How B2B Marketers Should Measure the Business Impact of Their Campaigns
March 13, 2018
You wouldn’t use a yardstick to measure a cup of water. Nor would you use a thermometer to gauge the tire pressure in your wheel.
It’s becoming equally clear to B2B marketers that traditional vanity metrics aren’t suited for giving us an accurate read on the business impact of our ad campaigns.
Standards such as click-through rate, cost-per-click, and even total clicks and impressions can provide us with a nice feeling of accomplishment but beyond that, they aren’t all that telling. In fact, they can be outright misleading as indicators of success.
Is the large volume of website traffic actually your target audience? Is a high CTR mainly driven by audiences that aren’t your target? What does a “like” on social media equate to in terms of revenue?
Daniel Hochuli wrote last year at Content Marketing Institute: “As far as the numbers go, vanity metrics look great on paper. But the sheen on these numbers fades when you try to use them to explain important business outcomes like ROI or customer lifetime value (CLTV); they become hollow digits that contribute little substance to proving your marketing is making money.”
Top 5 Metrics for Measuring B2B Campaign ROI Today
In this B&T post Michael Buckley, managing director of Accenture Interactive in Australia and New Zealand, argues that CMOs have a golden opportunity to become chief growth officers, but risk being surpassed if they don’t grab it with both hands. In it, he shares:
"A recent Accenture study revealed more than one third of CEOs are placing chief marketing officers (CMOs) in the hot seat when it comes to executing growth strategies. Given this pressure, it’s not surprising that CMOs are increasingly looking to take the lead in disruptive growth."
In 2018, we need to start transforming B2B marketing ROI from an ambiguous ideal into a measurable outcome. This requires a shift in focus, from quantity to quality. On LinkedIn and elsewhere, five metrics have emerged as the most effective for assessing campaign performance as it pertains to the bottom line.
Marketing Impacted Pipeline
Sometimes a well-crafted LinkedIn marketing strategy doesn’t yield customers at the rate you’d expect due to shortcomings of the sales team, or other external factors.
For this reason, segmented measures like marketing impacted pipeline are useful. As much as we advocate for aligning sales and marketing to rally around revenue, it’s still necessary from an operational standpoint to distinctly attribute productivity in order to determine what’s working and what’s not.
SiriusDecisions offers some tips on measuring the impact of marketing on increasing pipeline. For marketing campaigns on LinkedIn, Conversion Tracking will be key for this assessment.
Marketing Impacted Revenue
Taking the previous metric a step further, how many dollars coming in from customers have marketing’s fingerprints on them? As Geoff Roberts explains, “This is not about creating an ‘us versus them’ scenario – it’s about being intelligently and honestly informed on the role that each department plays at your company.”
You’ve already determined a method for sourcing prospects and leads to marketing above, so now the question is: what percentage of closed revenue was influenced by your marketing activities? On LinkedIn, this could mean that the customer at some point clicked an ad, downloaded a whitepaper, filled out a Lead Gen Form, or any other number of activities. It is easy to track and connect this data with the reporting tools available in Campaign Manager.
Average Deal Size for Marketing Touched Deals
Now that we’ve pinpointed which customers marketing helped land, what is the relative value of these deals? Because the research and audience targeting involved with a B2B marketing process should be scoping higher-value candidates (especially in an ABM model), ideally this figure will check in higher than the average size of deals orchestrated through a business referral or straight sales outreach.
Cost Per Acquired Customer
It goes without saying that new customers are hugely valuable. Not only do they bring fresh income, but also new relationships, new connections, and new upsell opportunities. Because of all these advantages, account-based marketing is quickly growing in popularity as organizations take a qualitative approach to targeting and pursuing high-impact prospects.
Kissmetrics has gone so far as to call customer acquisition cost “the one metric that can determine your company’s fate.” Lowering this figure means more sustainable growth, period.
Although it’s sometimes more nuanced, the basic calculation on LinkedIn is quite simple: Add up all your marketing costs tied to the platform, and then divide them by the number of new customers you’ve attributed to activities and campaigns there.
Customer Lifetime Value
For many companies, the up-front deal size is not the only important thing, or even the most important. When recurring revenue is at play (and in B2B, it almost always is), customer lifetime value is the critical measure.
By discovering this number, in conjunction with your cost per acquired customer, you can surface a clear and compelling picture of ROI at a high level. And when the trend isn’t positive, you know your strategy needs adjustment.
Putting Pieces Together for a Full Picture
None of these metrics will provide a complete portrait of marketing’s impact on your business by itself. But when you pull them all together you’ll have a comprehensive view of the cost/revenue correlation. With a clear picture of what’s working to boost the bottom line, marketing can make a well evidenced case for more budget, more headcount, and more infrastructure investments to support those tactics.
This doesn’t mean you should abandon conventional measures like CPL and CPC, or other vanity metrics, but in the current digital environment they tend to be more informational than actionable.
With the right tools, you’ll have a much more accurate idea of marketing’s role in growing your company.
The benefits of this clarity are immeasurable.
Download Solving for ROI: Measuring Peak Performance today to get your hands on your checklist of ROI best practices to keep handy.