New data reveals that many B2B marketers are committing a major marketing no-no by failing to measure and report return on marketing investments to senior executives. According to a recent B2B marketing survey conducted by Sagefrog Marketing Group:
- Only 1 in 3 B2B marketers worldwide report financial-contribution metrics to senior management. Though one third track revenue metrics (associated with marketing-generated opportunities, closed deals, and percentage of total sales), they fail to communicate their findings to upper management.
- 58% are reporting on marketing performance metrics like leads, and 48% are reporting opportunities generated. However, they don't report metrics that reflect bottom-of-funnel activity, like leads to closed sales, which is what really matters in the eyes of upper management.
- 33% of marketers do not measure marketing ROI at all.
So what does this tell us? A third of B2B marketers don't measure their ROI at all, and when they do, they aren't reporting their findings to their bosses. It's no wonder marketers fail so often to get a seat at the boardroom table and the budgets allocated to marketing are so tight, especially for small to medium sized companies. It helps explain why 68% of U.S. B2B companies allocate 5% or less of company revenue on marketing.
ROI Measurement Best Practices
- Pick the right things to measure. Pick what the key influencers in the business care about. The senior management team care about revenues, return on capital employed (ROCE or ROI), margins and of course ultimately, profits. As happy customers are profitable customers, customer service and satisfaction metrics are also up there. So for B2B marketers this must include measuring the funnel every step of the way. For example, how many site visitors convert into interested leads, how many convert into sales-ready leads and how many of those become customers and what revenue did they earn? Setting and then measuring your funnel maths is a must-do. B2B Marketers must be able to measure which tactics are most effective in aiding conversions. For example, at the top of the funnel, what sources of traffic are most valuable? At g2m Solutions we know that leads that come from LinkedIn are twice as effective as email marketing in generating leads and 5 times more effective than leads from organic search. Clearly this knowledge assists us in allocating our precious resources to get the most bang for our buck.
- Get the right measurement tools. If you don't already have an integrated analytics tool or find your current tool unsatisfactory, have a look around and test your options thoroughly before settling on the right one. Remember that this is something that is integral to the running and shaping of your business, so take time to be certain that you're making the right choice. Be very careful to select tools that integrate easily with one another, or preferably an all-in-one tool like Hubspot. Data can take many hours to export and collate into any meaningful analysis.
- Build reports into your processes. It's not enough to simply report on a month-to-month basis. Reporting must be part of a genuine commitment to change what you do so that your recommendations lead to real changes and innovation. Remember to make sure reports are written in the language of senior management as they are the people you seek to influence.
Robust ROI measurement and reporting is one of the core components of inbound marketing success. To learn more about inbound marketing, please download our complimentary whitepaper:
How do you measure and report ROI to senior executives? Do you agree that it's an important part in business strategy? Let us know in the comment section below.