Calculating the Value of a B2B Marketing Campaign

It’s the ultimate question in marketing:

What effect did this campaign have on revenue?

In short buying cycles, where the buyer generally understands the category of the offering, and the transaction is quick and simple, this can be measured relatively easily. A marketing campaign results in a website visit, a product is added to the visitor’s shopping basket, and the transaction is completed. Tying the buying event to that marketing campaign is both easy and sensible. Various marketing campaigns can be analyzed to see what offer, and what creative, drive more revenue.

But in the longer buying cycles we see in B2B, this analysis is not so simple.

Buyers progress through a buying process at their own pace, facilitated by marketing messages and campaigns, but not necessarily driven by them. Some campaigns may generate broad awareness, some might educate on criteria to consider, and some might trigger buying actions directly. All are valuable, but measuring their value requires a different approach than in simple buying processes.

Understanding the Stages

The first key step is to understand where each person is in their buying process. Some may be just names in your database, either acquired names or names that have gone inactive. Some may be interested, but not ready for sales yet, and some might be ready to engage with sales. Lead scoring allows you to objectively define where each person is in their buying process.

As part of this process, it’s important to make sure that buyers are removed from stages if time passes and they don’t continue to show the buying behaviour indicated. As buying behaviour can be transient, with interest starting and stopping at various points, it’s key not to leave an individual marked as being at a certain stage if they are no longer as interested as they once were.

Associate Value with each Stage

With the buying stages defined, it’s now possible to look at historical conversion rates to understand the value of a lead at each stage. For example, if a deal is worth $10,000, and an MQL has a 10% conversion rate to a deal, it is worth $1,000. Similarly, if a lead at the “mild interest” stage has a 1% chance of converting, it is worth $100, and if a raw name that has not yet shown any interest has a 0.2% chance of turning into revenue, it is worth $20 per name.

It’s important to note that these values are based on the conversion rate of the stage through to close, rather than the conversion rate to the subsequent stage.

Campaigns, Transitions, and Value

Now, with this value per stage established, it is finally possible to see the value of a buyer’s movement through the funnel even if it does not directly translate to closed business or qualified leads being passed to sales. For example, if a buyer moves from “mildly interested” ($100/lead) to “marketing qualified lead” ($1000/lead), their value has increased by $900. Similarly, if a buyer moves from “inactive name” ($20/lead) to “mildly interested” ($100/lead), their value has increased by $80. If net new leads enter the funnel, and are deemed to be “mildly interested”, they are immediately worth $100.

If a marketing campaign triggered that transition to take place, the simplest way to look at the value of the marketing campaign is that it added that much value to your lead funnel. If a campaign costs $50,000 and causes 1000 leads to move from “inactive name” to “mildly interested” (1000x$80), pushes 10 leads from “mildly interested” to “marketing qualified lead” status (10X$900), and creates 200 new “mildly interested” leads that were not previously in the marketing database (200X$100), the value of the marketing campaign can be calculated as:

Cost of Campaign: $50,00

Value of Campaign:
1000 X $80 = $80,000
10 X $900 = $9,000
200 X $100 = $20,000
=================
Total: $109,000

You can see that, if only the creation of qualified leads is looked at, the value of the campaign would appear to be very low, whereas it was a very successful and valuable campaign in that it triggered a lot of valuable early funnel re-engagement of inactive names, and generated new interest.


Campaign Value

Many campaigns that we run as marketers are targeted at top-of-funnel, or mid-funnel outcomes. Generating net new names, educating buyers, establishing evaluation criteria, and nurturing buyers are all very valuable activities to perform. However, they can be extremely difficult to measure unless there is a framework in place to assign value to each of the early stages in the buying process.

When the right marketing analysis framework is in place, and each stage of the buying process can be measured, valued, and analyzed, it becomes possible to associate a clear value to campaigns that are targeted at top-of-funnel activities. When we build the overall marketing dashboards for our organizations, we can then value these campaigns in the same way that we value campaigns that target moving mildly interested leads further down the funnel until they are ready for a conversation with sales.

Cash Flow Statement as a Metaphor: Sources and Uses of Leads

Earlier, we introduced the financial metaphors for balance sheet and income statement when looking at B2B marketing analysis. Following on the same financial metaphor, a “cash flow” statement can show valuable insights into the sources and uses of leads, allowing you to dashboard the lead flow within your organization in order to understand which territories, product lines, or business segments are seeing more lead flow than others, and whether the leads are being successfully converted into opportunities.

Understanding which sales teams are seeing the best sourcing of leads gives a good sense of whether there is any imbalance in the lead flows. For example, in the following data, you can see that although the West is generally getting more leads, they are of significantly lower quality. Similarly, while there are lots of leads for Widget B being generated, there is a significant imbalance in lead flow to reps in the East.





