Talk the Talk and Walk the WalkBuilding CMO Credibility with CEO-Worthy Metrics

What Profits Can Be Generated With 10% More Budget?#1 Answer:Dont KnowSource: 2010 Lenskold Group / emedia Lead Generation Marketing ROI StudyTwo-thirds of CMOs in IBMs 2011 study of 1,700 global CMOs think return on marketing investment will be the primary measure of their effectiveness by 2015. Only 48% feel prepared to cope with it.

Believe average tenure of three to four years in which to make their mark

When Metrics Take Away CredibilityVanity MetricsSound good and impress people, but dont measure impact on revenue or profitabilityActivity MetricsMeasure what you do instead of what results and impact you have

When Metrics Take Away CredibilityCost MetricsFrame marketing in terms of cost and spending instead of results and outcomes

Metrics That Give Marketing PowerSpeak the Language of BusinessAggregate impact on company revenue; pipeline performance; predictive forecastsRevenue Cycle and Forecasts

Metrics That Give Marketing PowerSpeak the Language of BusinessIncremental revenue contribution and ROI of individual marketing programsProgram Performance

Revenue Cycle Metrics

NameAwarenessFriendEngagedTargetMarketos Revenue CycleTOFUMOFUOpportunityCustomerLeadSales LeadNurturing DatabaseBOFU

NameAwarenessFriendEngagedTargetTOFUMOFUOpportunityCustomerLeadSales LeadNurturing DatabaseBOFU

NameAwarenessFriendEngagedTargetOpportunityCustomerLeadSales LeadNurturing Database

NameAwarenessFriendEngagedTargetOpportunityCustomerLeadSales LeadNurturing Database

NameAwarenessFriendEngagedTargetOpportunityCustomerLeadSales LeadNurturing Database

NameAwarenessFriendEngagedTargetOpportunityCustomerLeadSales LeadNurturing Database

NameAwarenessFriendEngagedTargetOpportunityCustomerLeadSales LeadNurturing Database

NameAwarenessFriendEngagedTargetOpportunityCustomerLeadSales LeadNurturing Database

NameAwarenessFriendEngagedTargetOpportunityCustomerLeadSales LeadNurturing Database

NameAwarenessFriendEngagedTargetOpportunityCustomerLeadSales LeadNurturing Database

Revenue Cycle ModelerScreenshot: Marketo Revenue Cycle Analytics

Filter/Drill into data, e.g. by Program Type, Business Unit, Geography, etc.Key topic areas:Balance (Reach)FlowConversionVelocityTrends over timeScreenshot: Marketo Revenue Cycle Analytics

Use Metrics to Set & Justify BudgetsNew MQLs Score>10023,00015.3%Inventory of Active MQLs 10.5%20,000New Opps*1,000 6 Month Created Opp Inv.2,000*Opps is bigger than SQLs because includes outbound and partner referralsSDR capacity drivenInbound / Programs120,000(900K DB Total)New Names75%Wins35% win

Marketing ForecastsGet The Definitive Guide to Marketing Metrics & ROIhttp://marketo.com/DG2MM

Program Performance

Accurately Tracking Investment vs Budget

Why Measuring Return is HardMultiple touches. Seven touches needed to convert a cold lead into a saleMultiple influencers. Typical buying committee has 5-21 people

Source: 2013 Lenskold Group 2013 Lead Generation Marketing Effectiveness Study

First Touch

Source: Marketo data, Marketo Revenue Cycle Analytics. Does not include all sources.

Source: Marketo data, Marketo Revenue Cycle Analytics. Does not include all sources.

Source: Marketo data, Marketo Revenue Cycle Analytics. Does not include all sources.

Source: Marketo data, Marketo Revenue Cycle Analytics. Does not include all sources.

Source: Marketo data, Marketo Revenue Cycle Analytics. Does not include all sources.

Source: Marketo data, Marketo Revenue Cycle Analytics. Does not include all sources.

Source: Marketo data, Marketo Revenue Cycle Analytics. Does not include all sources.

Source: Marketo data, Marketo Revenue Cycle Analytics. Does not include all sources.

Multi-Touch

Track All Touches Across PeopleScreenshot: Marketo Revenue Cycle Analytics

Screenshot: Marketo Revenue Cycle AnalyticsTrack All Touches Across People

Example: Multi-Touch AttributionA deal worth $100,000 recently closed. Three people were involved in the deal: Person A attended Seminar A and Trade Show BPerson B attended Trade Show BPerson C was sent Direct Mail C$100,000 Revenue$25,000$25,000$25,000$25,000Seminar A$25,000Tradeshow B$50,000Direct Mail C$25,000

Screenshot: Marketo Revenue Cycle Analytics (demo data)Screenshot: Marketo Revenue Cycle Analytics (actual data)

Source: Marketo Revenue Cycle Analytics, Nov 2013 * Percentage of all programs in channel that achieve MT Ratio > 5% Above Min*89%41%75%57%66%10.473%67%76%

Source: Marketo Revenue Cycle Analytics, Nov 2013 * Percentage of all programs in channel that achieve MT Ratio > 5% Above Min*89%41%75%57%66%10.473%67%76%

Source: Marketo Revenue Cycle Analytics, Nov 2013 * Percentage of all programs in channel that achieve MT Ratio > 5% Above Min*89%41%75%57%66%10.473%67%76%

Test and Control

Example: Test and ControlSource: Lenskold Group

Planning for Testing

Tweetable TakeawaysReporting is less important than DECISIONS that improve ROIFocus on financial metrics that matter to the CFO (profit, cash, revenue)Avoid cost and spend metrics focus on investment and returnMulti-touch attribution gives more insight into the full funnelA trusted marketing forecast is the single most important step to make marketing a revenue driver, not a cost center@jonmiller

To begin, do you know what profits a 10% increase in your marketing budget would generate?

