My CMO used to constantly question the validity of my marketing tracking.  He would question how we knew that marketing made a difference and that the sale wouldn’t have happened anyway.  He would ask how we knew it was this event or that campaign that specifically led to the sale.  I would pour over report after report trying to sort this out in fear of my next meeting with him.  Was he right to be asking these questions?  Absolutely.  Did I ever come up with a great answer for him?  Absolutely not.

When you work in B2B services selling big ticket items that take 6-24 months to close, you just can’t find clean metrics that say this campaign brought in $X directly and that campaign didn’t work at all.  It’s all about aggregation.  If you look at activity and behavior over time, the picture can become clear.  One metric I found that I really loved was comparing marketing-influenced versus non-marketing-influenced sales.  You can look at the average deal size and time to close.  I found that on average marketing-influenced deals were larger and closed quicker.  That can’t just be coincidental when you are talking about large enough sample sizes.

It’s still worth it to track the source of leads, though, as long as you are clear about it.  Companies will generally tag the resulting opportunity with either the first campaign that created the lead, or the most recent one that created the opportunity (or both).  That’s still a meaningful metric if you are tracking that consistently – if certain campaigns are never generating leads or pushing leads over the edge, it’s at least worth reclassifying those as branding instead of demand gen campaigns.  You also need to be patient and track over long periods of time before you start analyzing this data.  A few months of data isn’t enough to decide a campaign was successful or not – you may have to wait a year before you do the final analysis.

My advice is this – track everything.  Track the original source of the leads, track the campaigns that push your leads into opportunities, track behavior.  Once you’ve done this for a while (and that may mean 6-24 months depending on your sales cycle), analyze it by going through some deals that closed in detail – look at the campaigns that were run, the contacts’ responses to those campaigns and the results.  Looking at five to ten accounts in detail will probably give you the information you need to figure out what is going on and what is meaningful.  Then you can narrow what you track and the metrics you focus on to report to your senior team.  While it’s not ideal, “I just don’t know yet” may have to be your stock answer for a while until you get enough numbers to make your reports and metrics meaningful.

I love reports.  You just can’t beat some good marketing metrics when you walk into a management meeting.  Unfortunately, one of the biggest challenges to measurement that I often see when a company is implementing marketing automation (MA) for the first time is not having any benchmarks.  If you don’t have any benchmarks, how do you know that you’ve improved your metrics?  As I talked about in my blog post from a few days ago, you will soon have massive amounts of data flowing in, so you need to figure out now how to measure before you get too far behind.

I have two suggestions for you.  The first is just to start measuring.  Pick some metrics that are meaningful and start measuring them.  Your measurement today is your first benchmark, and you can look back over time to see the trend.  Be sure you track these measurements outside of your MA or CRM system if your system does not “snapshot” data (i.e., most systems are just cumulatively adding data, so sometimes it can sometimes be hard to isolate certain metrics and trend them over time).  If you are having trouble picking your metrics, go back to your marketing goals.  If your goal is to make money through marketing, well then revenue related to marketing campaigns would be one of your metrics.

My second suggestion is to use industry benchmarks.  Here are some useful ones:

  • The average B2B firm spends 4-5% of revenue on marketing
  • Based on the Sirius Decisions model, about 13% of Inquiries will turn into Closed Won Opportunities
  • Also based on Sirius Decisions, about 23% of Sales Qualified Leads will turn into Closed Won Opportunities
  • The average open rate for a B2B email is around 20% and the average clickthrough is about 4-5%
  • For a form on a webpage, the average conversion rate is around 0.2%

You can probably find others that are more specific to your vertical – there is a ton of research that exists out there by Sirius Decisions, Forrester, and others.  A quick Google search will usually find you something you can start with.  Good luck and happy number crunching!