With this understanding of which territories, product lines, and salespeople are provided with leads, the next step is to provide insight into the outcome of those leads once they have been handed off to sales. Done properly, the disposition of leads by a sales team after they attempt to connect with them should not only trigger a marketing process to correctly handle the leads, but also provide clear insights into the quality of the leads. If the leads were unreachable, lacked interest, were not the right role, or only had early stage interest, this insight allows marketing to see whether there are potential quality issues with their leads.

Likewise, if certain sales reps are doing a poor job in following up with the leads they are given, this will also show up in the analytics of lead disposition. In the following lead disposition chart, for example, you can see that both Bob Clark and Jane Chen received a large number of leads, but failed to convert many of them to opportunities, instead resorting to voicemails or calling back in 90 days. This may be an indication of a performance or training challenge with these two sales reps.



The more visibility we introduce to our processes for building interest, qualifying leads, handing them to sales, and having sales connect in order to grow a revenue opportunity, the better we are able to improve those processes. The cash flow statement, as a metaphor, provides a great way to look at which sales teams are getting good sources of leads, and what the uses of those leads are. The ability to optimize this lead flow or guide the sales team's response lets us optimize revenue quickly and effectively.

Predicting Revenue through the Marketing Funnel

Predicting revenue is a difficult task for any organization, and it has historically been only attempted in the sales organization. With a buying funnel modeled from the top of the funnel, however, it is possible to begin understanding whether there is enough in the marketing funnel to support the desired and planned revenue goals.

For each stage in your buying process, based either on best-in-class metrics or your own historical results, you can look at two key metrics; the ratio between how many leads enter a stage and how many progress beyond it, and the average time in the stage for those that do progress beyond it. Note that it is critical to have leads degrade from a stage after an appropriate period of time. Without this, your calculations will be misguided as you will be basing your numbers on leads that are no longer sufficiently engaged to be accurately counted as part of that stage.

From there, with the conversion rates known or approximated, simply work backwards up the funnel. If your average deal size is $100,000, and you need $10M in revenue, then you need 100 deals. If the Sales Accepted Leads (SALs) close at a 10% close rate, that’s 1000 SQOs. With a 40% conversion rate of SALs to SQOs, this means 2500 SALs.

In order to create those SALs, sales need to be provided with MQLs that they accept. With an 80% acceptance rate, this means marketing needs to create 3125 MQLs. If the Interested Inquiry to MQL ratio is 10%, that means you need 31250 Interested Inquiries in order to make that $10M number.

However, time is an important element of analysis of the marketing funnel. If it takes, on average 2 months for and inquiry to become an MQL, a SQO is only created after a few initial calls, taking on average 1 month, and the sales process takes 3 months, those 31250 Interested Inquiries will not convert into $10M in revenue for 6 months. This is obviously a very simplified example, but the importance of taking time into account cannot be underestimated. The more your model of the buyers’ buying process evolves to include multiple stages, the more insightful this analysis can be. Seeing gaps in the funnel early can give you insight into revenue shortfalls many months in advance.

It’s important to note though, that is is only a model for deals that are generated by marketing. If you have a partner channel generating deals on their own, or your field sales team generates their own opportunities, this revenue will be over and above the revenue modeled with this calculation.

Medical Symptoms and B2B Marketing Processes

The medical world is very used to the fact that symptoms such as pain, headaches, and nausea are often the body's way of indicating that something has gone wrong. When a treatment is applied to the symptoms alone, it can mask an underlying problem. For example, regular unsupervised use of antacids for heartburn or reflux disease might mask the symptoms of more serious things such as barrett's esophagus, a stomach ulcer, or stomach cancer.

I was reminded of a similar challenge when a lively discussion ensued on LinkedIn about whether marketing should allow sales to “cherry pick” leads. I had written a post talking about the challenge to the overall flow of the funnel when sales is allowed to cherry pick leads. The natural flow of scoring leads, qualifying them, and then handing them off to sales is disrupted when a sales team is allowed to grab the best leads from the funnel regardless of where the scoring system has placed them.

The group discussing the issue agreed, in general, that the disruption of having a salesperson cherry pick leads was not ideal, however, it had the critical benefit of pointing out flaws in the scoring process. A salesperson cherry picking leads that the lead scoring algorithm has not deemed ready for sales may be an indicator of a deeper underlying issue. Perhaps the scoring algorithm misses certain key activities as criteria, perhaps there are opportunities in verticals outside of where the lead scoring algorithm focuses.

