Following my blog article at the end of 2012 covering How to create a winning marketing strategy for 2013 I thought it only right to begin 2013 with a look at measuring return on investment (ROI), so you can demonstrate your worth to the business and gain recognition for your successes.
The importance of measuring – remember why you are doing it
Research released at the end of last year indicated that 70% of CEOs have lost trust in marketers. The research, conducted by the Fournaise Marketing Group, also reported that 69% of CEOs have stopped enforcing key business objectives on marketers as they “continuously failed” to prove marketing strategies and campaigns delivered business growth. This is a reminder that in these austere times it is critical to always show your value, and be able to attribute your work to the success of the business.
Evaluating your ROI – what to measure?
Measuring ROI does not need to be highly sophisticated. There are many measures that can be tracked at different stages of the sales & marketing funnel:At the top of the funnel is the number of contacts you communicate with via email, social media, blog etc.; Next in the funnel are leads generated, a staple marketing metric; Finally conversion to sales and the revenue generated by marketing gives a clear indication of the impact on business growth.
In our recent survey called Marketing Activity & Spend we asked participants to indicate how they measure ROI. The survey demonstrated that ROI measurements for 2013 will focus on enquiries received, sales growth and new prospects. Web traffic remains constant as an important ROI to measure, whereas downloads are seen as less important than previously.
Research by the Fournaise Group reports that 85% of B2B CEOs would like prospect-driven ROI Marketers to focus on tracking, reporting and boosting four Key Marketing Performance Indicators:
- Prospect Volume
- Prospect Quality Rate
- Marketing Effectiveness Rate (defined as the percentage of Marketing spending that directly generated prospects)
- Business potential generated by Marketing
Whatever you choose to measure, consider measuring metrics at each stage of the sales & marketing funnel, making both marketing and sales accountable. Research by the Aberdeen Group demonstrates that alignment between sales and marketing teams can improve business, with the research reporting a 20% annual revenue growth in 2010 for those that aligned their sales and marketing teams. By contrast, companies with poor alignment saw revenues decline by 4%. This is also supported by the Fournaise Group sighting that92% of prospects not closed in 2011 mainly because of marketing & sales misalignment.
Learn to love your metrics – but don’t become a slave to them
It is not enough just to collect data, you also need to effectively analyse it and draw insights from it. According to a CMO Survey 65% of companies fail to leverage marketing analytics in their marketing projects and further research shows 70% are concerned about making sense of all the data thrown at them.
Having an interest in the story that numbers can tell is important. If you are looking for inspiration, then take a look at Hans Grosling, who recently presented The Joy of Stats on BBC 4, here at Competitive Advantage we have become fans.
When it comes to marketing, analysing the metrics and interpreting them is, at the very least a useful exercise to prompt insightful questions, and best practice for monitoring progress against strategic goals. But a word of warning, don’t become a slave to stats. A marketing team informed by data can make insightful decisions, but avoid an over emphasis on metrics as this can stifle creativity and create an inward looking team that is not responsive to changing market conditions.
The numbers you collect should be interpreted and used to inform your marketing decisions, to monitor progress against goals and importantly demonstrate ROI and your contribution to business growth. But also remember to leave space for creativity.
Marketers need to report on demand-related indicators, such as lead generation, rather than performance metrics. And these goals and metrics should be shared by marketing and sales alike, to have the best chance of impacting on annual revenue growth.
Remember also to monitor market activity and be in a position to react, if need be, to changes in the marketplace.
Competitive Advantage Consultancy
If you would like help with tailored forecasting and research, or indeed in developing and implementing a winning strategy for 2013 then please contact us for a no-obligation proposal.
Competitive Advantage specialises in providing marketing and sales services for the construction sector. We aim to provide high quality information at an affordable cost.