building cmo power by driving revenue in b2b

Building CMO Power by Driving Revenue in B2B

Jon Miller, VP Marketing and Co-Founder, Marketo Author, Modern B2B Marketing blog@jonmillerJeremy Johnson, Chief Marketing Officer, 2Tor@jeremyj

http://www.marketo.com/

http://www.marketo.com/

© 2012 Marketo, Inc. Marketo Proprietary and Confidential

12%

20%

15%

9%

44%

Improve profits by more than 20%Improve profits by 10% to 20%Improve profits up to 10%No major change in profits generatedDon't Know

What Profits Can Be Generated With 10% More Budget?

#1 Answer:Don’t Know

Source: 2010 Lenskold Group / emedia Lead Generation Marketing ROI Study


When Metrics Take Away Power

Vanity MetricsSound good and impress people, but don’t measure impact on revenue or profitability

Activity MetricsMeasure what you do instead of what results and impact you have


When Metrics Take Away Power

Cost MetricsFrame marketing in terms of cost and spending instead of results and outcomes


Metrics That Give CMOs Power“Speak the Language of Business”

Aggregate impact on company revenue; pipeline performance; predictive forecasts

Revenue Cycle and Forecasts


Metrics That Give CMOs Power“Speak the Language of Business”

Incremental revenue contribution and ROI of individual marketing programs

Program Performance


Key Idea: Model the Revenue Cycle

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Marketo’s Revenue Cycle

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Names are just names.



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Meaningful interaction with us.



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Qualified, engaged potential buyers.



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Showing buying signs or significant engagement.



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Qualified as sales-ready by a human.



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Accepted and actively worked by sales


Model the Full Revenue Cycle

Screenshot: Marketo Revenue Cycle Analytics


Filter/Drill into data, e.g. by Program Type, Business Unit, Geography, etc.

Key topic areas:• Balance / Reach• Flow• Conversion• Velocity

Trends over time

SLA violationsScreenshot: Marketo Revenue Cycle Analytics


Using Metrics to Set and Justify Budgets

Opportunities 200 / mo($2,000)

New Customers($5,000)

Leads3,800 / mo($105.25)

Prospects6,000 / mo

($67)

20%Active Prospect

Database

4% / month 75%

Paid Names($13)

10%UnpaidNames

($0)

20%

Inactive (Last 6

Months)

Lead Type Variants• Source• Channel• Division• Size

80%

80% of all deals follow this model

• Lead to Sales Lead: 10% • Sales Lead to Opp: 74%• 1.4 people per Opp1,000 Leads = 53 Opps

30,000 / mo


ENT “Paid Sources”Opportunities

10 / mo($10,219)

Leads420 / mo

150 fast, 270 slow ($230)

Prospects780 / mo

($125)

20%

Active Prospect Database

3.4% / month85%

New Names2,067 / mo

($47.20)7%

38%Inactive (Last 6

Months)80%

• 5.27% conversion• 2.3 people per Opp• 1,000 Leads = 23 Opps

$97.5K


Why Measuring Programs is Hard

• Multiple touches. Seven touches needed to convert a cold lead into a sale

• Multiple influencers. Typical buying committee has 5-21 people

• Tyranny of time. The money you invest today will have an uncertain impact at an uncertain point in the future


Ways that Companies Measure

• 20%: No tracking• 45%: Single Attribution • 21%: Attribute Across Multiple Programs and

People• 11%: Test and Control Groups• 3%: Market Mix ModelingSource: 2010 Lenskold Group / emedia Lead Generation Marketing ROI Study


Single Attribution W/ Revenue ProjectionSource Prospects Cost % Lead Velocity (Days) Lead to Opp Index

3rd Party Email Blast 9,049 $36 20% 32 0.5Trade Show 3,786 $36 22% 29 1.8Trade Show – Virtual 3,125 $18 17% 48 1.0Paid Webinar 1,971 $71 26% 33 0.7PPC 1,494 $135 45% 15 1.8AppExchange 1,128 $41 72% 3 2.4Content Syndication 881 $69 18% 29 1.2Social Media 588 $94 33% 16 0.2Other Paid 1,645 $45 25% 32 0.9Website/Inbound 5,133 58% 9 1.9Referral / WOM 564 21% 32 1.4Sales Prospecting 349 19% 71 3.9


Track All Touches Across People



First Touch vs Multi Touch Attribution



Example: Test and Control

Source: Lenskold Group


Marketing Forecasts

• Where the CSO lacks “bottom-up” visibility, marketing forecasts can fill the void

• Marketing has long-term view and visibility into the early stages of the revenue cycle

Traditional Marketing Forecast

The market will grow by an estimated 4.2% overall and by 5.1% in the Western region.

