New Foundations of B2B Marketing ROI in 2021
- Understand and Measure Marketing Influence
- Measure ROI based on Total Marketing Spend
- Pay Attention to Total Contract Value
- Sales Team Alignment is An Imperative
Most business leaders know marketing is necessary, but not how marketing should be done – or how much it should cost.
The truth is, tracking marketing efforts doesn’t mean you understand them. Case in point, too many businesses dwell on vanity metrics (e.g., open rate, page views, form conversions) that indicate marketing activity is happening but don’t relate it to a tangible goal.
Organizations should measure marketing ROI against a plan that demonstrates what marketing activities will achieve and what measurable business goals they will deliver.
Once your organization has outlined measurable business goals that marketing will attempt to affect, there are four foundational concepts to measuring marketing ROI.
New Foundations of B2B Marketing ROI in 2021
1. Understand and Measure Marketing Influence
The occurrence of prospects virtually raising their hand to speak to a salesperson is dwindling. Mature marketing organizations have shifted significant resources to content marketing, which help prospects and clients “get smart” on solving their business challenges.
As prospects and clients become smarter from your company’s marketing investments, salespeople become more successful in accessing companies and individuals independently.
Marketing Influence is the term used to attribute proposed and won revenue to marketing campaigns that may have contributed to the proposal, even though the prospect did not formally “raise their hand” to speak to a salesperson.
2. Measure ROI based on Total Marketing Spend
Marketing leaders should measure the ROI of marketing campaigns, and business leaders should measure ROI based on the total marketing program and headcount spend.
An annual ROI trend is more important than the results of a particular year. Remember that as the marketing organization invests in content marketing, the better your target audience knows your company and solutions. To that end, you would expect that marketing impact would increase.
You’ll see increased inbound and outbound client and prospect engagement and results over time, provided that the company’s marketing investments have been consistent.
3. Pay Attention to Total Contract Value
For organizations with portions of their business as long-term contracts, Total Contract Value (TCV) is a better measure of results than annual revenue. Think of it this way, most organizations pay salespeople based on the TCV, so the business should measure marketing ROI the same way.
4. Sales Team Alignment Is An Imperative
Active sales team involvement is essential to measure and prove marketing ROI. Marketing automation and CRM systems capture engagement activity, Leads, and Opportunities.
However, modern marketing organizations recognize that sales teams need to understand the nuances of how marketing results are measured.
For example, organizations that use Salesforce CRM rely primarily on the Opportunity Contact Roles section to identify customer contacts involved in the Opportunity. If salespeople elect not to associate contacts to the Opportunity, then the marketing will not attribute marketing influence to the Opportunity.
Marketers and business leaders need to look beyond activity metrics and the number of leads generated to determine meaningful marketing ROI.
Organizations can only improve marketing impact by knowing what contributed (or not) to the business’ goals over time.
If you measure the wrong things or a portion of marketing’s contribution, business leaders will continue to be frustrated with the marketing function.