“I got my executive committee’s buy-in that it doesn’t make sense to try to measure some things we do in marketing.”

–CMO, Fortune 1000 Hardware Technology Company

I heard this on a call the other day with a B2B CMO.  When I hear it, I know that that marketing leader isn’t losing (too much) sleep at night worrying about how to demonstrate marketing’s value to the rest of the company.  This is the B2B marketing measurement Rubicon. It’s what separates those marketing leaders who don’t lose sleep from those who stand to lose their jobs.

The key is: Can you get agreement among senior, non-marketing decisionmakers on which marketing activities are worth measuring, and which aren’t, but are still valuable to do?

Because let’s face it, there is still and will continue to be quite a bit that B2B marketing functions do that is valuable, but still really difficult to measure in an airtight, attributable, CFO-acceptable way.  Earned media.  Brand building.  Air coverage and mass media preceding a new product launch.  The list goes on.

Here’s what I’ve observed from the network of 800 mid-market and large enterprises that make up CEB’s marketing membership.  Take a look at the graphic here.  Less than 5% of our B2B members are in a spot to get to true marketing ROI—in other words, they can tell you the return on each incremental dollar they spend in marketing vehicle A vs. B vs. C.  In this group, you’d mostly find high tech companies or vendors of marketing measurement technology.  They have data infrastructure advantages, target audiences that are digital dwellers (and thus highly trackable) and plenty of analytic chops.  Most B2B’s don’t have all three of those.

The next rung down—occupied by roughly 25% of the membership—are those who have crossed the value demonstration Rubicon.  We call this group “ROO” for return-on-objectives.  They have achieved c-suite agreement on how marketing should create economic value.  Underneath that, they have agreed to which related marketing activities are worth measuring and which aren’t.  They’ve gotten agreement that, for now, there are some activities marketing engages in that don’t have an easily attributable ROI.  They just don’t.  Not yet.  Maybe not in our lifetime.  But they’re still worth doing.

For those worth doing and worth measuring, they hold hands and agree to related objectives (e.g., cost-per-action; lead quality; brand affinity; new product awareness).  Those worth doing, but not worth measuring, they agree to hold marketing accountable for testing-and-learning on ways to show, even if partially, how that activity connects to economic value.

Next rung down, you’ve got about a third of B2B marketing functions that take a “piecemeal” approach to measurement.  They may have a dashboard (or more likely, several dashboards) they use to track various marketing activities somewhat systematically.  But the tracking tends to proceed from a “what can we measure? Let’s measure that” starting point, rather than a starting point of “this is how marketing creates economic value for us, let’s measure key related activities the C-suite agrees to”.

For those of you who are piecemeal-ers, there’s a tempting trap awaiting you.  Marketing automation systems and ever more trackable digital touchpoints promise greater than ever before visibility into your demand generation pipeline.  The trap is, if you go down the automation path without getting c-suite agreement on how marketing creates value, and what’s worth measuring and what’s not, you’re still going to lose sleep (or your job, eventually).  Because when the business has a bad quarter or two or four, questions about marketing’s value creation are still going to come at you.  And they’ll come most furiously at those marketing activities that are valuable, but tough to measure.  All of the marketing automation technology in the world still won’t save you, because it is powerless to help you with airtight attribution on those activities that are valuable, but tough to measure.

If you’re fortunate enough to be in a category where demand generation is truly the only thing that matters for marketing, then you’re fine.  But that’s a small minority.  For the rest, get c-suite agreement before you go down the marketing automation path.

Okay, enough “here there be dragons.”  The last group, way at the bottom there, we call “haphazard”.  You measure what you can, when you can.  But you’re not systematic about it.  For example, this campaign has four metrics, the next one has six, but only two are the same as the first.  None of the metrics connect all that well to true business value created—they dwell in the realm of “engagement” or other indicators of customer activity, but not economic value creation.

