Post on 13-May-2015
description
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
Page 2© 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
Page 3© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 4© 2012 Marketo, Inc. Marketo Proprietary and Confidential
When Metrics Take Away Power
Cost MetricsFrame marketing in terms of cost and spending instead of results and outcomes
Page 5© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Metrics That Give CMOs Power“Speak the Language of Business”
Aggregate impact on company revenue; pipeline performance; predictive forecasts
Revenue Cycle and Forecasts
Page 6© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Metrics That Give CMOs Power“Speak the Language of Business”
Incremental revenue contribution and ROI of individual marketing programs
Program Performance
Page 7© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Key Idea: Model the Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Page 8© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Names are just names.
Page 9© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Meaningful interaction with us.
Page 10© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Qualified, engaged potential buyers.
Page 11© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Showing buying signs or significant engagement.
Page 12© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Qualified as sales-ready by a human.
Page 13© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Accepted and actively worked by sales
Page 14© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Model the Full Revenue Cycle
Screenshot: Marketo Revenue Cycle Analytics
Page 15© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 16© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 17© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 18© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 19© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 20© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 21© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Track All Touches Across People
Screenshot: Marketo Revenue Cycle Analytics
Page 22© 2012 Marketo, Inc. Marketo Proprietary and Confidential
First Touch vs Multi Touch Attribution
Screenshot: Marketo Revenue Cycle Analytics
Page 23© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Example: Test and Control
Source: Lenskold Group
Page 24© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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.
Page 25© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 26© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Power and Credibility From Forecasting
Get The “Definitive Guide to Marketing Metrics & ROI”
http://bit.ly/DG2MM
Page 27© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 28© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Question and Answer
JON MILLERVP Marketing, Marketo
jon@marketo.com@jonmiller
JEREMY JOHNSONChief Marketing Office, 2Tor
jjohnson@2tor.com@jeremyj
Thank you!
Page 30© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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?
Page 31© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Drill In Analytics
Prospect to Lead by Lead Source
Screenshot: Marketo Revenue Cycle Analytics
Page 32© 2012 Marketo, Inc. Marketo Proprietary and Confidential
The Single Most Important Metric
¿𝑻𝒐𝒕𝒂𝒍 𝑹𝒆𝒗𝒆𝒏𝒖𝒆𝒐𝒓 𝑩𝒐𝒐𝒌𝒊𝒏𝒈𝒔
𝑻𝒐𝒕𝒂𝒍𝑴𝒂𝒓𝒌𝒆𝒕𝒊𝒏𝒈𝒂𝒏𝒅 𝑺𝒂𝒍𝒆𝒔 𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕Revenue Engine Effectiveness
Page 33© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Example: Single Attribution
100% of pipeline and revenue allocation to the program that sourced the primary contact
Screenshot: Marketo Revenue Cycle Analytics
Page 34© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 35© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 36© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 37© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 38© 2012 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 39© 2012 Marketo, Inc. Marketo Proprietary and Confidential
Example: Multi-Touch Attribution
Screenshot: Marketo Revenue Cycle Analytics
First-touch allocation, multi-touch allocation, investment, volume, etc