How well are you managing your B2B marketing performance? In other words, do you know what’s working, what’s not, and where to spend your next marketing dollar with confidence?
This is what Marketing Performance Management (MPM), is all about – and this discipline involves three basic pillars:
- Plans – Tactical activity and strategic goals set by the CMO
- Investments – Budgets, spend management, and reconciling with finance
- Results – Measurements of tactical metrics, revenue impact, and ROI
You and your marketing team need a solid grasp over all three to impact performance, but here are four stumbling blocks many organizations make when trying to optimize their marketing performance.
Mistake #1: Measurement Without Intention
Allocadia’s research, which I will cite throughout this post, found that only 6 percent of marketers, yes, less than 1 in 10 of us, feel that our measurements help us determine the best next marketing action. That leaves 94 percent of us without prescriptive guidance on where to spend limited budget and resources.
This is where marketing performance management differs from marketing measurement.
“If B2B marketing measurement represents what a driver sees in a car’s rearview mirror, then MPM serves as the headlights and the steering wheel of the car itself that improve both visibility and control for the driver.”
– Allison Snow, Senior Research Analyst, Forrester
Mistake #2: Ignoring the CFO and CMO Relationship
We hear plenty about the sales and marketing relationship, but only 14 percent of marketing organizations see finance as a trusted strategic partner, and 28 percent either have no relationship with finance or speak only when forced to.
The trust of a CFO is critical to today’s CMO, as finance takes a more strategic role in the organization. This is about more than earning bigger budgets (though that’s important!) This is about affecting trust between marketing and a critical member of the C-suite.
You want to prove to finance that you’re a steward over the dollars the business is allocating to you, and confidently able to articulate where they’re being spent, how it aligns to plan, and how it’s driving impact. It’s not easy, but it’s why so many companies are adopting Marketing Performance Management – to take control over their investment data and answer questions such as:
- What chips are on the table right now?
- Where do we have flexibility?
- I need to be opportunistic. Can I fit X dollars into this quarter?
- How much confidence do I have in this data?
The answers to these questions help build a relationship with finance, earn more trust and confidence from leadership, and ultimately allow them to run marketing like a business.
Mistake #3: Using Borrowed Systems in Marketing
Your sales team no longer operates without a CRM, just as your finance department has been managed by an ERP system for years. Why, then, does marketing continue to rely on borrowed systems from these departments to manage marketing performance?
About half (47 percent) of companies don’t use any purpose-built technology for planning or investment management. In contrast, high-growth organizations leverage Marketing Performance Management software 3.5X more often than those with flat or negative growth.
Mistake #4: Maintaining Data Quality
Data quality is one of those problems every marketing organization faces today, but its impact extends far beyond the perils of contact information or targeting data.
Without quality data related to investments, budgets, and planning, marketers limit their ability to report and make smart decisions at a moment’s notice. Only 8 percent of organizations have marketing, sales and finance data in a “single source of truth” and only 28 percent feel marketing’s data is accounted for and well formatted (this includes that initial 8 percent).
Perhaps because of this, 42 percent of organizations report only having the ability to run baseline reports on past marketing performance. An additional 13 percent reported that they don’t even know where all their data lives and can’t run any reports.
These mistakes, though common, hold marketers back from evolving beyond simply being a function in the business, to becoming a business in and of itself. Today’s marketers have two jobs, “running marketing” and “doing marketing”:
The best marketers in the world strategize, plan, and proactively manage their investments. They analyze their performance. They determine where and how their dollars can work the hardest. Then they reallocate and analyze some more.
They “run marketing” like a business, because they know it’s the best way to ensure their efforts “doing marketing” will succeed, and the best way to ensure marketers count.