While I’m not seriously advocating offshoring your marketing, Switzerland has an historic reputation of remaining neutral in international affairs. And when it comes to desirable characteristics for marketing reporting, I’d place neutrality toward the top of the list.

Think about it this way: marketing performance reporting should provide a shared view of what’s really happening. It needs to answer questions like: What can be proven? What can be inferred? What can be learned? What’s going well? What must be changed?

It’s important that marketing’s performance is viewed through an accurate lens. Typically, responsibility for marketing reporting is best held within the marketing operations function; however, we understand that this structure may not currently exist within all organizations. Regardless of whether or not your organization has a strong marketing operations function, here are some principles to follow that will create an environment where effective marketing reporting can be produced:

• Anticipate scrutiny. Marketing reporting should present facts that may highlight the need for hard decisions around programs, investments, functions or people. The information feeding marketing reporting and fueling decisionmaking must withstand scrutiny. This scrutiny can come from within the marketing organization or from outside functions – but it always comes. So, anticipate the stakes and work to remove biases that will compromise the objectivity of the reporting and cause it to crumble under scrutiny. The best solutions begin with acknowledging that biases can undermine the credibility of marketing reporting, and then working to reduce them.
• Watch the power structure. Marketing reporting works best when power structures don’t introduce bias. When those responsible for reporting feel vested in all the hard work being done by their colleagues, they tend to look for measures that paint their efforts in the most favorable light. This can be prevalent within regional groups that generate their own reporting. It can also happen when the reporting function answers to marketing functions like field marketing, digital marketing or social media teams. Since the last thing team members want is having to consistently report that their boss isn’t producing the required results, look to actively reduce reporting situations that encourage biases. One advantage to a centralized marketing operations function reporting into the CMO is that it can often resist these functional biases.
• Avoid cheerleading. Emphasizing accomplishments over insights and glossing over shortcomings isn’t part of the marketing measurement job description. If marketing reporting becomes a cheerleading function, everyone loses. Focus reporting on an agreed-upon collection of facts that represents what truly matters for the business – and put away the pom-poms.
• Build toward a single version of the truth. Regardless of who gathers data, pre-agreed definitions of what’s important to measure help to keep reporting neutral. Work in advance to develop singular definitions of what the accepted truth is composed of, and stick with them. Objectivity is easier to accept when the ground rules have been established and accepted in advance.

In order to be effective, reporting should provide at least one of the following:

• An understanding of what is happening (or what is likely to happen), which can be used to make ongoing adjustments. Think about the information needed to decide what actions to take next.
• An accounting of what has happened, which fairly and fully captures the contributions the functions being evaluated have made toward an outcome.

Simply put, reporting needs to either help you adjust as you move forward or accurately recap what got you to this point.

Most sales reporting – especially sales dashboards – are not designed to help marketing accomplish either of these things. Most frequently, sales dashboards focus on how much business has closed, is near to closing or needs to close in the current reporting period. They show what sales needs to accomplish between now and the end of the quarter. And there’s nothing wrong with that for managing sales. But for marketing, this isn’t enough to drive better decisionmaking.

One of the big mistakes I see marketers make is to just plug into the measurement system sales has in place. Marketers tend to think this approach shows that they’re revenue focused and aligned with sales. But what really happens is that these marketers give up the tools and insight they need to manage their function.

The truth is that sales and marketing are responsible for doing different things to further the organization’s goals. And these different things develop results according to different timelines. Concentrating performance measures solely upon the revenue booked during the current quarter obscures how marketing’s input from prior quarters has affected current outcomes, and how today’s marketing activities will impact results in the future. Without this perspective, it’s impossible for marketers to make the adjustments needed right now.

Alignment isn’t an end in its own right: It is a requirement for achieving greater sales and marketing effectiveness. Aligned functions won’t be effective if marketing lacks visibility into how its actions contribute toward aligned goals – and what to adjust. The recommendations I give to marketers around reporting are as follows:

• Maintain marketing reporting that shows how marketing is contributing toward aligned goals.
• Ensure there are clear connections that allow sales and marketing data to be reconciled so as not to create divergent versions of the truth.
• Use data to educate the organization about how marketing contributes and how marketing results are produced.

Ultimately, alignment works best when everyone has the information they need to do their respective parts. Sales and marketing need to align on business goals, and use reporting to help guide the processes for meeting those goals.

