Marketing Analytics – Measuring What Matters in B2B
One of the things that drives me batty is when otherwise smart B2B marketers focus relentlessly on marketing analytics that measure things that are not important, while neglecting the big picture – a classic example of missing the forest for the trees. A recent blog post titled The Thorny Question of Marketing Attribution: Does it Apply to B2B illustrates this perfectly. The author, Ruth Stevens, talked about the difficulty of linking B2B sales with specific marketing touch points. The question is: Do you attribute the sale to the first prospect response, the last, or some weighted model?
This may sound heretical to some marketing analytics proponents, but I don’t think it matters all that much. There is no way to truly know where the buying motivation originated or which lead source pushed a specific deal over the line.
The prioritization of marketing metrics should always be based on your sales model. For example, an enterprise software company with a 12-month sales cycle would operate differently than a SaaS provider that uses a free-trial offer or a consulting services provider that has a four- or six-week sales cycle. Every one of these scenarios requires a different set of marketing activities, as well as different ways to measure and improve marketing analytics.
But, while they utilize different marketing metrics, these scenarios all have two important characteristics in common. First, the need to spend the least amount of money to attract the maximum number of customers — in other words, achieving a low cost per acquisition. Second, to achieve marketing metrics that are both consistent and repeatable. If you do these two things correctly, you will create your own Unstoppable Marketing and Sales Machine.
So how do you decide what to measure and how to present the data? Here are my five top rules for marketing analytics:
- Make sure that what you are measuring has value to both the executive suite and sales department. All the charts and data analysis won’t mean a thing unless the CEO and sales VP agree that what you are doing contributes to revenue.
- Create a dashboard to showcase your marketing analytics. Very few people (especially executives) prefer to look at spreadsheets when they can instead look at nice, graphic illustrations of how you are performing in a few key areas.
- Don’t measure anything you can’t act upon. Every one of your marketing metrics should lead to specific actions you can take to improve performance in marketing and/or sales.
- Make sure the marketing analytics you use are the back-end of a well-defined process. For example, research from our friends at MarketingSherpa shows that only about one quarter of B2B companies have a lead generation and follow-up process that is routinely followed. All the marketing analytics in the world won’t help you if you don’t have your marketing act together.
- Make sure the other guys measure their part of the process. If you are a marketer and have promised specific performance in terms of generating awareness, inquiries and qualified leads, then make sure the sales department acknowledges what they will achieve in terms of closing deals.
- Focus on no more than four or five key marketing metrics. Here are four we typically focus on for our B2B clients:
- Cost per lead
- Cost per customer acquisition
- Conversion ratio of inquiries to qualified leads
- Conversion ratio of qualified leads to sales
I hope you found this information helpful. Spend your time focused on the right marketing initiatives, execute them relentlessly, and measure the few “actionable” things that truly matter.