Marketing As an Accountable Business Function
Marketing departments do not need more information; they need more connection. The dashboards are brimming with data on clicks, impressions, and open rates, but the chief financial officers still ask one simple question: where is the money coming from? Digital marketing today rewards those who answer with evidence rather than activity.
The Vanity Metric Problem
Traffic and engagements help the marketer to understand what took place within a particular channel. However, they do not tell us what happened after that. A webinar can attract thousands of people but end up with no discussion of any sales. A LinkedIn marketing campaign on the other hand can generate just a few leads for large enterprise deals. Marketers who provide only the upper funnel metrics to their management force them to make guesses, and the management always guesses low.
Build a Shared Definition of Success
Attribution begins with agreement and not with technology. The marketing and sales executives should agree on what constitutes a lead, what is considered an opportunity and a deal. This should be used consistently in one CRM system. If marketing measures one set of stages and sales uses another set of stages, there is no way that the model will close the gap between the two processes. In addition, teams should use a standardized nomenclature for campaigns and tags.
Measure Beyond the Last Click
The last click approach gives full credit to the last touch point and disregards all the previous touch points which have created interest in the consumer. Sometimes search ads or branded keywords can get clicks which have been generated through weeks of content or even event or social media activity. The multi touch approach distributes credit among touch points and incrementality tests tell what the touch point really brings. Both approaches are not foolproof by themselves. However, when taken together, they help marketers understand their pipeline more clearly.
A Real-World Lesson From Dropbox
The Dropbox company is an example of a successful campaign.In its early stages, as founder Drew Houston claimed, the cost of acquiring a customer via search ads ranged from $233 to $388, while the price of their service was $99. So, the equation worked out incorrectly. Thus, the company decided to focus on creating a referral system rewarding customers with additional storage space if they referred their friends. It was also stated by Drew Houston that this system increased conversions by 60 percent.
Connect Spend to Pipeline Velocity
It is important for revenue attribution to be fast. Marketing teams must measure how fast the leads generated by each of the marketing channels go through the different stages of the pipeline, rather than just how many leads they generate. A marketing channel that generates fewer leads but completes them in half the time could get priority over a marketing channel that generates lots of leads but gets stuck in the funnel. Cost per opportunity, pipeline generated per dollar, and customer acquisition cost payback period are all numbers that finance executives can rely on. Digital marketing teams that report them monthly get a voice at budget meetings.
Make Reporting a Habit
Technology is helpful, but habits will prove more important. Teams need to evaluate the effectiveness of channels in addition to sales performance on a monthly basis, discontinue campaigns that lack impact on the sales pipeline, and list all assumptions that apply to any particular attribution model. Sales reps can assist by properly tracking sources of leads and indicating which discussions originated from marketing material. Management will have to avoid the impulse to demand exactness. Good-enough data that gets evaluated regularly and honestly is better than perfect data that comes too late to help in making the decision.
The Bottom Line
Making channel performance metrics tie into pipeline and revenue is no longer considered an advanced practice; it is basic table stakes for a growth-driven company. Marketers who align on stage definitions, look past the final click, and track velocity are given executive comfort to allocate budget. Marketers who rely on vanity metrics are setting themselves up for budget reductions. The decision is easy to make, but it’s becoming increasingly important: follow the money, or see your competitor’s budget rise while yours falls. As buyers increasingly divide their attention among channels each year, successful modern digital marketing will be done by those who can prove success in dollar amounts.