In the same way as medical symptoms are uncomfortable for a reason, to get your attention to a problem, the disruption of the smooth flow of leads caused by sales cherry picking can be seen as a symptom of an underlying problem. Whereas I still feel that sales cherry picking is an undesirable outcome, I do believe that if analyzed as a symptom, it can provide interesting and crucial insights into where a lead scoring process is missing the mark.

Sometimes, allowing a few "breaks" in a marketing automation process is a great way to identify opportunities to improve the overall process. When looking at your marketing team's interaction with sales, look for where you see breaks in the process, and look for processes that would completely prevent or totally mask breaks in the process. Removing a symptom of a broken process, much like removing a medical symptom, may only be hiding a deeper underlying problem.

Is Time-of-Day Sending Overhyped?

I can't recall the last time I waited in my inbox at 10:01 on a Tuesday clicking the "Send/Receive" button repeatedly eagerly anticipating the next edition of my favourite corporate newsletter. I'm not particularly bothered by what times emails arrive, as a recipient. I strongly doubt that I'm alone in that.

So why is the email industry enamoured by time-of-day sending optimization? I suspect it comes down to a combination of three factors:

1) Marketers are dying to find ways to improve their effectiveness at connecting with their audiences

2) As email service providers, we can easily build time-of-day sending control into our systems, and it seems like a compelling and simple answer to marketer's needs

3) Tactical metrics like open rates may even show a swing across emails sent at different times of the day, "proving" the effectiveness of this technique


However, this is avoiding the problem. The only true, long term way to better engage with an audience is to repeatedly deliver content that is interesting and relevant to their interests at the particular stage of a buying process they are in. This is not easy. As marketers, we need to work to understand the stage in the buying process each buyer is at and deliver content that is relevant to them. Unfortunately, it is much more difficult to understand buyer interests and needs than it is to simply time an email campaign.

So why does some of the data appear to show a real difference in effectiveness of email campaigns depending on when they were sent?

Much of that comes down to how email is handled in various situation and how that affects the measurement of data. Remember that measurements such as open rates are far from 100% accurate as they rely on the rendering of an image in the email to indicate that it has been opened.

If, for example, an email is sent to me before or during my commute to work, I'm likely to open it on my Blackberry. Images are not rendered and it does not show up as an "open". The effectiveness of the email has not changed, just our way of measuring it.

Time-of-day sending can be very relevant in certain situations, like with media types outside of email, such as voice or SMS, or if an email is being sent on behalf of a sales person, and would seem strange to appear at 2am. However avoiding the challenge of delivering relevant, compelling content in order to focus on time-of-day sending is spending effort in the wrong area.

I look forward to your comments. Are there situations where you have found time-of-day sending highly relevant?

Analyzing B2B Marketing: Balance Sheet and Income Statement

Consistent in every discussion I have with B2B marketing execs is the topic of analysis. We're all very familiar with the tactical metrics on each marketing type; open rates and click through rates on emails, landing page conversion rates, cost per click metrics, traffic statistics, and so on. However, these metrics fall short when it comes to understanding marketing's overall contribution to the performance of the business.


Much recent writing has focused on a campaign-up view of the world, with analysis focused around an attempt to determine the return on investment for each campaign. These ROI or ROMI analysis frameworks tend to run into challenges in a B2B marketing environment as the buying cycle is often of significant length, and influenced by many touch-points.


An alternative, and much more actionable framework, is a top down view that uses a "balance sheet" and "income statement" view of the marketing world to understand marketing's overall effect on top-of-funnel activity. Within this top-down view, marketing actions and campaigns can facilitate buyers moving from one stage in their buying process to another, but the complexity of each campaign's individual influence is smoothly aggregated into an overall view that shows the current view of the top of the funnel, and the transitions that have been made over the last period of time.


The first step in looking at this view of the B2B marketing world is to map the buyers' buying process. Each step from education and awareness through to vendor discovery and validation should be understood and mapped, as these are phases that are influenced by marketing, and thus highly relevant in an overall marketing analysis picture.


In order to understand which buyers are at which phase of their buying process, the techniques of lead scoring can be used in order to map each prospective buyer to their individual stage of the buying process by looking at their digital body language.


With this in place, it is possible to build a "balance sheet" view of the B2B marketing funnel. This is a moment-in-time view of where leads are in the funnel, much as a financial balance sheet is a moment-in-time view of where dollars are in an organization at the end of a reporting period.


To have this view relevant and accurate, it is of course necessary to ensure that lead scores degrade over time. Buying interest is, in most cases, a transient phenomenon, and if a lead has not turned into a sales qualified opportunity (SQO) within a certain amount of time, it likely will not, so ensuring a time-based decrease in score is key.