According to the Lenskold Group, the most common answer to this question is I Dont Know.

Forty-four percent of marketers have no idea what a budget increase could do for their companies.

If you fit into this 44%, youll experience difficulty protecting your budget and will likely find yourself asking the question the other way around: What will happen now that my budget has been decreased by 10%?

You cant expect your organization to place value on something youre unable to quantify. But when you do use the right metrics and processes, there is nothing more powerful to help marketing earn its rightful seat at the revenue table.

Thats why the Definitive Guide delivers the strategies and methodologies youll need to measure and improve ROI. So lets dive in.

*To begin, what are the WRONG metrics?

Vanity metricsToo often, marketers rely on feel good measurements to justify their marketing spend. Instead of pursuing metrics that measure business outcomes and improve marketing performance and profitability, they opt for metrics that sound good and impress people. Some common examples include press release impressions, Facebook Likes, and names gathered at tradeshows.

True story 38K twitter followers. Value? 400 people attended Revenue Rockstar. OK better is 400 people attended, X customers, y prospects. Based on this, we expect to create $1.1M ppipeline and influence / accelerate $YY more.

Measuring Activity, not Results = Focusing on quantity, not qualityMarketing activity is easy to see and measure (costs going out the door), but Marketing results are hard to measure. In contrast, Sales activity is hard to measure, but Sales results (revenue coming in) are easy to measure. Is it any wonder, then, that Sales tends to get the credit for revenue, but Marketing is perceived as a cost center?

Results convince finance and senior management that Marketing delivers quantifiable value. Activity metrics are likely to produce questions from the CFO and other financially-oriented executives; they are no defense against efforts to prune your budget in difficult times.

*Cost metricsThe worst kinds of metrics to use are cost metrics because they frame Marketing as cost center. If you only talk about cost and budgets, then no doubt others will associate your activities with cost.

As an example, lets take a marketer who improved cost per lead by $10. Based on these great results, he went to the CEO to ask for budget. Did the marketer get his budget? No. The CEO decided the reduced lead cost meant marketing could deliver the same results with fewer dollars and so she cut the marketing budget and used the extra funds to hire new sales people. What went wrong here? The marketer performed well, but he made the mistake of not connecting his marketing results to bottom-line metrics that mattered to the CEO. By framing his results in terms of costs, he perpetuated the perception that marketing is a cost center. Within this context, its only natural that the CEO would reduce costs and reallocate the extra budget to a revenue generating department such as sales.

****With this change, marketing has the opportunity to seize the day and take a much larger share of revenue since Marketing is responsible for that 70%. Requires Marketing to think as rigorously about their process as Sales typically thinks about their.

Heres Marketos. Let me explain.*With this change, marketing has the opportunity to seize the day and take a much larger share of revenue since Marketing is responsible for that 70%. Requires Marketing to think as rigorously about their process as Sales typically thinks about their.

Heres Marketos. Let me explain.*********ModelNote Success Path and Detours; Inventory and SLAs*Google Analytics for Revenue***Lets talk about measuring what the CXO cares about.. While you may not be doing all this analysis now, you most likely will in their future.[Be sure to focus on this point a lot so you dont lose them.]

ROI: First investment then revenue

Measure ROI to find not just what works, but what works better

Establish goals upfrontMake sure programs are measureableFocus on decisions that improve ROI*Next, lets focus on Investment side of ROI. Notice its investment, not cost. You invest in growth, marketing is a growth driver.

-Then you enter and track your budget plan-as invoices come in from your financial system, you can map them to line items-you can also map your Marketo programs to specific budget categories or line items-you can track planned, forecasted and actual spend, and indicate whether forecasted spend is committed or optional***Explain*We create a ton of content go to marketo.com/resources**Step 1: Important to track all touches*Step 1: Important to track all touches**Different pipeline allocations first / even*Here we see what works for Marketo (over the last 12)

58% of pipeline from Inbound activities*****Many marketers think of marketing ROI as reporting on the outcome of their programs. But the best companies measure ROI to find not just what worked, but what works better. They focus on improving ROI, not just proving ROI.

Planning for marketing ROI involves three main activities:Establish targets and ROI estimates up-front: With ROI goals in place, the CFO will see not just costs going out the door, but also exactly what benefit is expected to come from that cost.

2. Design programs to be measurable: As part of planning, you should answer three questions:- What will you measure?- When will you measure?- How will you measure?By planning this upfront, youll be sure to include the variance necessary to measure relative lift.

3. Focus on the decisions that will improve marketing: Youll deliver the best ROI when you move past backward-looking measurement to forward looking decisions. Your highest-ROI decisions will often flow from strategic questions about offers, messages, target segments and geographies not simply pass/fail assessments of specific programs or tactics.**2006 Marketo, Inc. CONFIDENTIAL