If you’re in this spot, you’ve got work to do.  Don’t try to go through “piecemeal” before you get to ROO.  Try to jump strait to ROO.  Lay the groundwork to have that foundational conversation with the c-suite about how marketing is expected to create economic value for the company.  Cross that Rubicon first, which may enable you to leapfrog piecemeal and jump to ROO, where you can hang out with the well rested kids.

MLC members, visit our planning and measurement topic center for more on measuring marketing’s value. Interested in talking more about measurement? E-mail me to get a copy of our latest research or to schedule a discussion.

If you’ve been on Facebook lately, you might think you have a lot of catching up to do. So many of your friends are liking pages, checking into places and downloading apps. Worry overmuch about your lack of activity? Worry not. These are Facebook Sponsored Stories. “Sponsored”, because someone paid for them to appear in your news feed. And why? Because peer influence works, or so they think.

Marketers have long tried every trick in the book to be a part of customer’s conversation, but failed. The reason is simple – brands want relationships with customers, but consumers don’t want a relationship with brands. Brand affinity is dropping across the board, and consumers report taking purchase decisions on the basis of in-the-moment factors. Consumers don’t trust brands, they trust each other.

So is this the end of marketing? Probably not. Marketing’s response has been more on the lines of ‘if you can’t beat them, join them’. Why not let your customers speak for your brand? That’s precisely what social advertising does. Social advertising is a form of contextual advertising where marketers use the context of a prospect’s social network to influence them. They achieve this by highlighting their friends’ interactions with the brand, in turn encouraging prospects to engage in similar interactions.

Social advertising is fairly new, but studies conducted so far indicate it has the following benefits:

• Enhanced Ad Recall: Nielsen recently conducted a study that featured two types of ads – banner ads that contained social information about people’s friends and ones that didn’t.  Ads featuring social information about known people are 55% more likely to be recalled than ads that did not feature such information.

• Increased Ad Efficiency: Comscore recently conducted a study on the efficiency of Facebook sponsored stories to deliver results. The study concluded that advertising with social context can double brands’ social reach among their fans’ friends. Individuals within the fans’ social networks are also more likely to purchase from those brands than average users.

As with anything new, marketers should definitely exercise caution while engaging in social advertising. This is especially because:

• Social ads may violate user privacy: Nobody else, but Facebook knows this best. Users recently slapped a $20 million lawsuit on Facebook for using their identities in sponsored ads without their permission. The moral of the story for marketers is that they cannot think of their customers as willing billboards. Not all customers endorse brands they are fans of and it might be too imaginative of marketers to hope they want to feature in ads representing these brands.

• The ROI is unclear:  Not to sound contradictory of what I said above, but there are not enough proof points of social ad efficiency, just yet. This is because contextual social ads have only just made their debut on social networks. It will be a while before a significant number of studies would be able to validate their efficacy – but there’s lot’s of evidence that they don’t influence sales.

As parting thoughts, smile please, you might be on an ad soon!

MLC members: Access the latest trends in digital marketing at our Digital, Mobile, and New Media topic center. Access our full studies on influencing today’s customers’ buyer behavior (available for both B2B and B2C marketers).

At our annual Sales and Marketing forum in Vegas last month, we took the opportunity to get 30 B2B CMOs in a room to discuss their biggest concerns and share advice.  While the details are confidential (what happens in Vegas…), I can share the key trends, all of which have major implications for the whole team.

Building better analytic and insight skills. Every CMO in the room agreed that building a better data and insight capability was a top priority – and that these skills were broadly lacking today. CMOs want deeper understanding of customers’ business needs to help craft more compelling value-based propositions.  And most plan to boost data/insight skills across the whole team as well as set up a dedicated team of analytic/insight experts. CMOs are looking for a variety of new skills to help here, e.g., ‘detective’ types with journalistic skills (i.e., the ability to spot key stories in swaths of data), marketers who also have a background in economics or financial modeling, and industry experts who’ll understand customers’ value chain better.