With a balance sheet view in place, it is then possible to begin looking at the motion in the funnel over a period of time, such as a quarter. As buyers progress through their individual buying processes, the transitions in the funnel can be viewed and analyzed, showing where in the funnel there is growth, and where in the funnel there is shrinkage.


If a large number of leads have been passed to sales as Marketing Qualified Leads (MQLs) and accepted as Sales Accepted Leads (SALs), this may be viewed as a very productive quarter, but if the top of the funnel has been neglected and there is a decrease in awareness and a lower number of inquires than normal, this is a warning sign for future funnel trouble.

With the funnel understood in these terms, our ability as marketers to assess the buyers toolkit becomes very valuable as we can understand what resources are contributing to transitions at each stage of the funnel. If there is a gap in funnel motion at a certain stage, and investment in the buyer's toolkit at that stage can be made.

Presenting a marketing funnel in a "balance sheet" and "income statement" view allows marketing to clearly demonstrate their relevance to the business, justify investments in top-of-funnel activities, and make meaningful contributions to revenue forecasting. Whereas approaching marketing analysis from a bottom-up ROI perspective runs into significant challenges as the complexities of the B2B buying cycle come into play, approaching it from a top-down perspective brings clarity and consistency to the task.






As marketing teams begin to present this "balance sheet" and "income statement" view of the marketing funnel, the ability for the business, and the board to objectively understand marketing's contribution increases. With that shift, the well known tenure challenges of today's CMOs and the compensation imbalances between marketing and sales may begin to slowly disappear.

Sherlock Holmes' Insights on B2B Marketing Data

"Is there any point to which you would wish to draw my attention?"

"To the curious incident of the dog in the night-time."

"The dog did nothing in the night-time."

"That was the curious incident," remarked Sherlock Holmes

Sherlock Holmes makes an interesting point (in the short story "Silver Blaze") about the conspicuousness of zeros in the data. They can, as in this story, lead to interesting investigations and important conclusions.

However, in the busy world we all live in, they can often be overlooked, as they generally do not appear in most analysis, due to the fact that they are by their nature non-events.

I was reminded of this in a conversation with Mark DiMaurizio regarding visual clickthrough analysis in email. Often, in looking at tabular or chart views of email clickthrough analysis, we will only see the links that were clicked on. If zero links were recorded for a click, either due to a technical error such as a broken link, or due to that call to action not engaging the audience at all, that is very valuable information that is being missed.

A very valuable and insightful question to ask whenever looking at any marketing data is "what is NOT being shown" as the insights based on absence from the data can often be as valuable as insights that the data itself shows.

As we look more and more to analyze our efforts in social media, and the efforts and forums that are driving interest in our solutions, we need to keep asking deeper questions of our data in order to draw out the insights from it.

What the Prius can teach about B2B Marketing Analytics

Anyone who has driven in a Prius is aware that it is an interesting experience, different than in most other cars. However, can it really teach us about B2B Marketing Analytics?

I think the answer is yes.

If you look at the dashboard of the Prius, it has some interesting data. Mainly, it shows you your energy consumption, and your gas mileage in Miles Per Gallon. The data is right in front of you, and continuously updated.

It is interesting in that there are no compensation plans, MBOs, or commission structures associated with your gas mileage, but every Prius driver will report the same effect - you change your driving habits. Just by having the metrics in front of you, you feel compelled to do the behaviours that drive the number in the right direction; accelerating gently, not driving too fast, braking slowly.

This works in B2B marketing too. Socializing metrics can drive behaviour, regardless of compensation plans and MBO objectives associated with those metrics. If your marketing organization does not share, socialize, and discuss metrics on campaign response, you may be surprised at what happens if you do.

We all react naturally to seeing metrics in front of us on our behaviour, and much like in driving a Prius, if we see that our marketing campaigns are not influencing buying behaviour, are not driving inquiries, or are not guiding leads to become marketing qualified leads, we will likely stop those activities.

Upcoming Challenges in Campaign Analysis

I was in a good discussion the other day about how to define the end date of a campaign that had social media elements. It's an interesting challenge as social media campaigns can have many effects that keep going for a significant length of time. If, in your analysis, you need to define an end date, it can be tricky.

Looking at campaigns that involve elements of social media, there are a few phases that can affect a campaign:

Initial Launch - the preliminary efforts to get the marketing effort noticed and known in the social media scene. This will drive a number of the initial responses, although the timeframe is usually contained.

Viral Forwarding - any campaign with a successful element of social media contains content that is found interesting enough to be passed on and discussed online in forums such as Twitter. This can be the most significant element of the response in some successful campaigns. It is often contained in time though, so it does not cause as many analysis challenges as the next few elements.

