← Part 1 Marketing ROI (ROMI) Dashboard.
With the increasing impact by marketing and improving technology to follow and measure marketing activities grows the eagerness to fully understand marketing's impact. But just to what extend can marketing be credited for a bottom line number?
For some campaigns and marketing activities it should be fairly easy to close the loop.
When market intelligence managers identify leads via a well designed prospecting, targeting process for example. After sifting through databases and systems they hand off leads to Business Development to further qualify them, the leads are eventually converted into revenue by Sales with all necessary numbers and reporting transparency in place.
Or when agencies or dealers consume certain marketing deliverables (with a cost attached) and come back with closed sales minus their commission or margin.
These sales can be attributed pretty much directly to the marketing efforts and their cost. Whereas other marketing tasks might be just one influential factor in a customers buying decision.
For instance a customer might have seen an ad in a technical magazine, responded to an email campaign and discussed with the sales representatives before a buying decision was formed. There is certainly no scientific way to attribute a waterproof percentage number to the marketing influence to this buying decision.
But how accurate do you have to be and how much effort should be spent to at least have a solid idea about the impact marketing exercises in the sales process?
Keeping a close eye on the customer via lost bid analysis, customer satisfaction surveys, customer relationship programs like Net Promoter Score with the built-in customer dialogue and the regular engagement via Sales activities, should provide ample opportunity to feel the pulse and come back with a rough understanding whether a certain customer attributes his buying decision primarily to the marketing activity or the direct sales process.
Why not agreeing with sales - at least for these types of mixed buying influences - on a attribution factor like: 50%? So, in the example above the customers decision to finally sign the contract goes back to 50% of convincing done by marketing measures. Or 10% for email campaigns as there is much more convincing required by technical sales before the sales is closed?
This is not to say that this would work across the entire marketing services portfolio nor does it have to.
Especially for activities that are really impossible to attribute to a direct commercially viable outcome or that doesn’t target the sales process at all like competitive intelligence reports that are used in the strategic planning process.
At the end of the day there will be plenty of measures available. Some rather hard, some softer in nature. But it all boils down to the eagerness and drive to use the sales funnel for transparency and performance improvements.
CEO Bob will understand that certain measures amount to a good guess based on customer dialogue and he will be happy that his commercial people have found another reason to show customers how much they care about their relationship.
Show me the money
The KPI dashboard presented in this article includes some of the mentioned “harder” measurements like ‘Prospecting’ and some softer ones like ‘Print’. Assuming that Sales questions customers once a year as to how much they feel to be influenced by emails, online content or printed technical documents, marketing can stand with confidence behind the cost per lead and conversion ratio calculations.
Notice the Sales rows ‘directly attributed’ versus ‘indirect attributed’. Not only does this include the agreed upon marketing impact ratio. It is also a good way to join-up with Sales and demonstrate a team spirit reported in an otherwise flat spreadsheet that might be disputed across departments.
Hence, establishing this kind of reporting sports the teams. What does too is the ROMI calculation based on the real bottom line. Sales understand that their negotiation power and success to keep margins healthy also has an impact on the reported marketing performance.
When a marketing department establishes this kind of visibility for itself and to management it will be able to easily argue about adjustments and investments in the various programs and campaigns.
And like in this example, a certain amount of “unproductive” cost (T&E, admin) can be controlled and adjusted to the need for improvements (Education and development costs).