Metrics are a hot topic today and searching to find the metrics that matter. Last year, Gartner asked marketing leaders in IT companies how they were measured and the top responses were “revenue” and “profit.” While I agree that revenue and profit are key metrics for any company, I’m not so sure they are the right metrics to truly evaluate how effective your marketing efforts are. Revenue and profit should be “whole company” metrics–but not the key metrics that one uses to evaluate marketing, particularly sense so much of aspects of those metrics are out of marketing’s control.With that in mind, how should marketing be measured?
To determine that, its important to establish what you believe the role of marketing to be.
The simplest definition of the role of marketing that I have heard (particularly in technology and B2B sectors) is “make it easier for sales to win business.” Unless you are 100% e-commerce, with no outside or inside sales people, this still holds true. How can you tell if you are making it easier for sales? Here are some ideas:
- Evaluate if sales cycle times are decreasing
- Measure the size and quality of the top of the pipeline (not just leads, but good leads)
- Measure the ramp time to full sales productivity
- Measure campaign effectiveness (including cold call campaigns)
- Measure brand awareness
- Evaluate sales turnover
While some of these are not entirely marketing driven, they are more indicative of marketing’s contribution–and they also have a direct impact on both revenue and profit. If marketing is too focused on revenue, they often find their time consumed becoming the hero–flying in the “close the big deal.”
This attitude of marketing as “closers” is counterproductive. First it devalues the sales organization (there is a ton of work to get to the position of closing a deal that is devalued by “fly-in closers”). Second, it means that the sales teams may not have been equipped to close the deal on their own—so marketing is not truly making it easier.
Don’t get me wrong, there are times when the added credibility of a product marketing manager or executive is needed, but that should be part of an orchestrated sales decision, not a tactical approach that is used to offset shortcomings in sales enablement, competitive positioning, or other marketing programs.
Are your marketing efforts oriented to making it easier for sales to be successful? Or are you burying the problem by being “secret sales heroes”? How do you measure marketing effectiveness (and how do you think you should be measuring it)?