Blog Commentary - here's where it gets interesting. Blog links, articles, and comments may refer to the campaign for an extended period of time. If the content remains relevant, the blog commentary can last months if not years.

SEO Effects - extending that effect is the effect of search engine optimization. As blogs comment on the initial marketing effort, search results continue to improve. This effect of course, again lasts months if not years.

Ghosts of Google - confounding any challenges of defining when a campaign ends is the fact that the algorithms of Google and other search engines have a way of resurrecting content that may be years out of date, which, with good content, can lead to a new trickle of interest in the campaign.

Given these challenges, how does one define the end point of a campaign? Is the concept of a campaign really having a defined "end date" still meaningful in today's world? I'm interested in your thoughts on this topic.

Golf, Putting, Sales Reps, and Growing Revenue

My golf game needs improvement, I can admit that. However the one thing I have noticed is that every time I do manage to get the ball into the cup, it’s when I’m using my putter. The obvious conclusion then is that I should spend all of my effort working on my putting game in order to improve at golf, because that’s what gets the ball into the cup.

Well, no. That’s obviously a flawed conclusion.

It’s odd then that so many CEOs associate growing revenue with hiring sales reps. Yes, it is the sales rep who gets the deal done, but that is at the end of a long process that involves building awareness, establishing thought leadership, nurturing leads throughout a long buying process, scoring leads based on interest, and routing those leads to the right sales rep.

Investing in more sales reps is like working on your putting game. Certainly important, but only part of the picture. We all know that being able to start with a good drive, play the fairway well, and stay out of (or get out of) sand traps is an equally important part of the game. We know it, in golf, because we can clearly see how these move the ball towards the green.

In B2B marketing, however, it is not quite as obvious.

We all understand that buyers progress through their own buying cycle, and in doing so are guided by the information that we as marketers provide for them. However, unless we have mapped that buying cycle, and used an understanding of the buyers’ digital body language to determine who is at what stage of the buying process, it becomes hard to see where in the buying process we need to apply effort in order to improve our overall ability to grow revenue.

Terracotta did a great job of mapping their buying process (see their case study here), and by doing so, were able to understand which of their buyers were at which stage of the process. Doing this, in any B2B buying cycle allows us to see where our strengths are and where our weaknesses are. With this insight, we can then see where we would be best to focus our efforts.

Our ability to grow revenue is based on many factors, of which the number of sales reps is just one. Understanding our buyers’ overall buying process gives us the insight we need in order to understand where we need to invest for maximum results, much like watching our entire golf game allows us to understand whether to work on our putting, our drive, or our short game.

Sybase: Process And Analysis Ecosystem

You would expect that Sybase, as a provider of some great analysis products, would have a good sense of how to analyze their marketing. They do, but under the hood, their great analytics is built upon a very well thought out approach to all aspects of the sales and marketing process. By focusing on the three main goals of sales effectiveness, campaign success, and coverage optimization, Sybase was able to optimize their overall marketing efforts, while providing rich insights into what was and was not working.

This case study is from Digital Body Language. Enjoy:

Sybase: Process And Analysis Ecosystem

As a billion-dollar enterprise software company, Sybase has a broad and complex sales and marketing ecosystem. For the Sybase marketing team, given that they a provider of some of the industry’s leading database and analytics products, and have highly analytical executives, this leads to a need to present a clear overview of what is happening within marketing to all levels of the organization.

To do this, the Sybase team focused on three key areas of analytics; sales effectiveness, campaign success, and coverage optimization. The first of these analytics efforts, sales effectiveness, became the focus of the bi-weekly pipeline review between sales and field marketing. For each region, a detailed review of marketing activity and prospect response would be performed for the key accounts in the region. Highlights of the prospects’ digital body language in accounts that had gone quiet would be used to trigger different account strategies for those accounts.

The second focus, campaign success, was a marketing-driven effort to analyze the effectiveness of campaigns against stated goals. Each campaign would be given different goals based on the call to action (ie, web seminar marketing campaigns would be analyzed on % registered whereas telemarketing campaigns would be analyzed on qualified leads captured). The campaigns were then analyzed against expected goals to understand where successes were being achieved and where ideas could be better shared. This analysis generally remained at the tactical level, as, given the length of the buying process in question, the macro analysis found marketing influence in over 90% of deals.

The third main focus, coverage optimization, was again done as a bi-weekly exercise. Top level marketing expenditure amounts were defined based on industry comparables, but within that overall framework, each expense item was coded by region and product. Comparing both marketing expenditures and prospect interest levels on a region and product grid allowed Sybase to identify areas in need of additional focus and reallocate investments quickly to the needed regions.