Rethinking the marcomm mix. Again, almost everyone agreed this was a major focus. There was unanimous agreement that some budget should be shifted from traditional channels such as trade shows, print ads and sales collateral to digital channels, but uncertainty about how much budget to shift or which digital channels deserved the most investment.  Search engine optimization was one of the most popular choices for investment.  Additionally, many CMOs also talked about how to revamp traditional channels and use digital to amplify their impact (e.g., testing out virtual trade shows or making all sales collateral virtual and giving reps iPads). One key implication from all this is that CMOs want to boost the team’s digital knowledge and know-how.  The consensus was that you need a few digital experts, but that everyone on the team should have a baseline level of comfort with digital marketing.

Rebalancing the team. As a result of new activities and new skill requirements, CMOs realize they need to restructure, but there’s a lot of debate around how.  Many people in the room talked about how to maintain consistency/cohesion despite more specialist roles.  One popular solution is to develop more “T-shaped” marketers who have deep expertise in one area, plus broad understanding of many disciplines.  Another is to set up a “hub-and-spokes” model with a few all-rounders (the hubs) whose role is to connect the dots between multiple specialists (the spokes).  There was also a lot of debate around how to manage more activities without more headcount – and very different approaches.  Some are outsourcing more, while others are bringing in more freelancers. Similarly, some are hiring more executors to churn out extra content (etc.) while others warn that there’s no substitute for strategic thinkers and cutting leaders can backfire.

Getting better at automation. There was a lot of excitement about the potential for CRM systems and automation to enable far more sophisticated marketing.  But more than excitement, the overriding feeling was a fear of missing out.  Many CMOs weren’t sure exactly how to take advantage of these new technologies.  And those CMOs who had invested the most in automation talked about challenges and complexity more than successes. There were talent implications here too, namely a need for more IT staff within Marketing and/or better collaboration with IT.

Proving Marketing’s value. This one isn’t new, but it’s still a top challenge many CMOs. For the CMOs at Vegas, this wasn’t just about measuring ROI – it was also about expanding Marketing’s role (e.g., to influence new product development or cross-functional customer experience initiatives).  And this, in turn, was about getting the rest of the business onboard.  The CMOs with the biggest successes here had set up regular meetings with key business partners to enable collaboration. As a result, a number of CMOs said they’re looking for marketers with better collaboration and influence skills, which in some cases means hiring people with more experience.

MLC members, we’ll be looking into most of these issues over the coming months – so stay tuned for more tips and advice on how to tackle your biggest marketing challenges.

** It’s the last week to take our Channel Partner Relationship Assessment! You can participate here until Dec. 2nd, when we’ll start analyzing results.  Responses are confidential, and all participants will receive an Executive Summary deck of our findings.

Given the current MLC research project on channel partner management, my recent readings and writings have focused mainly on this subject – this week is no exception.  Part of our project is a compilation of partner program webpages (i.e., a page on the supplier’s website about their channel partner program) that have particularly smart components.  Here, I’ve included three quick examples from the technology space.

CISCO Channel Partner Program

Why It’s Smart: It is designed with a clear marketing eye that treats the channel partner as a customer of sorts.

Cisco’s webpage immediately draws your eye to its “award-winning” status, luring you in to read more.  The benefits of joining are spelled out in business value terms, not specific items – this is more effective since most suppliers offer similar resources as incentives.  In the sidebar on the right hand side, there are numerous ways for channel partners to contact or seek help from Cisco, further demonstrating their commitment to the partner’s business success.

Zebra Technologies’ PartnersFirst Partner Program

Why It’s Smart: It considers both partners and their partners’ customers.

Throughout the page, almost every opportunity to become a partner is juxtaposed with an opportunity to find a partner from whom to buy.  If you click to find a reseller, you are prompted for your contact information and specific product needs.  This is great lead-filtering mechanism, particularly because the end customer has unknowingly self-selected for geography and product line, saving the reseller significant time and effort.  That information could then be used to help (or incentivize) their existing partners expand their businesses.

HP Blue Carpet Program

Why It’s Smart: The included video features snapshots of the partner portal – something most potential partners don’t get access to without a cumbersome sales conversation.

