B2B marketers must prove contribution to revenue
Marketing priorities have changed. Today’s B2B marketers must focus on KPIs, says contributor Patricia Hursh. Here are tips and tactics to show how marketing programs contribute positively to the bottom line.
Digital marketing budgets continue to grow, and the expectation for revenue driven by these budgets increases as well. Business-to-business (B2B) marketers should demonstrate a direct impact on the bottom line. Long gone are the days of measuring success solely based on visibility, traffic or conversions.
Here’s an overview of how marketing priorities and success metrics have shifted, along with recommendations on how to clearly demonstrate marketing contribution to sales and revenue.
New metrics for marketing success
Growing pressure for marketing accountability has caused a shift in key performance indicators (KPIs). Until recently, the most common B2B marketing success metric was lead volume. Not anymore. Today, B2B marketers are most concerned with lead quality and pipeline impact.
So, how is B2B marketing success measured? According to the 2018 Demand Generation Benchmark Survey Report, in addition to the number of inquiries/leads generated, marketers must be able to accurately measure and improve:
- Marketing-qualified leads (MQLs) and sales accepted leads (SALs).
- Pipeline leads influenced.
- Target accounts engaged.
This change in performance metrics is certainly driven by the shift away from high-volume, top-of-funnel marketing methods toward very targeted, full-funnel, account-based marketing (ABM) types of programs. “Flipping the funnel” has overhauled not just our marketing approach but also our definition of success.
Marketing KPIs that demonstrate business impact
Most B2B marketers report how their programs drive MQLs and SALs, and this is definitely a great way of demonstrating pipeline impact. That said, I recommend marketers look beyond these two metrics and work to show impact through the entire sales funnel.
Here are three (less commonly used) metrics I recommend you add to your marketing performance dashboard to ensure business leaders understand how you are positively impacting sales and revenue:
- Account penetration.
- Pipeline velocity.
- Deal size.
1. Demonstrate account penetration
Account-based marketing experts know that identifying target accounts is just the first step. Marketers must successfully find and engage the right people at the right companies.
Two metrics that show account penetration are:
- New stakeholders reached in target accounts (additional reach).
- New touch points with existing contacts (additional engagement).
Some of the most effective ways to reach new stakeholders in high-priority accounts are content marketing, ABM campaigns, programmatic media buying, LinkedIn advertising and social media.
Proven methods to drive additional touch points include retargeting/remarketing lists for search ads (RLSA) and lead nurture campaigns.
2. Contribute to pipeline acceleration
In addition to analyzing funnel progression (i.e., conversion rate from one phase to the next), marketers must understand and improve the speed of progression.
What is the average number of days required to move prospects from one stage to the next? Is this progression faster when marketing campaigns are involved?
Here are three ways marketers can accelerate the pipeline:
- Work to improve initial lead quality. Based on feedback from sales, marketers can improve targeting, qualification and conversion. The goal is to deliver stronger MQLs, more qualified leads and prospects who are more aligned with your company’s ideal customer profile.
- Ensure that your marketing strategy is matching prospects’ behavior and needs as they progress through their customer journey. Initial touch points typically involve top-of-funnel marketing methods such as email, search and social campaigns and provide general information. Subsequent touches rely on mid-funnel strategies like retargeting and lead nurture programs and provide more in-depth assets such as case studies and product/service comparisons.
- Work directly with sales to track pipeline velocity. This allows marketers to understand conversion challenges and create programs specifically designed to accelerate slow transition points.
Let’s say that your company is struggling with moving prospects from contact to demo. If marketing is aware of this, they can develop campaigns, messaging, offers and assets to directly address this challenge. You might develop and promote a self-guided tour as a lower-consideration action offered prior to registering for a live demo. Marketers can test this “baby-step” approach and determine if it accelerates the process of moving prospects from contact to demo.
3. Positively influence deal size
Typically, there is an inverse relationship between deal size and velocity, meaning larger deals tend to move more slowly through the pipeline, while smaller deals close more quickly. Can marketing programs influence deal size? I believe they can.
Again, the most obvious opportunity is to improve the quality of MQLs delivered. Engaging with the right prospect, at a right-sized company, in the right industry will lead to bigger, better deals. I encourage marketing and sales to analyze closed deals, determine the average deal size, and then pursue companies that are aligned with this size/profile.
I also think marketers should look beyond the numbers and find “compelling stories” in the data. Can you identify a positive correlation between marketing programs and pipeline velocity or deal size? Your marketing success story might go something like this:
Prospects who attended the ABC Webinar moved through the pipeline 7 percent faster than those we didn’t and ended up with a deal size (contract value) 10 percent higher than average.
Given the scope and depth of the topic of attribution, I’ll leave it for another day and a separate article. But I did want to say attribution will influence how marketing impact is measured. Savvy marketers know there is no silver bullet, no single best way to measure how each channel contributes. This is especially true for B2B companies with long, complex sales cycles.
Here’s a quick tip with respect to attribution: Even though your company will likely select one attribution model as a standard (first touch, last-touch, multitouch, time decay and so on), I recommend marketers go ahead and analyze/compare results using various attribution methods.
This approach will help you better understand customer behavior and may enable you to better communicate the overall impact of your efforts.
Remember, successful B2B digital marketing programs are guided by a few insightful KPIs that demonstrate accountability and illustrate the direct impact on bottom-line business results.
Old-school metrics (like impressions, clicks and conversions) are still very important for optimization purposes, but today’s marketers must focus on KPIs that prove how marketing programs contribute positively to desirable business outcomes such as account penetration, pipeline velocity and deal size.