The first customer reported average revenue growth and gross margins. Investment in marketing as a percentage of revenue was lower than average, as was the investment level in sales. The customer indicated a focus on large enterprise accounts and that the majority of revenue came from existing customers, so the sales organization had a noticeable named account structure (accounts are already known).

Our analysis of the first customer’s marketing budget revealed an almost 50/50 split between personnel and programs, with no investment in marketing systems and tools, and only slight investment in outside service providers. The marketing function’s primary focus was to support and enable the named account-based sales organization. We analyzed the marketing budget allocation and determined that the customer should:

• Establish stronger processes and agreements between marketing and sales
• Evaluate systems and tools to improve efficiency
• Emphasize sales enablement, retention and loyalty initiatives
• De-emphasize awareness and demand creation activities

However, we pointed out that if corporate strategy shifted to focus more on acquiring new customers, marketing investment would need to increase to afford the new initiatives required in awareness and demand creation.

A Very Different Picture

The marketing benchmark for the second customer revealed a very different picture, reporting much higher-than-average revenue growth and slightly lower-than-average margins. Investment in marketing and sales was above average. The customer focus was maintaining a healthy mix of revenue from large enterprise and small-to-midsize accounts; the majority of revenue was from new accounts.

Our analysis of the marketing budget revealed a higher percentage allocated to programs, a lower percentage to personnel, and investments in marketing systems and tools as well as outside service providers. The investments in marketing technologies and outside agencies resulted in better leverage of staff; however, marketing struggled with clear reporting metrics and key performance indicators for the full impact of marketing on sales. The marketing function’s goals and tactics allocation appeared to be split between lead creation and sales enablement, unusual for an organization of this size.

We analyzed the marketing budget allocation and determined that the customer needed to emphasize more awareness and demand creation programs to meet sales expectations that marketing would source a high percentage of the pipeline. We advised marketing to communicate with sales that it was more important to focus on improvements in one particular area (e.g. demand creation) and establish best practices and reportable metrics before trying to support lower-in-the funnel sales enablement activities.

Analyzing Benchmark Results

As so often is the case, you get what you pay for. One organization can be content with moderate growth and a marketing function that’s reactive to a strong sales organization, while the other can be designed/funded for much higher growth and a marketing organization that’s empowered to source considerably more than half of the sales pipeline. A cursory analysis might indicate that the two organizations are simply at opposite ends of the same benchmark peer set and that, when combined, they have a balanced impact on the average numbers for organizations of that size. However, the benchmark data and analysis actually reveal much more: These are organizations with different corporate goals and strategies that need to be supported by different levels of marketing/sales investment and budget allocations.

Using Content Auditing to Understand “Whys” of Mix Outcomes

When a tactic fails, a few reasons could be behind it. Segmentation and targeting, timing, context, and a host of other elements combine to determine success. An obvious culprit for tactic failure is the offer. With so many content-based offers used as inbound and outbound interaction encouragement, it’s key to look at the message and offer along with the delivery mechanism to get the most complete understanding of what happened, why and with whom. Content is hard to evaluate, however, because it’s a qualitative assessment, rather than purely data-driven. Three steps can be used to bring greater discipline to the evaluation of content and make it easier to take on as part of improving marketing impact.

Taken together, these three elements provide actionable insights into tactic performance from the vantage point of the content offered. Use this method when the delivery mechanism has wide variation in impact, when the target audience is especially challenging to reach, or when support is needed at specific buying stages. A disciplined approach takes content from “the elephant in the room” to a defined and malleable variable in the mix. With more rigorous insight into content quality, decisions about changes to aspects of marketing such as what to offer or when to gate or un-gate content are easier to make and better matched to what the audience is likely to consider a fair exchange of value.

Step One: Review the content objective. Is the goal to attract new prospects or contacts, or engage existing contacts at specific buying stages? Do you need the content offer to encourage contacts to self-identify or is tracking behavior enough to provide value? What gaps in information is the content designed to fill, or what new knowledge is it designed to deliver? When you know what the content must achieve to be successful from an internal perspective, it’s easier to assess whether it has the potential for success from the customer or prospect’s point of view. If it’s impossible to be specific about the content’s objective, or even match it to a clear buying or customer lifecyle stage, it’s time to take a look at changes to the content.

