By Josh Baez, Marketing Consultant for Heinz Marketing
How do your marketing efforts impact revenue? Are they worth what you spend? These days, many B2B marketers rely too heavily on vanity metrics to justify their efforts, and while these figures might help determine initial performance, their connection to revenue is nearly impossible to make. Opens, clicks, and downloads are all well and good, but when you’re putting thousands and thousands of dollars into a marketing strategy, justifying your spend requires a lot more insight.
Enter Marketing Performance Management (MPM). In a nutshell, MPM helps you more accurately measure marketing’s contributions and influence on revenue, while giving you visibility on customer touchpoints, high-performing channels, budget and ROI, and time to close.
But why is revenue attribution so critical to your success as a business? And just how does an MPM competency add value to your organization? Here are five questions to get you started.
Why does MPM matter?
Marketing Performance Management measures pipeline influence and revenue performance from a historical perspective. The value is knowing what worked in the past to direct the best performance in the future. Implemented correctly, MPM delivers deeper insights on customer acquisition costs, new sales opportunities, and closed-sales than vanity metrics give alone. Without it, marketers are left with assumptions on what has worked, costing you valuable time and widening your ROI gap.
How does MPM differ from a less sophisticated approach to marketing metrics?
MPM measures marketing’s complete influence within a customer journey by looking at factors such as channel exposure, lead to opportunity conversion time, time to close, and acquisition costs. Additionally, by taking into consideration historic performance, MPM can help provide predictive insights for future performance, with an acute focus on budget utilization to ensure you get the highest ROI.
What problems can MPM help solve?
MPM helps marketers identify where revenue comes from, how many channels are utilized, how long a sale takes, and how much money is spent in the process. By illuminating past and current performance, MPM empowers marketers to more reliably plan for the future. Additionally, by identifying what works in driving demand and accelerating sales, modern marketers can also answer questions such as:
- When revenue is generated, do I know how much marketing influenced that deal?
- What campaigns, offers, and channels deliver the best ROI?
- How long does it take for a lead to become an opportunity to close?
- What’s the impact of marketing actions on sales pipeline?
- What are my customer acquisition costs?
- How should I invest my marketing funds in the next 30, 60, and 90 days?
What are some of the biggest obstacles to implementing MPM in an organization?
MPM requires a lot of discipline around data management and reporting. All customer touchpoints must be tracked, budget and actual spend should be accounted for, systems must be set up correctly, and workflows must be followed. Consistency drives a powerful MPM competency – without it, you’re left with a handful of reports instead of a coherent story told by your data.
Why should the C-Suite care about MPM?
As more marketing leaders are being asked how their marketing efforts impact revenue, the need for a marketing performance competency only grows. MPM goes beyond that of simple data reporting to give you a wider picture of your marketing efforts, telling you a fuller story of what’s working, what’s not, and what’s next. With MPM, the C-Suite can more confidently answer key questions such as:
- Is our marketing investment driving the kind of revenue we need next year?
- What is the ROI of my marketing investment? And is it justifiable?
- Am I able to accurately forecast based on the data I have today?
Let’s get back to the question at hand – how does your marketing impact revenue? Having a firm understanding of how your efforts play into the overall business not only validates the work you do, but also justifies more money to be put into those efforts. This knowledge gives you the freedom to do more of what you want to do, while giving confidence to those supporting you that the decisions you make are ones driven by data, not feelings. So, what does your data tell you?
Want to learn more about Marketing Performance Management? Join Brian Hansford and Matt Heinz as they dive deep into how to plan, set-up, implement, and scale an MPM practice for your organization. Register now!