October 10, 2020 | Written by Joseph Reynoso, TNI | Published on Tierra Nueva Interactive.
For organizations developing a center of excellence in demand generation, it’s important to remember that demand marketing is a multi-faceted, integrated, and outcome-oriented discipline. Too often, in-house teams struggle to measure desired outcomes and instead focus their attention on measuring activities – the number of impressions, clicks, visits to a website, form conversions, e-book downloads, meetings booked, opportunities created, etc.
At first glance, these efforts may appear super productive and the data from those activities might even be repurposed into a QBR for executives to share with their board, but more often than not, these activities don’t get around to impacting what truly matters which is to drive predictable, repeatable, and scalable revenue for the business.
Not long ago, I sat with the CEO of an enterprise organization in the financial services industry and was not surprised when he shared that his primary concerns weren’t developing a lead management framework or a marketing automation strategy, neither of which were in place. The CEO’s biggest concern was generating enough lead volume for his 4 person sales team to follow on.
With no lead routing definitions, lead qualification process, scoring model, or nurture sequences in place, I knew that any attempt at building meaningful relationships with their customers was going to be over before it had even begun.
“If I gave you $100K on your first day on the job, How are you going to generate all these leads for us?”
Don’t get me wrong, the number of leads generated is an important KPI, but when separated from a holistic strategy, the marketing team nor its leadership would be able to connect the dots between top of the funnel volume and the programs overall ROI. This is an overly simplified example of measuring the activity while failing to tie the output to any meaningful business results.
When executed strategically, we would want to understand the firms annual contract value (ACV), the average length of its sales cycle, the ARR targets for the year, and the % of revenue contribution that marketing owns. We could then assess which were the best performing sources for top of the funnel lead gen. From there, we could uncover which channels were least performing by referencing historic conversion rates from those sources. We’d specifically look at the Opportunity to Closed Won New Business Conversion Rate (CWNB). We then use those conversion rates to reverse engineer some basic funnel math and establish realistic projections necessary to hit the CEO’s targets.
Taking it one step further, we would recommend developing a channel specific media plan which communicates the estimated cost per lead within their budget. This often over-looked detail is about building trust by forecasting projections before a single dollar of marketing investment is spent. This is accomplished by forecasting platform metrics like Impressions, Clicks, CPM, & ad frequency based on addressable audience sizes and the campaigns expected duration.
By entering the pre-requisite job titles and account list criteria into the various ad platforms, we can reverse engineer these projections to help the CEO understand how much Share of Voice (SOV) their marketing investment would garner and precisely how many leads they could expect to generate within their specified budget. These projections are needed to build trust, transparency, and accountability between the marketing team and the executive suite.
So to my fellow marketers, the next time your boss asks you, “How are you going to generate X number of leads for their business”, don’t just jump into activating your best creatives. Invest time, effort, and consideration into developing projections that are both accurate and defensible. The KPI’s that matter most ($$$) should always be presented as the by-product of your demand generation strategy. How many qualified leads resulted from those programs? How many of those qualified leads converted into marketing contributed pipeline and then ultimately into revenue? What are the conversion rates across the various deal stages? What is the time to actualized contract value?
Developing insights from these data points allows organizations to continually refine their strategy and tell a compelling narrative while also optimize the programs performance along the way. These are the kinds of outcomes that should matter to revenue marketers and it should be expected that those who manage demand generation programs clearly report on the value these metrics provide. Leaders want to have a clear pane of glass view into how their investments are impacting pipeline and revenue. It won’t always be an ideal return of $3 to $1 but the results shouldn’t be upside down either. Train yourselves to measure the right demand generation outcomes and provide much needed insights to support your leadership team.