Of course, the screenshots wouldn’t be so enticing if the portal itself wasn’t well designed, but HP has done quite well.  The partner portal pages have been designed with the partner’s main desire in mind — that is, ease of doing business (more in this subject in a previous blog post).  A partner can find information, complete training, enter sales information, redeem claims/rewards… And best of all, very quickly and easily!

Does your company have a smart channel partner program webpage as well? Do you have thoughts on how to build a smart channel partner program? We’d love to hear from you! And don’t forget to take our Channel Partner Relationship Assessment – it closes soon!

Marketers talk a lot about the need to be data-driven. “We should make decisions based on objective facts,” they say. “We need to measure what we do and throw out the things that don’t make sense.”

We agree wholeheartedly. And now, it’s time to put that rhetoric to the test: it’s time to stop expecting sales from social media.

The evidence on social’s direct effect on sales is unambiguous; in fact, an effect barely exists at all. Take a look at this IBM report on Black Friday e-commerce. On a day when you’d expect social sharing to drive an even bigger-than-normal share of referrals – “Hey! Check out this great deal I got!” – and despite serious online retailer incentives to share one’s activity on social networks, social media platforms referred .37% of all Black Friday online sales (yes, that’s a decimal point before the 3). What’s more, Twitter literally referred zero e-commerce sales last Friday. That’s right, zero. Another report from a few months back correlates strongly with this one.

Despite (or, perhaps, because of) years spent in the social agency world, I am a social skeptic. But even I’m shocked by these numbers. Zero referrals from Twitter? .37% of all sales derived from social networks? Paired with projections that social ad revenue is set to double by 2016, the data paints a very unattractive picture: one of brands wasting serious money on a tactic that very clearly does not work.

Does this mean that social media is useless? Of course not. There’s a ton of evidence that social media can be a powerful driver of real-life actions in certain circumstances; social proof can push people to vote, for instance, and it can help drive people to try new products and services. It can mobilize activists and speed up internalization of new ways of looking at the world, as it seems to have in the course of the Arab Spring. We’ve extensively discussed the ways that social can displace other costs throughout your organization by more efficient scaling, costs like call centers and paid advertising.

So we’ve established that a) social media is not a notable driver of sales, at least not directly and b) social media has value in shaping customer behavior and displacing costs from elsewhere within the organization. What can brands realistically expect from social, then? Well, we don’t have a full list. But here are a few ideas:

Decreased advertising spend. To some extent, a vigorous social program should displace some degree of advertising spend; whether it’s a little or a lot depends on your product and your approach.

Decreased customer support costs. Scaling customer contact via Twitter is a lot easier than it is over the phone. That’s why brands that offer customer support online should see some corresponding savings in more traditional support channels like phone and e-mail; wide broadcasting of Twitter messages can preempt many support calls before they even happen.

Some degree of behavior change among existing customers. I’m skeptical of social’s ability to win new customers for existing products; I haven’t seen much evidence that social media is capable of shifting concrete preferences. (No Republican becomes a Democrat because of a social media message; no Coke drinker tries Pepsi because their friends drink it.) But existing customers should be influenced to some degree by social messaging.

Faster new product adoption. Social seems to shape behavior best in times of ambiguity – so, in the context of the Arab Spring, an individual’s decision to support the Mubarak regime (or not) in the midst of popular protests is influentiable by social proof. An analogous situation is new product launch: there’s ambiguity in the marketplace (I had preference X, but Y is now available, what do I do?) and messages in support of Y are likely to drive trial and ultimately purchase. Social ratchets up the speed and the magnitude at which this happens.

Now that we know social doesn’t directly drive sales, what else should we be measuring to determine its impact? Let us know what you think.

Chances are, if you spend any time on the internet at all, you’re sick of hearing about this already. But spare us a few minutes for one more article on the events of November 16, 2012: also known as the day the Twinkies died.

