In principle measuring marketing results is relatively easy but how do you really prove the positive impact of your B2B marketing activity? Yes you can measure clicks, opens, shares, impressions and a host of other signals but how does that relate to sales? While owners of the business may be interested in activity all they ultimately care about is sales.
In an old (but still gold) post Annuitas state ‘The rest of the organization tracks and marches to the beat of the revenue drum. Marketing must follow suit. Clicks, opens and responses do not mean anything if they cannot be tied back to a revenue stream’
Although it can be difficult, measuring sales leads is one possible answer. However, as there is always a time lag between the lead and the sale it is not a perfect measure. Lead measurement also leaves the marketing department wide open to attack by those who may be looking for somewhere to hide. It is too easy for others to claim the leads are of poor quality, or for the wrong products or from the wrong customers.
Measuring Inbound vs Outbound
The trend towards inbound marketing further exacerbates the problem. A major element of inbound marketing revolves around content but producing and distributing that content comes at a considerable cost. It may be easy to construct an argument that shows inbound marketing is far more effective in B2B markets than outbound but without being able to tie the costs back to a recognizable output (sales) that argument is likely to fall on deaf ears.
Directors and financial officers have often become conditioned to measuring marketing results v budgets based on outbound techniques like traditional advertising, direct mail and exhibitions, it is what they expect and, to a point understand. It may be frustrating that the such activities get approval ahead of an inbound approach but the standard of proof on something that is new is always much higher.
One Possible Solution
When relating marketing activity to results, and specifically to sales there is no perfect answer. One, relatively simplistic, but useful technique is to set a baseline based on past activity. How many leads are generated at present per month and what is the average conversion (leads to sales).
A variance factor may be added to this number (perhaps +5%) then it is relatively safe to assume that if leads increase beyond this level it must be due to marketing activity. This is a particularly useful measure if adding in new marketing processes including inbound marketing.
Leads can then be converted to a rough sales number and compared directly with the marketing costs of generating that sales number to give a ROI. The measure is not perfect as sales numbers can be impacted by a wide range of factors beyond marketing control but it does give an indication that higher management and financial people understand.
Sales may wish to claim that the increase in sales numbers is due primarily to their activity and increased conversions. However, marketing may argue (with some justification) that a major part of that success is due to increased lead quality.