Over 100 years ago, department store mogul and marketing pioneer John Wanamaker said, “half the money I spend on advertising is wasted; the trouble is I don’t know which half.” I think B2B marketers can all agree that statement is troubling, but with more and more data have things gotten any better?
One thing is true, it’s significantly easier today to identify which half of the money is wasted. That’s the good news. The more concerning part is that we continue to waste a significant amount of our marketing spend.
Now that percentage varies widely with some B2B marketers claiming figures as low as 25% but others assume it is 80+% according to a survey. But instead of debating the percentage, I want to explore why we continue to waste so much of the marketing spend.
The importance of a clear goal
I recently wrote about how doing less can lead to a better marketing strategy but you need to ensure you are doing the right things to get better results. Setting a clear goal and using data to see which tactics are working and which are not is critical.
But it’s not just about setting a clear goal as you also need to identify the metric you will use to measure your success. It’s too easy to look at multiple different metrics until you find the one that proves something is working.
That’s the slippery slope here. If B2B marketers measure too many things then you can always justify your program, content format, channel or other activity. And, then how do you focus on quality versus quantity and do the things that deliver the best ROI.
Not to mention the fact that if you are measuring everything you can easily get paralyzed by the data and either spend all your time collecting it or analyzing it without making any changes to your marketing plan based on it. This is a real trap I’ve seen many fall into.
How do B2B marketers set one clear goal
I argued a few years ago on this blog, that revenue was the more important marketing metric. My thinking has not changed since then for a number of reasons but first and foremost is if both marketing and sales are being measured on the same goal then they have a vested interest to work together and that is crucial.
But depending on your business, it can take some time and effort to measure marketing’s contribution to revenue. There are many reasons for this including sales cycle, tools, relationships between marketing and sales, etc.
That’s why B2B marketers also need to identify interim metrics that clearly lead to revenue but that marketing can more directly and easily measure, such as the marketing qualified leads (MQLs) or demo requests or engagements that accelerate the pipeline.
By tying every marketing activity back to revenue in some fashion, you can judge all the tactics more equally in terms of what they are contributing to the top line. Then, you can see which ones are delivering better results, which ones are more cost-effective compared to others, or even see if you should be trying something different altogether.
What are the metrics to measure
So what are some of the better interim metrics to measure? As is the case in many of these discussions, the answer is it depends but one of the first things I would do is to map the buyers journey and identify key touch points, which you can measure, that lead to revenue.
One example could be demo requests. If a demo is required as part of any sales cycle and demo requests are captured on your website, then this would be an easy metric to measure and with a little bit of extra work connect this to sales opportunities and ultimately revenue. You might also gain valuable insights if you can see the path that led the prospect to the demo request.
And while, many marketers are moving away from gated assets and capturing lead info on their website, it can still be a very effective metric to measure. It gives you very valuable first party data and if your martech stack is properly integrated, there is an easy way to track and measure these metrics, while also connecting it to revenue.
Maybe more important than the measures I recommend here, are the ones I recommend you avoid: impressions, CTR, open rate and other similar vanity metrics are frankly too far removed from revenue to really help you. If someone sees you ad, does that lead to revenue? It might but you are never going to connect the dots. Even if they click on the ad and arrive on your website, does that lead to revenue? Not if they bounce immediately. I could keep going but the focus on these type of measurements is what I would avoid.
So rather than selecting these vanity metrics, what if you, at a minimum measured the first touch point that mattered. It’s not if they saw your ad or clicked on it. It’s if they read the entire web page or watched the video to the end or downloaded the document. That’s the first touchpoint that matters and why I’m a big fan of measuring web engagements in addition to form fills, whether that is a lead or a demo request.
Quality versus quantity
I would also avoid goals and metrics that focus on quantity. Depending on your business, especially if your average sale is a decent amount or your cost of sale is high, you don’t want to focus on quantity but instead the quality interactions.
The number of clicks and impressions or even the number of leads is not what matters. If we are tying it all back to revenue, then it is the engagements from your target accounts that lead to a sale which matter. You don’t want to juice the results if there is no hope you will ever sell anything to them. That’s why you want to deliver quality engagements or leads or demo requests.
Is data not important for B2B marketers?
When I started to write this post, my biggest fear was that someone would read the title and decide they shouldn’t measure things or data was a luxury that most don’t have time for. That couldn’t be further from the truth.
We don’t want to go back 100 years to the time of Wanamaker and not know what part of our marketing spend is working or not. We want to use the data to make decisions and constantly optimize our programs. But too much data can do more harm than good.
It can paralyze decision making if it takes too long to collect or analyze. It can lead you to the wrong conclusion if you are not looking at it through a common goal and it can also be used to make the program look better than it actually did but not deliver the results that matter.
It is imperative that you use data or you will never improve your marketing BUT don’t get blinded by it. Make sure you are measuring fewer things and identify the ones that will give you the best insights or perspectives.