Measuring ROI from B2B Marketing: Part II
Every marketing tactic has unique properties that influence the value that can be assigned relative to its cost. Whereas Part I addressed ROI on a macro level, this post focuses on how to value the most common marketing and communication programs on their individual merits. Online Advertising Even though display advertising can and should be measured through to a conversion (easy to do in Salesforce), expectations for clicks should be within those of industry averages (.2-.5%), with even lower expectations set on driving leads. The possible exceptions would include programs specifically geared toward capturing contact information prior to authorizing the download of a research paper or other thought leadership piece.
Key metrics: Impressions (eCPM) Clicks (eCPC) Leads (eCPL) – may include leads attributed to the campaign that did not come from a click Sales (eCPA)
Benchmarks: Compare CTR against industry averages and past campaigns to reflect engagement Compare CPM against other publications with comparable audience reach/composition Compare lift in awareness against competitors (third party) during the flight periods
Recommend: Track site visitors and associated leads by traffic source
Print Advertising Print advertising, while more expensive and less measurable than online ads, should be considered in any ROI analysis. Measuring the impact of print ads can be accomplished with a specific call to action or program (custom landing page, guarantee, contest, promotion, etc.), but its effectiveness is more often relegated to the level of confidence management has in a publication’s ability to reach a qualified audience.
If not centered around a specific promotion or product launch, investment in trade publications is best kept to special issues tied to your industry, which is often tied to a specific industry event.
Key metrics: Impressions (eCPM)
Benchmarks: Compare CPM against other trade pubs with comparable audience reach and composition Compare lift in awareness of the company during the flight periods
Recommend: Create CRM lead source for “print advertising” and train Sales to associate related opportunities
Paid Search (SEM) Search engine marketing serves both awareness and a demand generation objectives. However, paid search will always drive some number of unqualified leads and a process must be devised to manage them without becoming a distraction for Sales. While sometimes a nuisance, the value of SEM for awareness, as a defensive measure against competitors’ efforts and the occasional opportunity to land a substantial new client make paid search worthwhile to continue testing and measuring for its effectiveness.
Key metrics: Impressions (eCPM) Clicks (eCPC) Leads (eCPL) Sales (eCPA)
Benchmarks: eCPL against past SEM campaigns eCPA against total ad spend
Recommend: Track site visitors and associated leads by traffic source.
Event Sponsorship Regional and vertical event sponsorship can create great awareness and meaningful interaction with qualified prospects. While practically speaking there will always be impressions made and conversations had that will be impossible to track, Marketing must develop a process for entering information from business cards obtained at events into the CRM system.
For this to work optimally, sales leadership must take a proactive role in ensuring opportunities from events are captured as thoroughly and accurately as possible. For example, a conversation with a former client where no business cards are traded but it results in securing an RFP needs to somehow be attributed to participation in the event. Or when a lead captured at an event gets passed from one rep to another it needs to be entered accordingly.
Key metrics: Potential audience – Reach/Frequency of the event’s advance promotion efforts Actual audience – How many people attended the event? Share of Voice – How well were we “heard” at the event? Conversations – How many people did we “touch” during the event? Leads – How many new contacts/leads were put into the CRM system (eCPL)? Opportunities – How many new RFPs were generated from new or existing clients (eCPL)? Sales – How much booked revenue from our participation in the event (eCPA)?
Benchmarks: Survey company representatives afterward to compare against other sponsored events Compare revenue between regional event investments (holds regional sales reps accountable) Compare revenue between vertical event investments Compare regional events to effectiveness of vertical events
Recommend: Create a lead source option in CRM for each sponsored event and track qualified leads/opportunities accordingly
Hosted Events Investment in a company’s own custom events arguably attract a more highly qualified audience because the invited guests are its most important clients and prospects. For this reason, it is less likely new business cards will be obtained for entry into the CRM and it will be more difficult for Marketing to measure the effectiveness without direct input from Sales about new opportunities obtained as a result of client interactions during or immediately following the event.
Key metrics: Potential audience – How many people did we reach with the invitation (Sales must help) Actual audience – How many people attended the event? Opportunities – How many new RFPs were generated from new or existing clients (eCPL)? Sales – How much booked revenue from our participation in the event (eCPA)?
