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Marketing Tactic ROI: Making Sense of It All

April 19, 2010 | By Megan Heuer

One topic dominated conversations during my travels and on client calls the last several weeks: marketing tactic return-on-investment (ROI). This is hotly debated by analysts and consultants, not to mention pretty much anyone who has ever had to run or defend budget for a marketing program.

One topic dominated conversations during my travels and on client calls the last several weeks: marketing tactic return-on-investment (ROI). This is hotly debated by analysts and consultants, not to mention pretty much anyone who has ever had to run or defend budget for a marketing program. Like any good question for the ages, the answer is “it depends,” but we can offer some clarity around what it depends upon and what can be measured.

Let’s start with the definition of a lead, because that’s where the ROI calculation trouble usually begins. For the record, we don’t believe every inquiry is a lead. It’s an inquiry, which means someone who has raised his or her hand to take some action you have made available. An inquiry can be anything from a newsletter sign up to a whitepaper download to an event registration and more. On its own, an inquiry does not signal readiness to buy, which means it is not a lead (yet). Our years of benchmark data show companies who treat every inquiry as if it is a lead and send it to sales do not perform as well as those who have a process to nurture contacts from inquiries until they are properly qualified and ready for sales. When marketing teams follow this pattern of sending every inquiry to sales, they reduce potential to deliver against goals in the most effective way possible, and by extension this reduces potential for sales to be more effective and efficient. Now in the rare case where an inquiry says “call me I’m looking to buy,” the qualification process is a lot shorter, but this type of inquiry is less common than, say, a whitepaper download. Case in point: this week alone I got two calls from companies after I completed forms to download whitepapers in which I clearly stated I was an industry analyst and not looking to buy. In both cases, a competent and polite sales rep called and asked me about my inquiry. If they had read the form, they would have known the call was a waste of time. Calls are not free, so sending an unqualified contact to sales also wasted money.

Based on this thinking, let’s tackle the tactic ROI question. Specifically, marketers want to attribute dollar return based on closed deals to a single tactic, when no single tactic deserves that much credit. If you know your sales cycle involves multiple touches from marketing before you can consider a lead qualified and ready for sales, then it is impossible to attribute revenue from a closed deal to any single tactic. Some systems are set up to attribute a first or last marketing touch to each lead that is passed to sales and that’s the tactic that gets credit for the close. This results in a flawed view of what really works because all you see is one touch, when in fact there may have been tens of touches over a long period of time that in combination supported qualification of a lead. It’s just not that simple in B2B, and trying to make it simpler can hurt marketers’ ability to allocate resources. Instead, take a more realistic and practical view of the role of tactics by monitoring cost per response (from new or existing contacts) and cost per contact added to the database. Next look at the appearance of those tactics in the buyer’s journey. First look at the number of touches it typically takes to qualify and what those are, then look at the touches present all the way from qualification to close. This will provide a more accurate view of the relative success of various tactics vs. their cost. The key is not to confuse tactic ROI with overall marketing ROI, because doing so sells them both short.


Megan Heuer

Megan Heuer is Vice President of Research at SiriusDecisions. With more than 20 years of industry and professional services experience, she has worked both in – and for – organizations to build a wide variety of collaborative sales and marketing deliverables that drive systematic, predictable growth. Follow Megan on Twitter @megheuer.

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