One of the biggest challenges facing marketers has always been how to quantify and measure the results of their marketing efforts. For decades, we’ve relied on very soft measurements like “impressions.” But, your company doesn’t get paid for impressions. You get paid when you make sales.
Thus, the better way to measure the effectiveness of any marketing campaign is by measuring the number of sales that result from that campaign, or, in an industry where there is a long sales cycle that relies on the performance of a sales team, you can measure the effectiveness of your marketing based on the number of sales-qualified new business leads that are created and passed off to the sales team.
Sounds great, right? Just measure these important metrics instead of the less-important ones. Easy. Except it’s not. Marketers have struggled for years to capture these metrics. However, as marketing automation tools have advanced over the past few years, we are now able to quite accurately attribute sales and new opportunities to specific marketing initiatives.
What You Need
Unfortunately, you can’t just push a button and have these metrics delivered to your doorstep. There are a few key things that are required if you want to easily and accurately measure these key metrics:
1. Dedicated use of a CRM. When trying to measure the ROI of your campaigns, it is very important that you have the best and most complete data possible. Your sales team needs to religiously use a CRM, inputting all the relevant data as accurately as possible. Particularly, you must be doing all of the following:
- Adding all new opportunities into your account, and including info such as opportunity stage, the probability of closing, the potential revenue from the opportunity, and all of the contacts associated with the opportunity.
- Noting how the lead was created in the lead source field whenever new leads are added.
- Utilizing campaign tracking for all marketing (web forms, events, webinars, etc.) to note all contacts that were part of a specific campaign.
- Updating opportunities as they move through the different sales stages, and then marking when they close as won or lost.
2. Integration between the website, CRM, and marketing automation platform. A smooth integration between these three platforms will help make sure that the right data is being passed through automatically. For instance, when someone fills out a webinar download form on your website, you will want the user’s information to be passed into your marketing automation system, and a new lead to be created (or an existing lead/contact to be updated) in your CRM. You will also want it to automatically add an appropriate lead source, while adding that lead to the associated campaign for webinar downloads.
On the flip side, you need this integration in place so that your marketing automation system can pull the opportunity data, discussed earlier, back in from the CRM to be used in the ROI reporting.
3. A clear and agreed-upon definition of the stages of your sales process. Everyone on your team needs to have an understanding of when a lead becomes an opportunity, and what you are considering a marketing qualified lead (MQL) and a sales qualified lead (SQL). You will be reporting on how leads are moving through your funnel, so you need to be sure that everyone is on the same page when it comes to the definition of the various stages of that funnel.
What You Get
If you have all three of these things in place, then you are in prime position to pull accurate and actionable ROI data out of your lead development ecosystem. Each marketing automation platform provides different types of reports, but all of the major ones (Eloqua, Marketo, Act-On, Pardot, etc.) provide some level of ROI reporting. Since we use Act-On, I am going to outline some of the reports we see, but there are comparable reports in each of the other systems as well.
Revenue Impact Report
This report shows the overall impact your marketing efforts are having on your new lead and opportunity creation, and lets you track revenue back to the primary campaign that influenced each won opportunity.
Because your sales team is putting in accurate data into your CRM, and because your website is passing along a lead source whenever new leads convert by filling out a form, you are able to measure how many leads and opportunities are being created on a monthly or quarterly basis. Not only that, but you can also see which marketing efforts are resulting in the most new leads and opportunities based on the lead source. Lastly, you’re able to determine which campaigns are having the largest influence over won opportunities/closed sales.
If the goal of your various marketing campaigns is to create new leads and opportunities, then this is a very useful report to determine if your campaigns are successful. However, the goal of all of your marketing may not be to create new leads or opportunities, but to nurture existing leads and opportunities and move them further through the buying cycle and closer to making a purchase.
If that is the goal of your program, then you may prefer a slightly different take on ROI reporting – revenue attribution.
Revenue attribution is exactly what it says: a report that attributes revenue to all of your various marketing assets. This includes the email campaigns that you are sending, the various pages of your website, forms, webinars, etc. Any asset that a person might come into contact with — and that could possibly influence their decision to hire you — can be pulled into the revenue attribution report.
Typically, revenue attribution is done one of two ways: first-touch attribution or multi-touch attribution. First-touch attribution will attribute all of the revenue that comes in from a sale to the first asset that the contact engaged with. Multi-touch attribution, however, will give you a more full and nuanced picture, divvying up the revenue between all of the assets that a contact engaged with.
With multi-touch attribution, you should be given the ability to weigh assets appropriately, determining what percentage of the new revenue is assigned to each. For example, if a lead attended a webinar, it is likely that the webinar had a bigger impact on that lead’s decision to purchase than viewing any single web page, so you would give more weight to webinar attendance than to web page views.
As you continue to bring in more opportunities, this report can become very powerful, as you will start to see which marketing assets rise to the top of the list, displaying how much revenue each is responsible for influencing. With this data, you can make very informed decisions about which campaigns are pulling in the most return and where you should be focusing your time and marketing dollars moving forward.
While these two reports are specific to Act-On, the idea behind them is not. You should strive to pull this type of ROI information from your lead development ecosystem, no matter what platform you are using. If you are able to report on the success of your various campaigns in terms of dollars and new business opportunities created, you are in a much better position than those who only report on opens, clickthroughs, and impressions.