Step Two: Define the content’s target audience. Who exactly are you looking to reach with the content? Is it a broad, unfamiliar audience that doesn’t know your brand well and with whom it’s key to attract attention, build awareness and position the company? Is it a narrow but unfamiliar audience that will require more precise messaging to gain attention? Is it a broad but familiar audience who already knows and trusts your brand but still requires relevant information to drive engagement? Is it a narrow but familiar audience that will require even greater relevance, but likely be more willing to share information in return for it? Who you need to reach, how much they trust and value your brand or your partners, and how specific their information goals are likely to be all dictate the measure of content’s quality.

Step Three: Be honest about uniqueness and value. Based on goals and the audience in question, take a look at how well the content matches on both fronts from an internal view. Then, take your evaluation outside; look at what is available from competitors or others providing information to your target audience on similar topics. Does it provide similar value to your content or not? Is it gated or un-gated? Buyers and customers shop around for information, so your evaluation of quality must take into consideration the next best alternatives.

Agreements with private-equity firms require that private-equity executives take an active management role in the acquired company, at least at the board level, by setting targets and budget allocations. Because these deals are usually highly leveraged, private-equity managers’ number-one goal is to start generating a swift return on investment (ROI). They typically focus on improving financial performance by slashing operational costs and improving efficiencies. Marketing budgets do not escape these drastic cost cuts. Our benchmarks show that marketing budgets for private-equity-owned companies are usually underfunded compared to companies with similar products and go-to-market strategies that are financed through other vehicles. The reason is that marketing is often a large expense category and has a hard time demonstrating ROI.

While branding and advertising programs are likely to be slashed first, marketing still has an opportunity to play a measurable role in boosting revenues through field marketing and demand creation initiatives. Some of the key performance indicators we recommend tracking are:

• Marketing sourced pipeline. The percentage of the total pipeline that marketing has uniquely created.
• Marketing influenced pipeline. The percentage of the total pipeline that marketing has touched during a set time period.
• Investment-to-pipeline ratio. The amount of sales pipeline sourced for every program dollar invested in demand creation.
• Investment-to-revenue ratio. The amount of revenue sourced for every program dollar invested in demand creation.
• Investment-to-influence ratio. The amount of sales pipeline “touched” for every $1 invested in all marketing activities designed to influence opportunities in the sales pipeline.

Because private-equity managers tend to be metrics- and results-oriented, they are likely to take a short-term approach to evaluating results, emphasizing detailed quarterly reports even for small companies (below $50 million), which is not typical for private companies when other financing means are in place. Field marketing should position these reports as periodic monitoring tools to determine whether campaigns are on track to achieve targets, not as conclusive performance indicators. For correct evaluation of results, we recommend a 12-month view that covers campaign planning, execution and at least one sales cycle; this ensures that all leads generated from campaigns are accounted for and that the investment is properly matched with the returns. Maximizing efficiencies in the process of handing off leads from marketing to sales, as well as establishing recycling and nurturing programs for leads that didn’t immediately convert to completed deals, will enhance these measurements and demonstrate that marketing can directly impact the pipeline and deliver ROI.

Effective implementation of demand creation programs can be challenging when funding for other marketing activities (e.g., branding and awareness, marketing communications) is reduced, because these investments are important for seeding demand. To mitigate the impact of marketing budget cuts, one way to make the most of field marketing’s potential is by establishing tactic alignment with specific stages of the buying cycle. Segmenting and targeting buying phases can make each interaction with a lead more meaningful and result in fewer touches needed to qualify that lead.

Cutting costs can improve a company’s financial performance; however, maintaining adequate investment in field marketing, in particular, can boost sustainable long-term growth while providing private-equity managers with the sought-after ROI that makes their portfolio stand out.

1) Focus. What’s more precious and in-demand than time and attention? For the marketers I talk to every day, their focus is divided among so many things, from marketing automation deployment to email deliverability problems to social media. Their customers’ and prospects’ time is divided too, with our data showing an average of 20 marketing messages hitting their inbox every week. The only way to make sense of all these competing priorities is to decide which ones really are priorities. While you’re at it, make sure these priorities are based on buyer and customer needs and those actions that will contribute to meeting your goals. Everything else is just noise. The areas of focus that will make the biggest impact in 2011 include: 