Benchmarks: Survey company representatives after each event to compare against all sponsored events Compare revenue derived from our own events against each other
Recommend: Create a lead source option in CRM for each sponsored event and track qualified leads/opportunities accordingly
Webinars/Conference Calls/Podcasts Webinars can be used for a combination of awareness, thought leadership and lead generation. Similar to custom events, webinars generate a highly qualified audience since the company typically controls the guest list. Although costs increase when partnering with another entity, so does the size and potential to reach new prospective clients. Unlike live events, it is much easier to track the effectiveness based on the number of people who register and attend the event.
Key metrics: Potential audience – How many people were invited to the webinar? Registrations – How many people signed up to attend the webinar? Attendees – How many people actually attended the webinar? Opportunities – How many new RFPs were generated from new or existing clients (eCPL)? Sales – How much booked revenue from our participation in the event (eCPA)?
Benchmarks: Compare growth in attendance over each webinar Compare growth in sales over time, including impact of different topics or marketing partners
Recommend: Import event registration information into CRM and track leads accordingly
Conference Speaking Opportunities Part event marketing and part public relations, speaking at conferences cannot be overlooked for its value in the marketing mix. The challenge with measuring speaking opportunities is that we often have no way of knowing the actions taken by audience members who were positively influenced by something our executive says on stage. If the speaker interacts with a prospective client, their information should be passed to a sales rep and recorded in the CRM, yet this easier said than done since the CEO does not (nor should he be expected to) think about ROI measurement from marketing at this granular level. Therefore, it is beholden on everyone in Sales to be mindful of where every lead comes from and to track it accordingly.
Key Metrics: Number of qualified speaking engagements secured (monthly/quarterly/annually) Number of leads that can be directly attributed to speaking opportunities
Benchmarks: Number of our speaking opportunities compared to prior period (monthly/quarterly/annually) Frequency of individual competitors appearing on stage during comparable periods
Recommend: Create a lead source for each event where we speak and track qualified leads accordingly Hold PR firm accountable for number of speaking opportunities
Public Relations The ability to consistently secure editorial coverage will build awareness, lift overall industry perception and increase sales as described above. But the more quantifiable metrics are the number of editorial placements, and to a lesser degree the type of placement (mention, roundup, feature, etc.) and how prominently a company is featured therein.
In years past, an accepted measurement of ROI from public relations investments was to calculate the advertising rate for the comparable amount of space secured. Today, systems offered by companies like Vocus, United Business Media and PR Newswire offer monitoring across all media with sophisticated scoring to measure things like:
• Type of media • Type of coverage – feature story, profile, mention, round-up, etc. • Quality of coverage –positive, neutral or negative • Consistency, frequency, message saturation and diversity of coverage • Share of voice against competitors
Depending upon the size of company and the importance it places on editorial coverage, it may be worth investigating third-party PR monitoring services, but often management is satisfied with simply being mentioned consistently in key trade publications and business press.
To the extent that editorial coverage secured can be directly attributed to a lead or a sale, that information should be captured in the CRM. This can be as simple as adding “editorial coverage” in the lead source field, to indicate when a new opportunity comes from any form of editorial coverage.
Key Metrics: Number of editorial mentions in trade and business press (monthly/quarterly/annually) Number of leads that can be directly attributed to editorial coverage
Benchmarks: Number of editorial mentions compared to prior period Number of editorial mentions of competitors in comparable time period
Recommend: Hold PR firm accountable for quantity, scale and frequency of trade media placements Hold PR firm accountable for number of placements in trade analyst coverage Create lead source for major editorial coverage and associate web and sales leads accordingly
Social Media While a social media presence is not always a high priority for B2B marketers, it is advisable to at least maintain a Twitter handle, a Facebook page and a LinkedIn company profile, which need to be updated consistently in order to remain credible. Social media activities are relatively low cost to maintain (an hour or two per day of a junior level marketing staffer or intern). While it may be difficult to directly attribute revenue to the social channel, it is highly measurable in other ways and can be a big driver of awareness and thought leadership.
Key Metrics: Frequency of blog posts, Tweets and LinkedIn and Facebook status updates Number of Twitter followers and Facebook “Likes” Traffic to blog page
Benchmarks: Compare by channel to frequency of key competitors’ audience size and frequency of updates
Recommend: Report amount of hours spent and frequency of communication by each social media channel
Website Traffic and Analytics A company’s website is the transom across which leads that cannot be attributed to a specific program will make their way into the company’s sales process. Monthly or annual benchmarks for traffic and leads should be established, but more importantly just looking at and discussing site analytics can lead to great marketing opportunities.