You’ve probably already heard the circumstances, but to sum it up, Hostess Brands, which manufactures the cream-filled shortcakes, announced its liquidation at the end of last week. Millions of Americans – particularly ones d’un certain âge – commenced an unparalleled wailing and gnashing of teeth. Twitter and Facebook lit up with memories of simpler times gone by, when kids could eat unhealthy things in peace. In a sign of the strange times we live in, the shuttering of this once-robust snack cake brand was even forced into the narrative of partisan politics, with Democrats blaming venture capitalists for Hostess’ demise, and Republicans blaming traditionally-Democratic unions. (The spectacle of Twitterers sarcastically thanking President Obama and his wife Michelle, a child nutrition advocate, for the loss of their favorite snack brand might take the proverbial cake).

But the fact that there have been even crazier reactions to the Twinkies story doesn’t excuse some of the reactions from the marketing punditosphere, which have been, well, trying. A good case in point is the reaction from Timothy Halloran at HBR, who says that the sudden unavailability of the snack cakes proved that many still had a “relationship with the brand”, expressed by the fact that it “made [them] make a run on local grocery stores to grab one of the last remaining boxes” – and that this proves that “Twinkies didn’t keep up with consumer trends and consumer needs, and as a result, over time, lost relevance.”

For the uninitiated and for those that need a reminder, let me fill you in (ha!) on what a Twinkie is: it’s a shortcake filled with whipped cream. Really, that’s it (well, that and a lot of unpronounceable stuff) Every Twinkie contains 5 teaspoons of sugar; dietitians recommend that people limit their sugar intake to 6-9 teaspoons per day. A single Twinkie contains 2.5 grams of saturated fat, 13% of daily recommended intake. I cite these facts not to be a scold – I love disgustingly unhealthy food – but to point out the obvious: to fit into an America that increasingly takes diet and health seriously, Twinkies would’ve had to cease to be Twinkies. The entire model is one of mass-producing things that Americans increasingly no longer want to eat in mass quantities.

This is where the usefulness of concepts like “brand relationship” and “brand connection” end. No brand relationship can possibly withstand a seismic shift in the way people eat; no brand connection can match up to the opprobrium of one’s neighbors for feeding large amounts of disgusting food to one’s children. Hostess could’ve invested in the best analytics platform in the world and it wouldn’t have helped them: in order to “keep up with consumer trends”, they would’ve had to start making other things. No one faults the makers of, say, Chia Pets for not staying relevant to consumers; we realize that there’s only so much you can do with a little sculpture that you can grow grass on top of, and sometimes things just go out of style.

And maybe, that’s the lesson here. There are limits to branding and limits to marketing; sometimes stuff just goes out of style, and there isn’t much you can do about it. All the more reason to focus on profitability while you can.

What is the essence of a commercial interaction? You know, the stuff we call sales pitches, marketing communications, branding, and the like. Here’s what we’d suggest: fundamentally, every commercial interaction is an attempt to move customers from a current behavior to a desired future behavior.

Right? Isn’t that really what we’re trying to do when we sell and market? Customers are doing A; we want them to do B. A could be any number of things, B is usually “buy our stuff”. But as they attempt to change customer behavior, Marketing and Sales teams fail to understand just how entrenched customer behavior is.

Customer behavior is based on a set of deeply-held beliefs and assumptions about how that particular customer’s world works. For instance, as in the example I gave a few weeks back, a pizzeria owner might have a deeply-held belief that his customers care primarily about sustainability. They want organic, local, sustainably-made pizzas. And so every decision that restaurant owner makes about the food she buys is filtered through the lens of that understanding – and if you’re a restaurant supplier that doesn’t cross her bar of sustainability, you can message about everything else under the sun and not move one step forward with this pizzeria owner. If all they care about in a food supplier is sustainability, what motivation does she have to choose you over your competitor?

The pizzeria owner’s belief – that sustainability = happier customers = profits – is what we’d call a mental model. It’s how the customer systematically thinks about how their own businesses work. Here’s the thing about mental models: if they’re working against you – as in the pizzeria example above – you must break and re-shape them in order to make headway. And before you can break them, you have to understand them.

In the course of this year’s B2B research, the MLC team put together a toolkit for mapping out a customer’s mental model. This tool will help you begin to understand your customers’ deeply held beliefs about their business world and give you the first steps towards breaking those deeply held beliefs.