• Planning: What are the very few messages that you want to be known for in the market? Do buyers respond to them? Once you know that, what are the sources of information those buyers value? What is the best way to deliver them? How do needs and preferences change as they move through the buying process? Effective planning will take all these inputs and provide a marketing roadmap that uses a handful of messages, reinforces them via the right sources, and delivers them in a way that’s preferred by the individuals you want to reach. Focus on developing this roadmap.
• Data: It’s impossible to do good marketing if you have bad data. We estimate that on average 30 percent of records in marketing databases are bad, meaning they can’t be used. That’s a big problem, but it’s one that can be fixed if it gets attention. If you’ve put it off in 2010, make it a key area of focus in 2011. Better data does a lot to help make planning easier, too.
• Measuring results: Better planning makes clear the chain of desired outcomes from investments in marketing, and that means you need to keep score to know if you’re delivering those outcomes. Measure the impact of what you do in terms of how it supports marketing and overall business goals. Be ruthless about choosing the right measures to show impact. New leads to sales is only part of the story. Know where and how marketing is investing in all aspects of the buying process, and how those investments show up, then tell the story with data.

2) Integration. By nature, most marketers are collaborative. Why, then, do we keep isolating ourselves in silos of technology and activity? One of the great opportunities for marketers in 2011 is to amplify their efforts by combining them with the efforts of others to support the entire buying process, not to mention the customer lifecycle. Here are two areas of integration opportunity:

• Data integration: If information wants to be free, then it wants to be free to get together with other information and tell a story. The linkage of marketing and sales data delivers a rich view of what happens to every prospect and every dollar invested in moving them them through the buying process. But there’s an “if” coming: The data can only tell that story if the process is there to collect it, and if the data can be integrated for analysis and insights. Start by defining the information you need to make better decisions, then figure out how to be sure you’ll get it. Technology isn’t enough.
• Message and activity integration: Our data shows that when top-of-the-funnel marketing activities are designed to reinforce and amplify the messages used in later-stage demand creation and sales enablement activities, there can be as much as 40 percent improvement in the conversion rates of opportunities.
• Start with messages: Focus on a few messages and systematically incorporate them into every inbound and outbound marketing activity, from social media to email to traditional events. Next, work on activity integration. Use standardized, integrated planning to define what activities will support of buyer’s journey, regardless of who executes, from online to events to PR. When you start with buyer needs, it’s easier to understand how all these separate activities can be brought together. 

3) Insights. Guessing is just not good enough for best-in-class marketing organizations. The best marketing work in the year ahead will be done by those companies who get actionable knowledge from all that data they collect. The the next big thing for marketers is finding and using insights to make marketing deliver better results. The insights that will do the most good in 2011 are these:

• Customer and buyer insights: For a better plan, use data to know your buyers’ needs and preferences. Know how they interact with you and each other. Use those insights to inform all marketing investments to reach them and help them through their decision making. This is extra true for existing customers, by the way. We already know who they are and what they buy from us now, plus a whole lot more that would help us to do better marketing to grow that business. Make the effort to put those insights to work.
• Performance insights: Performance data becomes actionable insight when it’s combined into a story that shows what to improve, as well as where are pockets of brilliance to celebrate and emulate. Based on measurement that allows tracking the activity of buyers, the movement of leads from phase to phase, and the performance of tactics offered to those buyers, there’s a lot we can learn from our own information. Don’t miss out on what the experts on your team can teach.

While Teradata has largely flown under the radar as a MAP provider for B2B organizations, many large B2C enterprises have leveraged Teradata’s potent combination of marketing automation (both its own and through partnerships) and data warehouse technologies to establish tight integration and access to customer data. With the increased focus from B2B marketers on the power of their data and the requirements for advanced analytics, more scalable vendor choices in this area can only be positive.

Since Teradata has been trying broaden its appeal, the Aprimo acquisition will not only help its marketing technology solution — particularly from a SaaS, lead nurturing and MRM perspective — but should also make it a more palatable choice for B2B organizations and CMOs. For the time being, Aprimo will continue to market its products and services under its own name.

Saying that the MAP market will continue to consolidate has become a bit of a cliche; it’s been far more interesting to see the types of vendors that choose to acquire a MAP provider and debate who’s next.

Unfortunately, we still see organizations purchase a marketing automation platform (MAP) in an attempt to automate processes that don’t exist; in instances where this has occurred, the technology has struggled to demonstrate results. As a result, any journey into MAP ROI must compare organizations where a MAP is implemented without strong surrounding processes, those that wisely combine technology with process, and those with no MAP.

We’ve been using our Demand Creation Waterfall as a framework to compare the benchmark conversion rate data we’ve collected for each of these three scenarios (see the graphic). While this post uses sample numbers (our clients have access to more granular benchmarking data), the results are both stark and startling, and they include the following.