By leveraging its own analytics technology to better understand the digital body language of its prospects, Sybase was able to provide its sales team, its marketing team, and its executive team with a previously unavailable understanding of what was and was not working in the revenue funnel.

The Gambler and the Perfect Path; Retrospective Determinism in Marketing Analysis

Let’s say that your organization gets one of those “ideal” client wins – great logo, fair price, smooth sales process. If you’re like most, one of the things that you’ll probably ask is “how did we market to that organization such that the sales process went so well”. I think that’s one of the more dangerous questions that is being asked today. The reason I think it’s so dangerous is that it can lead to the slippery slope of thinking that the success can be replicated like a prescription. It can’t.

Taking a single, ideal, outcome, and then looking for a “perfect path” through a very chaotic, chance-driven process is what Nassim Taleb, in his book The Black Swan calls “retrospective determinism”. The problem with it, is that it ignores the vast number of data points from people who started the process, but did not end up as the ideal client win. Those who did not end up as an ideal client win do not make a story that is at all interesting, so their story does not get told with the same enthusiasm as the story of the ideal client win.

It’s a lot like the gambler who writes a book on his or her gambling strategy. The only gambler who would write such a book, by definition, is the gambler who was able to achieve success. Those who did not succeed at gambling are highly unlikely to become authors on the subject. The gambler will write about the successful strategy, and the proof is in the winnings. The problem is that because only a winning gambler would write the book, there is no way to tease apart the effects of strategy and blind luck.

B2B marketing is in a similar situation when looking for the “perfect path”. It is an amalgamation of 100s if not 1000s of influences that cause a client to buy a product of any reasonable size. We can analyze individual efforts in the chain, and look at certain measurable aspects to see how well they performed (on those measurements) compared to similar efforts. However, when we attempt to look for the “perfect path”, we are fooling ourselves into thinking that we have more control of a process than we really do.

In each marketing interaction that you have with a prospective buyer, many factors are well outside of your control or knowledge. What is happening in their organization, their mood, whether they are distracted by another thought at that moment. At a high level we can see one campaign performing better or worse than another in general, but predicting whether a given individual will respond to a campaign in a certain way is not possible.

So, the advice I always give to people who are looking for the “perfect path” in B2B marketing – don’t. Optimize individual tactics, look for which campaigns were the best contributors in general to results, but don’t fall into the trap of thinking that there is one perfect path through your marketing messaging that is waiting to be found. The world is too random for that.

Interview with The Funnelholic

I had a great chat the other day with Craig Rosenberg, better known as "The Funnelholic", based on his popular blog The Funnelholic (and of course to all of us on Twitter as @funnelholic). Craig is a great guy, fun to chat with, and smart as a whip when it comes to the challenges of managing the top of the funnel.

Our conversation ranged across a number of topics, from the evolution of social media and its B2B marketing applicability, to measurement and the challenges of today's CMO. I got a lot out of our conversation, and I hope you will too.

From my conversation with Craig Rosenberg, the Funnelholic:

Steve: Will social media scale? As it increases in popularity, the 1 to 1 conversations become increasingly more difficult to maintain, and the top names in social media are evolving towards a bit more of a 1 to Many communication model (although many are exerting great effort to maintain as many relationships as they can). Where do you see this evolving to?

Funnelholic: This is a complex question not only for me but for everyone. As I mentioned in my post, Fear of a Twitter Planet (http://www.funnelholic.com/2009/02/04/fear-of-a-twitter-planet-the-11-things-i-know-about-the-twitter-phenomenon/), if I could give the state of the union on social media, I could achieve “internet fabulous” status. I am not there yet.

But your question has a number of interesting elements to it. First of all, is the 1-to-many model bad? Yes, platforms like Twitter are becoming 1-to-many, but that is the whole point. I never thought of a Twitter as a place to house my 1-to-1 connections, although as a result I have had a number of them. To me Twitter is a new broadcast platform. Let me put this in perspective, I spent a year getting hundreds of readers to my Funnelholic blog (http://www.funnelholic.com/), 5 years getting 600 connections on LinkedIn, and a year getting 600 members to my LinkedIn group “Friends of the Funnelholic.” It took me 1 month to get 1,000 followers on Twitter and growing. My buddies in audience development are saying that blogging is dead and sites like Twitter is where it is at. From a promotional aspect, the 1-to-many benefits are great.

Whatever 1-to-1 communication that is lost will be picked up by someone. The Internet runs like a free market -- if there is demand someone will fill it. Facebook continues to have great 1-to-1 relationship capabilities, and LinkedIn has a ton of potential in this area.