Carving out a place as a relevant, consumer-centric brand is harder now than it’s ever been.  Not only is there more competition for consumers’ wallets, there’s more competition for their attention.  There are a lot of statistics out there about everything from how many advertisements the average consumer sees in a day to how many screens they interact with – and most of these numbers seem to be on the rise.  The journey to purchase may well involve a winding path through traditional advertising, social media, web research, mobile apps, videos, person-to-person recommendations, and in-store visits.  It’s not enough for brands to be present in just one or two of these places.  They have to be everywhere and somehow stitch together a seamless experience for the consumer across all channels.  Or at least, that’s what conventional wisdom tells us.

But here at CEB’s Marketing Leadership Council, we’re not totally convinced this is the way to go.  Our past research on how consumers make decisions suggests there might be a simpler way.  So we are kicking off our big 2013 B2C research initiative with those questions in mind.  Specifically, what do consumers really expect when it comes to experiencing a brand across channels?  What do they reward and what do they punish?  How should brands set their omni-channel strategy to ensure they are delivering what consumers truly want (in a way that is a bit more precise than just “be everywhere”)?

Some initial reading and conversations on the topic has led us to a few early thoughts.  Marketing communications is a big part of omni-channel.  Consumers have so many places to go to research products and services and compare the various offerings.  The influence of word-of-mouth continues to grow and the very definition of word-of-mouth is expanding to include everything from Facebook and Twitter to YouTube and Pinterest.  As brands are trying to carve out their place in consumers’ minds and hearts, it is increasingly important to consider all the various ways someone might interact with you and have some macro-vision of how all those pieces might fit together.  Brands are making strides to synch up their TV, web, social, mobile, and in-store presence to tell a consistent story.

eCommerce is another important part of the omni-channel puzzle.  A lot of marketers seem to have gotten sucked into the quicksand of trying out-Amazon Amazon or out-Zappos Zappos.  Quite frankly, that’s unlikely to be a winning strategy.  But some brands are making meaningful progress in other areas, with retailers leading the pack.  Many are starting to synch up the back-offices of their websites and bricks-and-mortar stores and “Site-to-Store” (where you order something online and then go pick it up at your local store) is increasingly common.  A few retailers have even taken tech-enabled strides to combat “show-rooming” (where consumers come to a store to see a product, but then end up ordering it online from a cheaper seller – sometimes using their smart phones while still physically in the store).  And eCommerce isn’t limited to retailers as the web is starting to make it possible for even the simplest, lowest price consumer goods to be sold straight to consumers.

What else are we missing?  Where might some of the conventional thinking about omni-channel be wrong?  How are you thinking about these challenges?  What are some changes your organization is making to meet consumers’ omni-channel expectations?  Share your ideas in the comments below and email me – we’d love to set up a time to chat more about the topic and how the MLC can help.

B2B companies have lost their near-monopoly on educating their customers, as customers are waiting until they are – on average - 57% of the way through their buying processes before seriously engaging with Sales.  But because customers are still running lean from the recession and many cannot dedicate as many resources to research and new product development, there is a window of opportunity to teach the customer about their own businesses.

Solae, a leading soy-based technology and ingredient company, capitalizes on this opportunity by developing and presenting contextualized commercial insights for their key accounts.

They do this by:

1. Dedicating a Specialized Marketer to Insight Generation and Delivery
2. Synthesizing multiple sources of customer information

MLC members, read more about how Solae generates and delivers insights to its key accounts.

We’ve said before that disrupting customers’ learning with insight  is the key to changing their purchase process.  Disrupting customers with information about how your product can fix a problem they either didn’t realize or just thought was a “cost of doing business” helps drive preference.

But coming up with the commercial insight that allows for disrupting the customers is really hard.  We looked at hundreds of possible drivers of commercial insight ability, and we found that five things matter:

• Marketer skills
• Approach to work
• Marketer background
• Team dynamics
• Incentives

MLC members, learn more about what sets apart marketers who are strong at developing commercial insight.