• No MAP, no processes. Here, there is no true demand waterfall, per se, but rather a funnel with an extremely wide top that quickly narrows to a trickle by its end. With no shared processes in place between sales and marketing (e.g. target market, lead definition, lead handoffs, service-level agreements), demand creation leaders have little choice but to flood the waterfall with hand raisers from outbound efforts. Because all but the most apparent inappropriate responses are passed on to a qualification function such as inside sales, conversion rates from response to “lead” can be high but few will convert from opportunity to close. 

• MAP, but no/weak processes. Our second group is made up of organizations that purchase a MAP, but don’t spend the time building all — or even any — of the processes that drive true MAP performance. In and of itself, a MAP will help marketers refine their targeting and the more surgical application of content to prospects; both combine to drive greater response rates. While the increased percentage of deals looks good on the surface, when considering the costs involved (and the ASP of your offerings) the figures are rarely impressive.

• MAP with average processes. Our third group consists of organizations that purchase a MAP and drive alignment between sales and marketing around target market, lead definition, lead handoff and service-level agreements at even a rudimentary level. When this occurs, marketers are able to take advantage of broader MAP functionality, including lead scoring, portfolio marketing and lead routing versus the more simple campaign management functionality used in scenario two; the value of this functionality can be seen in performance throughout the waterfall. 

Clearly, organizations that address demand creation processes and skills, at even just a basic level, are best positioned to leverage marketing automation technology. Imagine the results your can achieve if you reach strong or best-in-class status.

Easy enough, but at what point does less B2B marketing investment actually result in less sales? What happens when a company no longer attends or hosts the events and activities that sales reps rely on to qualify and win deals? Fewer white papers and Webcasts gathering interest and educating prospects at the beginning of the buyer’s journey, less case studies and reference accounts in the middle of the solution exploration phase, and fewer live events and Web-enabled product demonstrations during the final decision phase. Sales reps are increasingly forced to go it alone and often end up doing what marketing used to do (e.g., host live events to help close deals), which means less time actually selling and winning.

So, instead of fighting against other business functions, why not get smart and stand together to fight the competition? That requires marketing and sales to understand the direct impact that certain marketing activities have on sourcing and influencing the sales pipeline. That requires marketing and sales to understand which marketing activities are most effective at finding, qualifying and closing deals. That requires sales to tell marketing what and when it needs things. That requires clean and clear processes and agreements between marketing and sales, tracking of activities and proper attribution, supportive and integrated systems and tools, and effective reporting capabilities. And that requires a marketing function that is capable, properly funded and up for the challenge. If marketing knows that sales needs more new leads in certain industries or regions then it should invest in activities designed to generate more new leads. If sales reps tell marketing that they need more programs designed to accelerate leads toward the bottom of the pipeline then marketing needs to be able to respond and target events and collateral at those opportunities. 

Lots of “ifs” in those statements, but the resulting “thens” are clear. When sales knows the impact of what marketing does and uses that to communicate back what and when it needs help, then sales is more productive and effective — such as a higher percentage of sales pipeline sourced and influenced by marketing, improved close rates, higher percentage of time selling, faster deal velocity, and higher average selling prices — and marketing is more impactful and viewed as a valuable, enabling accomplice rather than just another department fighting for limited funding. It is always better to have a willing and invested accomplice standing with you rather than against you.

The following data is based on benchmark studies, surveys, interviews and inquiries we’ve conducted during the past 9 months. Please note that this data was collected from over 600 B2B organizations around the world, distributed equally across small, medium and large enterprises. The one common characteristic is that while these organizations may have some transactional business, they all have longer, complex sales cycles.

• While close to 70% of B2B organizations are using social media in some way, only 19% have a coordinated, enterprise-wide strategy.
• Close to 80% of B2B organizations are only applying social marketing at the top of the funnel.
• B2B organizations that integrate social media into their demand creation programs report a 32% increase in campaign responses.
• B2B organizations that use social media throughout the demand creation waterfall report up to a 40% increase in closed deals.
• Only 21% of B2B organizations are using social media throughout the nurturing phases of longer sales cycles.
• Only 19% of B2B organizations report that they are using social media tools or tactics as part of sales enablement programs.
• Less than 15% of B2B organizations have a central social media function (what we call Social Operations) that provides the services/expertise necessary to empower a wide range of employees to leverage social media.
• B2B organizations are losing up to 30% of an individual’s productivity when multiple staff are using social media in an uncoordinated way, to say nothing of the mixed marketing messages and dilution of brand that occurs.