As far as b2b marketing and social media, there is the promotional aspect I mentioned above. I can see marketing automation software watching b2b buyers’ social media behavior and incorporating this into scoring and sending customized, relevant tweets or messages.

Steve: Many B2B organizations are getting involved in social media, but as they do, the media shifts and becomes much more commercialized. There have even been recent reports of teens leaving Facebook. Do you think that there will be a clear distinction between purely “social” social media sites and sites where there is more commercialization as we evolve? Or will these lines remain blurred?

Funnelholic: First of all, I haven’t seen reports of kids leaving Facebook. All I see are kids (and by kids, I mean from preteens to 20s) using Facebook and using it ALL the time. I watch the twentysomethings in my office and they live in Facebook -- that is, message their friends, trade links and videos, sign for events, etc. In many ways, for that generation, Facebook is more important than Google.

Commercialization is the biggest problem for social media. For all the traffic and frequent visits, Facebook and LinkedIn should be making billions of dollars but they aren’t. And Twitter hasn’t even shown the market that they have any plan for making money (except probably by getting bought). In your first question, you asked about scale. To me, the ability to commercialize is the biggest impediment to scale. If these organizations can’t figure out how to make money, then social media can’t scale. So, the lines have to blur, but visitors will resist if their social media platform is ALL commercial. If anything, LinkedIn and Facebook have risen quickly for a lot of reasons, but one of them may be their ability to keep the spammers out. The trick: make money without intruding on user experience.


Steve: As marketers continue to refine their ways of measuring their success at the top of the funnel, will we see more standard CMO reporting on their successes (similar to the standard reporting that sales, finance, and operations usually does)? What do you think those CMO metrics will be?

Funnelholic: For the record, I believe marketing will always have fuzzy math. No one can argue that brand and thought leadership isn’t vital to corporate sales success, yet it will and always remain difficult to quantify. And furthermore, the fact that today’s buyer takes 29 touches before they buy means marketing will have to continue to perform a lot of activities that aren’t specifically recorded in ROI. An example: you “buy” a whitepaper lead from an online media source, you begin your marketing automation processes and after watching 2 webinars, talking to a sales rep, reading your blog, etc., it ends up becoming part of the pipeline. As sales is selling, marketing is still working in providing sales tools, pushing the latest article about the CEO, and so on. These are critical elements to one’s marketing department and not easily quantifiable.

That being said, I think the key metrics are:

1. Cost-per-opportunity. Opportunity means pipeline opportunity.
2. Total pipeline dollars created by marketing programs

By focusing on these two metrics, marketing has essentially done “their” job. If sales isn’t doing theirs (closing business), marketing should not be punished. Also, by focusing on cost-per-opportunity and pipeline dollars, it gives marketing flexibility to spend on important, but less-quantifiable, activities that are critical to the marketing funnel.

We can’t ignore ROI. By ROI I mean, marketing spend that turns into real revenue for the organization. The problem with is ROI is that marketers are at the mercy of the sales team. It’s one of the metrics that aggravates the “Sales is from Mars, Marketing is from Venus” dichotomy (http://www.funnelholic.com/2008/11/18/sales-is-still-from-mars-and-marketing-is-still-from-venus/). But I realize it is a reality, so if you must, keep one thing in mind: Time. If ROI is measured too early, than marketing will fail. This is the reason we put marketing automation into place in the first place is that buyers take a LONG time. (especially now). Nurturing has to be factored into ROI, so if you are watching ROI, make sure you watch it over time because it will grow.

What is most important is that marketers have moved away from the “look what I made” marketing strategy of judging oneself by beautiful design, copy, cool booth design at trade shows, etc. Those days are not over (as long as they convert), but aren’t the way to prove your value. The numbers are.

Steve: People still buy emotionally. As we push towards ever-increasing measurability of our marketing efforts, how do we avoid not investing in some of the marketing programs that are less measurable, but might generate the emotional hooks that motivate buyers.

Funnelholic: Well since the theme is social media, I will give this question a “LOL” -- laugh out loud, for the uninitiated. I talk about this above. Everyone assumes as a demand-generation guy, I don’t see the benefits of the entire non-quantifiable marketing mix. Well I do, and this why in the above I believe in creating metrics that can incorporate these types of elements. Here is what I believe every marketing department should have in place in 2009:

