would lead to inquiries and which of those inquiries would convert to marketing and sales qualified leads.  With this knowledge in hand, we were able to conduct “what if” analyses and predict the optimal mix of contacts, tactics, and channels to meet or exceed targets.

Changing Behavior

Now that we were able to predict the mix of contacts, offers and channels, we decided to change the way we measured marketing moving WAY up the demand waterfall.  We implemented the following metrics:

  • # of contacts within each segment (industry and geo)
  • # of net new contacts added to the database (as determined by email address)
  • # of inquiries
  • Conversion % from inquiry to marketing qualified lead
  • # of marketing qualified leads
  • Net new pipeline created ($)
  • Conversion % from marketing qualified lead to sales qualified
  • Acceptance % by sales rep

Notice – no win revenue.  As a marketing organization we believed marketing is responsible for finding new names and delivering net new pipeline while sales is ultimately responsible for revenue.

We updated our reports and dashboards I spoke about in a previous post to reflect these new metrics and assigned targets to each marketing team based on our predictive models.

My thought: I would rather know early on that I was off target versus having to do the post mortem…what are your thoughts? Send me your thoughts @BrendanRGrady on Twitter.

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Can your CMO justify his seat at the board room table? Or is he still scrambling to justify marketing’s spend?

Too many marketing organizations rely on the fuzziness of marketing results without being able to confidently stand up and say:  “Look, this is what we spent and here is the revenue we got in return!”  According to the 2012 IBM CMO study, 63% of CMOs believe ROI will be the most important measure of success over the next 3 to 5 years.

In today’s economic climate, marketing leaders need to be able to confidently report on their results to justify their seat at the table.  We have all heard that analytics are key to improving performance but what does this really mean for marketing organizations?

As a former Director of Marketing Operations, I was challenged to help my CMO answer some difficult and challenging questions.  When asked to answer critical questions around ROI, I would struggle to find answers.  In the early days in my role, I would reply..let me go get that information for you.  I would inevitably return with a spreadsheet that none of the leadership team would believe.  Now imagine hundreds of spreadsheets floating around with different sets of results.  This led to many interesting and heated conversations….about the veracity of the data versus discussions about business performance.

I soon discovered the magic of Business Intelligence which enabled me to confidently answer leadership’s questions.  CWTo address the challenge of multiple versions of the truth we embarked on a journey which would change the marketing performance conversation forever.

Our journey began by defining the standard metrics and KPIs which would form the common language across marketing and sales.  This was by far the most arduous and difficult part of the initiative.  I would submit that it was the most important step in the entire process.

A "dashboard" is like a speedometer ...
A “dashboard” is like a speedometer that marketing professionals use to report marketing performance.

Once we had gained agreement it took about three months to provide a worldwide marketing scorecard to track performance against KPIs, 5 roles based dashboards to the leadership team, standard demand generation reports for 120+ demand generation specialists with the ability to do ad-hoc analysis to understand why certain marketing activities performed well while others did not.

So what changed?  The conversation about performance completely changed…for the better.  The marketing and sales teams defined a common language about how to measure the business.  With agreed upon KPIs, Metrics and a single, trusted version of the truth, the marketing organization focused on what matters – the marketing activities are performing and which are not.  In the end, by using the data in front of us and acting on it, the marketing organization improved open and click through rates, pipeline creation and conversion to revenue.

If you would like more information about this journey please contact me via Twitter @BrendanRGrady