–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.