Highly Accountable Marketing Forecast

Marketing will generate an incremental 30 new deals worth $4.0 million of bookings that are not currently in the sales forecast.


Forecasting Conversion Over Time

• Predict conversions from one stage to another over time• One model per transition per lead type• Create plans / forecasts about future

3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 780

10

20

30

40

50

60

70

f(x) = 50.7486452521888 x^-0.57138477143868R² = 0.430133719514154

Marginal Conversion

3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 78 -

200 400 600 800

1,000 1,200 1,400 1,600 1,800 2,000

f(x) = 994.202885818322 x^0.135210727928123R² = 0.95505216364088

Cumulative Conversion


Power and Credibility From Forecasting

Get The “Definitive Guide to Marketing Metrics & ROI”

http://bit.ly/DG2MM

http://bit.ly/DG2MM


Key Takeaways

• Reporting is less important than DECISIONS that improve ROI

• Focus on financial metrics that matter to the CFO (profit, cash, revenue)

• Avoid cost and spend metrics – focus on investment and return

• A trusted marketing forecast is the single most important step to make marketing a revenue driver, not a cost center


Question and Answer

JON MILLERVP Marketing, Marketo

[email protected]@jonmiller

JEREMY JOHNSONChief Marketing Office, 2Tor

[email protected]@jeremyj

Thank you!


The Right Metrics

Performance Metrics & KPIs

Past: How did we do?

Diagnostics Present: What is working? How can we do better?

Leading Indicators

Future: How will we be doing?


Drill In Analytics

Prospect to Lead by Lead Source



The Single Most Important Metric

¿𝑻𝒐𝒕𝒂𝒍 𝑹𝒆𝒗𝒆𝒏𝒖𝒆𝒐𝒓 𝑩𝒐𝒐𝒌𝒊𝒏𝒈𝒔

𝑻𝒐𝒕𝒂𝒍𝑴𝒂𝒓𝒌𝒆𝒕𝒊𝒏𝒈𝒂𝒏𝒅 𝑺𝒂𝒍𝒆𝒔 𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕Revenue Engine Effectiveness


Example: Single Attribution

100% of pipeline and revenue allocation to the program that sourced the primary contact



Planning for Marketing MeasurementMeasure ROI to find not just what

works, but what works better. Establish Goals

and ROI Estimates Up-Front

Design Programs to Be Measurable

Focus on the Decisions that Improve ROI


Metrics That Give CMOs Power

Revenue Metrics

Aggregate impact on company revenue; pipeline performance and forecasts

Marketing Program Performance

Incremental revenue contribution and ROI of individual marketing programs


Attribute across Multiple Programs and PeopleA deal worth $100,000 recently closed. Three people were involved in the deal: • Person A attended Seminar A and Trade Show B• Person B attended Trade Show B• Person C was sent Direct Mail C

$100,000 Revenue

$25,000 $25,000 $25,000 $25,000

Seminar A$25,000

Tradeshow B$50,000

Direct Mail C$25,000


Attribute across Multiple Programs and PeoplePros Incorporates all touches,

not just lead generation Useful for long revenue

cycles Focuses on all contacts

associated with deal

Cons Assumptions can add

bias Risk of over-crediting

low impact touch points


Single Attribution Pros and Cons

Pros Relatively easy and low

cost Insight into the lead

acquisition Straightforward insight

into “investment per” lead metrics

Cons Ignores influence of

subsequent nurturing / sales touches

Hard to account for quality until deal closes


Example: Multi-Touch Attribution


First-touch allocation, multi-touch allocation, investment, volume, etc

building cmo power by driving revenue in b2b

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