Good old ROI – are we seeing the light at the end of the funnel?
June’s Sales & Marketing Forum covered some ‘modern classic’ B2B marketing challenges.
Cisco’s Suzannah Darlow, and B2B Marketing Magazine’s Joel Harrison, kick-started the discussions energetically and the conversations on the tables took up the thread with gusto. Here on the blog I’m adding a few personal reflections from the night.
First up is ROI. Some might call this a hoary old chestnut of a topic – so why did we think it was a great time to talk about it?
For the last few years, the B2B Awards entry requirements have specified the need for clear, demonstrable ROI. We used to wonder how many people could really say that with confidence.
But it feels like it’s now that we’re starting to see some real progress. Marketers are talking less about presumed or potential returns. They’re not limited to questionable metrics like click-throughs or column inches.
We’re seeing more and more cases where we talk in terms of actual revenue delivered. Where we can say with confidence, ‘It’s The Marketing Wot Won It’.
This is transforming perceptions of marketing in the business
When it’s simply seen as a cost centre, marketing is likely to find its budgets on a downward slope. But with more clarity around ROI objectives and results, you can communicate the value of good marketing a lot more clearly.
It’s a subtle but quite powerful culture change, and sales are inevitably being drawn closer to marketing:
- Collaboration and ownership –there’s more understanding from all sides of what needs to be delivered, and greater commitment to achieving a mutually agreed target.
- Proposals rather than demands – requests for support from sales are starting to come with a nascent business case attached.
- More scrutiny on the real value of activity – e.g. reducing the number of events that serve only as ill-defined ‘flag-waving’ activity, or sponsorships that persist only because ‘that’s the way we’ve always done it…’
What does the journey look like?
Making this happen is easier said than done, of course. Those marketers in the room that are driving these changes spoke of the investment in time and effort up front.
They took the time to do the necessary – really understanding their sales and marketing performance and predicting the returns. It meant crunching some numbers to arrive at the percentage chance of a lead converting – and how much those leads would probably be worth.
Then they sense-checked how these figures would fit with the overall business plan and targets.
They also had to face the fact that fresh marketing leads in new accounts may not always be the easiest or most lucrative option for sales in the short term.
When to measure, and what…
Marketers are terrible with statistics, a sceptical colleague of mine (an Oxford physics graduate) often says. Sometimes he has a point. To measure returns properly, we need to think carefully about what we measure, and where we draw the lines.
By focusing on clear, demonstrable ROI, not just click-throughs, registrations and canapés eaten, we’re making a good start. But focus too narrowly and we’ll get all kinds of statistical lemons.
This is increasingly important in the context of longer programmes of content-driven lead-gen and nurturing. These may involve a number of touchpoints and next steps which all play their part in taking the audience on a clear, natural journey.
But if we attribute leads to just one phone conversation, just one event, or just one quirky DM in that journey, then these individual parts might be seen as a spectacular ROI success or dismal failure. Either way, they’re completely out of context.
If this sounds like the bleedin’ obvious, it’s nevertheless an easy habit to slip into. Especially if you’re not doing coherent joined-up programmes and you’re stuck down in the thick of it delivering multiple disparate campaigns…
Striking the right balance between the whole suite of activities, while still making sure the constituent parts are doing their job properly, is key.
One step at a time or a Big Bang?
Nearly all the marketers in the room felt they were making progress on ROI. It showed that driving this kind of change isn’t as intimidating as it might sound.
It doesn’t have to be part of a Big Bang, hitting the pause button while transforming an enterprise’s whole approach to marketing from the top down. Although that can certainly focus the mind!
We’ve seen plenty of evidence of marketers changing mindsets and performance by getting stuck in at a campaign level:
- Engaging more closely with annual sales objectives in detail and carrying out planning with them.
- Questioning legacy arrangements and shifting away from ad-hoc content and interactions.
- Understanding the role of engagements along the whole funnel – and clearly communicating their value to the business.
There’s another facet of marketing that we discussed at the Sales & Marketing Forum that won’t necessarily profit from a big, transformational approach. This is social media, which I look at in part 2.
Part two: Social Media (ROI)