1. An optimized lead-management process: This includes humans AND marketing automation. None of your marketing elements will work as well as they should without both. So to recap, these are the elements:
a. A lead-qualification team: In place to convert and qualify leads before reaching sales
b. A marketing automation system: Designed to support the lead-qualification process with a coordinated nurturing program. (Nurturing in my mind begins the minute a lead enters your lead-management system.)
2. An aggressive lead-generation process: This is designed to feed the lead-management process and should include a diverse portfolio of lead sources. You should buy from a variety of different sources to feed your marketing funnel. Your ultimate gauge should be conversion and whether lead sources help you achieve your cost-per-opportunity goals not just CPL. These sources include online media sites, Google Adwords, and so on.
3. A diverse offer set: Offers support all of the processes above, and they include whitepapers, webinars, online video, etc. All of your prospects have different preferences for “how” they like their marketing, so make sure you have something for them
4. Branding and thought leadership support: Marketing departments should include blogging, social media, speaking engagements, and PR. By the way, there are marketing vehicles that incorporate a number of your marketing goals. For example, webinars are a great way to achieve all four goals above: quantifiable lead generation, nurturing, thought leadership, and branding.

I think trade shows should come out of the sales budget. They don’t drive leads and cost a lot of money. They are really good for face-to-face contact with current customers and to create business development deals. Print is dead, too, and shouldn’t be part of one’s mix anymore.

Steve: As marketers focus on responding to buyer interest at the top of the funnel rather than large outbound campaigns, the need for different skillsets in marketing is growing. Where do you see the biggest change in marketing skills/roles in the next 5 years?

Funnelholic: Metrics has changed every business in the organization and marketing is the big one. I have already seen marketing departments start to have more “geeks” in the organization. There are essentially three kinds of “geeks”:

1. SEO/SEM geek – Everyone has one now, and I don’t blame them.
2. Lead management geek – As the marketing automation revolution continues on, it has created a new role in the organization to manage these processes
3. Metrics geek – A lot of times, the person who does No. 1 or No. 2 above also does overall metrics, but the point is, a lot of organizations have a metrics and optimization functions now.

I’m using “geek” as a term of endearment here, by the way, not as derogatory. All in all, every marketer will have to be metrics-centric to survive. I am seeing more and more, consumer-focused Internet marketing folks getting jobs in b2b organizations because they can bring the type of rigor that is needed to be compete.

6 Really Simple Marketing Metrics for your Execs

We've all seen a similar cycle.... if you ask a marketing exec in a B2B company what metrics they'd want, it ends up in a complex description of ROI, funnel velocity, or influence measurement. Great goals, for sure, but not exactly quick wins. So, the reports aren't created for them and they end up with nothing. Let's start from the other direction, and look at 6 very simple measurements that you can provide them that they give them some simple insight into what's actually going on in marketing.


If you already provide this, fantastic, but I suspect there might be more than a few execs who don't have this data about marketing, and who would truly appreciate it. I get the pleasure of chatting with lots of present and future Eloqua clients, and from them I commonly hear that even high level data like this is very much appreciated.


-Contact database growth over time; gives a good sense of new name acquisition, unsubscribes, and overall size of list.


- Web traffic (new and returning visitors); this is where you're driving most people to if you're successful, it never hurts to have execs know about traffic levels. Knowing that x-thousand people are viewing your site on a daily basis never hurts in ensuring budget for the site redesign doesn't get cut, either.

-Raw Inquiries (form submits); I'm a huge proponent of lead scoring, but if you're not at the point where you can provide an executive dashboard of leads, properly scored and tallied, at least put out a list of raw inquiry counts to show inbound interest


-Total Campaigns; How many unique campaigns have been sent in the last month. This shows the level of activity of your marketing team in creating and promoting content, events, and webinars

-Communication Frequency; How often are you communicating with your database, are you under/over communicating


-Top Search Terms; How are people finding you? What are they most interested in, and is it more awareness, discovery, or validation?

So why these metrics? Well, for one, they're easy to do. Not much work with data or business processes involved, and you can have execs looking at them quickly. But, the more important reason is that they begin to focus attention on the right issues. It's only a beginning, but the direction is the right one.


As the world moves from outbound marketing and promotion to inbound marketing and demand generation, you need your execs to be asking things like: How do people find us? How many people are we educating? How frequently do they come to us for more information? Are they only passively reading that information or willing to provide their information in order to get it?


The more that execs ask this type of question, the more they will be bought in to the concepts of inbound marketing and demand generation. They will push for better nurturing of leads, more investment in social media to generate market awareness, more lead scoring, and better coordination with sales on which leads to hand off, and when. Those are the right directions for them to push, and if you can provide them with some of the right data at the start, you'll inspire more of those questions.


If you're already an Eloqua client and just want to build this out, there's some info on dashboarding on Eloqua Artisan - the user blog: http://eloqua.blogspot.com/2008/12/quick-win-whats-going-on-in-my-database.html. Enjoy - I'd love to hear some of your best dashboards that people can get started with quickly and easily.