metrics that matter for marketing measurement

Metrics that Matter for Marketing

Measurement

© 2010 Marketo, Inc.

The Speakers


David M. Raab

Principal,

Raab [email protected]

Jon Miller, VP Marketing and Co-Founder, [email protected]

#RevenueMasters

Pressures on Marketers

new media: more choices

new buying process: more tasks

new technology: more capacity

new expectations: more pressure

result: greater need for measurement


#RevenueMasters

Marketers Agree:

Measurement is Important

Most Important Concepts: 3 Year TrendAnderson Analytics, 2010 Marketing Trends Report


But, marketers…

…measure the wrong things

What Marketing Is MeasuringVisionedge Marketing, 2010 Marketing Performance Measurement and Management


But, marketers…

…don’t get any better at it

Does your firm calculate marketing profitability, ROI (return on investment) or a similar financial measure to assess marketing effectiveness? (n = 303, 326, 226)

2008 2009 2010

Yes, we calculate ROI, net present value (NPV) or other profitability metrics for at least some of our marketing campaigns / investments

26% 24% 27%

Somewhat, we calculate some financial metrics such as cost per lead and cost per sale but not profitability metrics such as ROI and NPV.

34% 42% 43%

No, we use traditional marketing metrics but not financial metrics.

40% 34% 30%

Use of ROI Metrics to Assess Marketing EffectivenessLenskold Group, 2010 Lead Generation Marketing ROI Study


But, marketers…

…spend our money elsewhere

Planned Investments in Key Marketing InitiativesAccenture Marketing Transformation, Onward and Up (2010)


The problem is…everything

Barriers to ImprovementCMG Partners Chadwick Martin Bailey, The Marketing Performance Advantage 2009


Marketers Need an

Integrated Measurement

System


Measurement System Goals

show aggregate value* from marketing

show incremental value* by program

*value = revenue, not leads


#RevenueMasters

Purchase Stages

anonymous

known

interested

qualified

sales ready

opportunity

proposal

sale


Revenue Allocation

anonymous

known

interested

qualified

sales ready

opportunity

proposal

sale

prospect email 5%

landing page 10%

registration page 15%

white paper 10%

Webinar 10%

demo 15%

pricing page 10%

forum query 15%

clients page 10%


Stage-Based Measurement

prospect email 60%

landing page 20%

registration page 20%

white paper 100%

Webinar 100%

demo 70%

pricing page 30%

forum query 100%

clients page 100%

anonymous

known

interested

qualified

sales ready

opportunity

proposal

sale


Delivery Requirements: Data


Delivery Requirements: Stages


Delivery Requirements: Database


Delivery Requirements: Projections


Delivery Requirements: Testing


Other Requirements…

• integrate with source data

• back-fill using historical data

• plans, costs, scenarios

• alerts for over/under performance vs. history, vs. plan, vs. recent

• ad hoc segmentation & data mining


Reports / Metrics

report goal measures & metrics comments

marketing ROI(total or by cohort)

show value of marketing

- marketing costs (all stages)

- revenue (related to cohort)

- ROI (=revenue / cost)

- relate costs and revenue to set of leads

- aggregate, not incremental

program ROI(incremental)

measure program impact

- incremental marketing cost

- incremental revenue

- incremental ROI

- requires testing

- may not capture long-term effects (e.g. brand programs)

stage results understand stage performance

- stage costs

- conversions (to next stage)

- lead inventory by stage

- cost per conversion

- conversion rates

- average time to conversion

- doesn’t show ROI

- need to track trends

- can be aggregate or incremental

revenue forecast

forecast revenue by period

- lead inventory by stage

- conversion rate by stage

- conversion time by stage

- forecast revenue by period

- doesn’t distinguish marketing-influenced leads from other leads

- must consider variations in quality of inventory


What Next?

make a commitment

work in phases: measure response: check your data

measure acquisition: need simple system

measure nurture: need stage-based system

improve results: need testing and optimization


Summary

better measurement is essential

advanced measurement requires stages

systems are increasingly available

better measurement is really essential



Metrics That Matter for Marketing

Measurement:

How Marketo Does It

#RevenueMasters

Powerful and easy marketing automation

Prioritize the hottest sales leads and opportunities

Measure and predict marketing’s impact on revenue

Adopted by 700 customers in 22 countries in less than three years


Best Marketing Solution

Marketo transforms the way Marketing and Sales teams work – and work together – to improve revenue performance across the revenue cycle

Marketo’s Revenue Cycle: Stages

All

Nam

es

Pro

spec

t &

R

ecyc

led

Lead

Aw

aren

ess

Enga

ged


Oppor-tunity

Cust-omer

Sale

s Le

ad

MQL

SAL SQL

Nurturing Database

Marketing SDR Sales

Transitions Automate Movement


Operational Data & Analytical Data


REVENUE CYCLE ANALYTICS

LEAD MANAGEMENT

• Optimized for transactions

• Real-time data

• Operational reports

• Optimized for analytics

• Data over time

• Analytical reports

Accurate answers that don’t change over time.

Understand The Metrics that Matter


Metrics that matter:• Balance• Flow• Conversion• Velocity

Trends over time

Create Custom Dashboards


Conversion Over Time

Predict conversions from one stage to another over time

Create plans / forecasts about future


y = 50.749x-0.571

R² = 0.4301

0

10

20

30

40

50

60

70

3 13 23 33 43 53 63 73

Marginal Conversion

y = 994.2x0.1352

R² = 0.9551

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

3 13 23 33 43 53 63 73

Cumulative Conversion

Marketing Forecasts

Leads Apr May Jun Jul Aug Sep Oct Nov

Plan 760 800 825 1000 1069 1374 1434 1512Mar 810 850 875Apr 685 850 875 925May 818 875 900 915Jun 909 1000 1069 1374Jul 924 1200 1374 1434Aug 1280 1414 1450 1512

Opps Apr May Jun Jul Aug Sep Oct NovPlan 67 81 82 90 94 100 104 109Apr 83 83 90 93May 81 88 90 94Jun 91 93 95 101Jul 70 90 100 103Aug 92 101 104 109

Prospects Q2 2010 Q3 2010 Q4 2010

Plan 6,635 7,814 9,150May 7,000 7,520Jun 8,380 8,500Jul 8,500Aug 8,800 10,000

Plan Forecast Actual

© 2010 Marketo, Inc. Marketo Confidential and Proprietary

Program Effectiveness Reporting


Program Effectiveness Forecasting


y = 50.749x-0.571

R² = 0.4301

0

10

20

30

40

50

60

70

3 13 23 33 43 53 63 73

Conversion Model

Q & A


David M. Raab

Principal,

Raab Associates

[email protected]

Jon Miller, VP Marketing and Co-Founder, [email protected]

#RevenueMasters

metrics that matter for marketing measurement

Business

raab associates

marketing measurement

marketing profitability

marketing trends

measuringvisionedge

vp marketing

traditional marketing

cohortshow value of