Key Metrics: Monthly unique visitors Number of leads via the contact form Source of traffic and leads
Benchmarks: Compare recent traffic and lead patterns to those immediately following the launch of a new site
Recommend: Monthly reporting of unique visitors and leads
Client Communication Communicating with clients and prospects via e-mail is relatively easy and inexpensive and a newsletter can drive leads by introducing new products, promoting a hosted event or just serving as a trigger to remind a buyer to include the company on its next RFP. Whether completion of a lead form is tracked from a click or you rely on reps to indicate that a client mentioned having received our email, leads from dedicated mailings and newsletters should be tracked in the CRM whenever possible.
Key Metrics: Size of mailing list and frequency of sending to the list Email open rate and click rates Lead forms completed as a result of clicks from within newsletters
Benchmarks: Compare size of mailing list, open rate and CTR trends over comparable periods of time
Recommend: Report on frequency of client communication, open rate and number of leads generated
Product Marketing and Collateral While not an obvious marketing program expenditure, marketing typically spends an inordinate amount of time on product positioning, differentiation, launch promotions and collateral. For the most ROI-obsessed marketers, a field for “product marketing and collateral” can be created in the CRM as a place for sales reps to track when a particular sales deck, individual piece of collateral or knowledge they obtained from a product specialist resulted in their winning a piece of new business.
Key Metrics: Number of man-hours spent on product marketing related programs Number of opportunities cited by reps as being the result of product marketing initiatives
Benchmarks: Compare growth of new opportunities from product marketing over comparable time periods
Recommend: Identify a new vertical (Education) or product (Brand-DR Connect) and measure product sales
Instilling ROI Values in the Organization
To avoid the traditional tension between sales and marketing, align their objectives from the beginning under a common value proposition and goal. Marketing can take on planning, implementation and measurement of programs while Sales is recognized as the catalyst for winning deals. Account management (operations) also has a role in retaining customers and increasing their lifetime value.
Avoid Sales not entering leads through training and by making the lead source a required field in the CRM. Sales should also be discouraged to attribute leads to a marketing activity just because they want to “help” Marketing. Incentives should be focused on encouraging an honest assessment of where leads come from and enlisting everyone on the team in tracking our ROI so we can make more intelligent decisions about where to place our marketing dollars based on real experience about what works and what doesn’t.
Key recommendations for measuring return on investment from marketing can be summarized as including:
• Enlist Marketing in refining metrics and benchmarks and determining specific goals • Make lead source a required field in the CRM and frequently update lead source picklist • Enlist PR firm in defending their value for media relations activities and reaffirm goals • Train Sales about the importance and how to properly account for marketing-related leads • Regularly analyze deal size by source • Undertake win/loss analysis to determine LTV measurement
Multiple touch-points with an audience, at varying costs and at varying scale and quality will influence each sale, make it difficult to attribute revenue to any single marketing program. Attempting to create a common unit of measurement or scoring system across programs, while possible in theory, would be a futile effort since integrated marketing by its nature is designed to leverage the combined effect of all programs rather than any individual component.
Although it is useful to understand which marketing programs drive new business most efficiently, and the marketing organization can use the key metrics and benchmarks contained in this report to make future recommendations, ultimately management and investors should be more concerned with the cost to acquire a qualified lead (eCPL) and the most effective rate at which to drive awareness (eCPM).
How we make decisions about future expenditures is dependent on our personal experience, recommendations based on others’ experience and our belief in the audience composition of a particular program as described by sales people presenting new opportunities we may know little about. Sometimes the risk of not participating in a program can be as much a determining factor as there being a high likelihood for something positive to come of the investment. No matter what the program or how it was selected, there is always the need (and likely the ability) to test and verify.
The primary reason for tracking the return on marketing investments is to make better decisions about where to make subsequent investments based on the success of prior decisions. However, there are no guarantees that any investment in marketing will result in acquiring a new client or maintaining an existing one. The metrics, benchmarks and recommendations contained in this post are merely guidelines and observations based on my experience. I would appreciate your feedback, as I continue to understand and share insights on this important topic for B2B marketers.