Tying marketing activities to revenue used to be more art than science. It was clear that marketing initiatives drove awareness and demand, but there was no measurable way to track ROI of those activities. Today, data gives us the ability to track how customer interactions with marketing campaigns and assets connect directly to revenue. Marketers can use that intelligence to optimize future campaigns and predict conversions with precision.
Until just a few years ago, most marketing executives were not on the hook for pipeline and revenue. Now, CMOs that speak the language of revenue are in high demand. According to a study of more than 1,200 C-level decision makers, conducted by The Fournaise Marketing Group, 74% of CEOs want marketers to become 100% ROI focused.
If you’re looking to make your marketing organization more data-driven and revenue focused, here are five things you can start doing now.
1. Set sales-qualified leads (SQL) as your top-line metric
The current status quo still has the marketing qualified lead (MQL) as the driving metric of B2B marketing teams. The trouble is that conversion rates from marketing-qualified to sales-qualified leads has been abysmal — less than 20% of the leads marketing sends to sales are accepted as qualified prospects. The problem that marketers are discovering is that a single prospect’s activity and buyer profile is not enough to qualify an account as in-market.
Forward-looking marketers are now changing their north star from MQL to SQL to help them align their work with the language and goals of the sales team, bridge the gap between marketing activity and actual won business and track how campaigns contribute to pipeline and revenue.
The goal of shifting to an SQL model is to align your data and reporting to that of your sales team. Armed with this information as well as your sales team’s average win rates and average deal size, you’ll be able to develop an accurate picture of your revenue contribution.
2. Create (and update) buyer personas
Developing buyer personas is a useful exercise when outlining your marketing campaign, messages and media. When you understand your target buyer profile, you’re better able to tailor your value propositions to address their needs and interests.
Your sales team is a great resource when you’re defining your buyer personas, as they interact with clients every single day. They can help you understand who actually makes the purchase decision, as well as all the influencers you’ll have to win over along the way to get the deal done.
Further, using a tool, like predictive intelligence is a way to keep your buyer profiles updated. The needs of all of your B2B buyers — and the make-up of that buying committee — changes daily. Don’t make the mistake of assuming that whoever looks like a buyer today will be a buyer in 6 months or even a year from now.
3. Know your cost-per-lead (CPL).
If you don’t know how much a lead costs your operation in terms of hours, financial investment and operational and technological overhead, you won’t be able to figure out your ROI for inbound activities. Once you calculate your cost, you’ll also know how much it costs to generate a sale. (Here’s a comprehensive CPL calculator that can help you do the math.)
Once you have your baseline, you’ll be able to see how data-driven campaigns can reduce this number. ROI isn’t solely about revenues; return on your investment is also about efficiency.
4. Align marketing goals with company’s revenue targets
Accountable marketing teams that are measured by their ability to drive pipeline and revenue have an advantage when it comes to budgeting. Knowing your cost-per-lead, customer-acquisition-cost and average deal size will allow you to submit a budget that reflects your company’s marketing-driven revenue targets. Your budget will be based on hard numbers and historic conversion rates.
The benefit of this approach is that if your CEO wants to raise marketing-driven revenue by 20%, you’ll have a clear mandate to request an increase in your budget that mirrors this goal.
5. Monitor and report your metrics
Let technology do the heavy lifting when it comes to reporting, and devote time to making those reports accessible. Tools like CRM, marketing automation and predictive intelligence platforms like 6sense make it possible to track and report marketing influence to closed deals. They can also be set up to ensure that reports are in a place that is easily accessible and viewable for everyone. Your reports should track marketing-driven leads that have been accepted by sales, but also outbound leads that have been influenced and nurtured by your campaigns. Both are examples of your contribution to the company’s bottom line.
If you only do one thing…
If there’s one overarching theme to tracking marketing activities to revenue, it’s close alignment with sales, and industry statistics back this up. MarketingProfs, for example, has reportedly said that alignment leads to 36% higher customer retention rates and 38% higher sales win rates. The key element empowering closer collaboration with sales is access to data and tools that connect marketing activity to sales results.
To learn more about how companies like Cisco and Xactly use data and predictive intelligence to connect marketing efforts to revenue and align their work with sales, check out our webinars on Rolling Out Predictive Intelligence and Finding In-Market Buyers.