To justify marketing’s elevated role in the business, marketing leaders must be able to link specific activities to revenue. But a transactional view of return on investment (ROI) simply doesn’t fit the complex, often lengthy B2B technology purchase process—which is to say: B2B marketing and revenue analytics is more than just putting together a quick report.
You need to develop a holistic approach to quantifying marketing’s impact at each stage of the revenue cycle. It includes the adoption of practices for managing revenue performance and the creation of a methodology for tracking that data. And to do it requires defining the stages of the buying process in close coordination with your sales team and then selecting the metrics that will yield the clearest insight into a return on marketing investment (ROMI). It also involves making sure that you are set up to view data in a way that is not only actionable but predictive.
Metrics that matter
Fortunately, with improved lead management capabilities and analytics tools, marketers are better equipped to quantify success, including the number of people at each buying stage, conversion rates and trends, lead-to-revenue velocity, and total pipeline value. These are the metrics that marketing automation leader Marketo says marketing must be able to track and report on to accurately communicate ROMI.
At Yesler, we call these the 4 Vs:
- Volume: Aggregate number of leads generated
- ConVersion: Number of leads at each stage of the buying cycle
- Velocity: Lead-to-revenue velocity
- Value: Percentage of sales revenue directly attributable to marketing efforts
The Future of marketing measurement is predictive
But measurement doesn’t end there. Predicting revenue is integral to the expanded role of marketing in today’s organizations. You must move beyond tracking which campaigns and channels have performed well in the past to forecasting future sales. The most important question that marketers will need to be able to answer is: “What if?” And the only way you can answer this question in a reliable way is to apply a framework for measuring performance at every stage of the revenue cycle.
The challenge is clear. So is the payoff. By detailing the depth of marketing’s impact on present and future pipeline and revenue, you’ll secure credibility that lasts and ensure that marketing gets the right size investment year over year.
Start with data, of course. The data you need is historical about how your leads and opportunities have moved through the funnel.
Typically, history data (like, “What status was this lead or opportunity in 10 days ago?”), which is required for both conversion and velocity metrics, isn’t accessible by default within your CRM, so you are going to have to come up with a workaround or consider another tool to close the gaps.
Salesforce.com and other CRMs offer the ability to create a funnel view of your lead or opportunity statuses, and using your marketing automation platform or workflows within your CRM to collect data like “entry date” into a particular status and “exit date” into a discrete field can be a low-cost option for gathering the information you need about velocity and conversion.
At some point, however, you’ll hit a wall using workflows to get the data you need. They’ll fail, your admin won’t want to add those new fields, or your pivots will be too limited. When that’s the case, it’s worth looking at platforms that give visibility into revenue performance and revenue analytics. Technologies in this class include BrightFunnel, InsightSquared and Yesler partner FunnelWise.
These platforms offer flexibility and pre-built report types that can shortcut the process, but of course that functionality comes with a price.
Getting to predictive
Revenue performance management is a process that matures. In the early stages of measurement, you will simply try to ensure that the data presented on your dashboard truly reflects what your sales and marketing teams are doing. When you get that worked out, you have a working vision of your funnel.
Then, you’ll set goals against that data and start measuring against them, setting up alerts for when up-funnel goals that drive down-funnel goals aren’t being met.
Finally, once your goals are established and your team is humming along, responding proactively to alerts, you will evaluate data from the last six, nine, or 12 months to see where your best performing leads are coming from and how quickly they are turning into revenue. You can work backward to determine exactly how many leads you need to produce toward your next revenue goal.
And then you can say that your future revenue growth is right over here, and have both the data to prove it and know the number of leads you need to secure it.
Having trouble seeing your funnel, much less tying lead generation to revenue? We can help with that. Get in touch to find out about a revenue analytics audit.