B2B marketers are frustrated — and finding it difficult to demonstrate their full value along the lengthy buyer journey from awareness to purchase.
A marketing campaign’s effectiveness is more transparent for business-to-consumer (B2C) marketers due to a short sales cycle that involves one emotion-based decision maker who purchases on the spot or shortly thereafter.
For business-to-business (B2B) marketers, the sale is more complex, involving more interactions, more decision makers and more time.
The Marketing Struggle Is Real
With so many hands in a slow cooking pot, how does a B2B marketer show their value?
Well, many don’t.
According to B2B marketers responding to the 2022 Marketing Measurement & Attribution Survey from Demand Gen, the number one challenge to demonstrating marketing performance and impact is the inability to measure and track activity across buyer stages — followed closely by the inability to measure impact across channels and campaigns.
Of the respondents:
- 62% cite a need to show marketing’s impact on pipeline and revenue
- 58% said their ability to measure marketing efforts is inadequate or needs improvement
- 54% said they are being pushed to prove return on investment (ROI) on all marketing investments
- Just 10% said their company’s current ability to measure and analyze marketing performance and impact is excellent
And nearly 70% of those surveyed in MarketingProf’s 2022 State of B2B Marketing Training Report said they don’t consider their marketing team to be very effective.
Maybe it’s time for a makeover.
Forrester said, “historically in most B2B companies, sales, engineering or product is the corporate hero — the source of influence, the powerbase, the ambit of leadership.” While marketing is seen as “a supporting function — an enabler, a cost center.”
Perhaps that’s why Forrester’s 2021 Global Marketing Survey found that just 32% of CMOs report to their CEO and less than half contribute to corporate strategy.
B2B Marketing’s New Destiny — the Architect of Organizational Success
Detailed attribution is not just about getting credit for a job well done or validating the impact marketing has on revenue — it’s also a prime source of insight into the effectiveness of specific actions, allowing for an optimized marketing strategy that pushes resources and funding toward the most profitable channels.
And it’s in the company’s interest to take note because Forrester predicted a big change for marketing in its Predictions 2022: B2B Marketing And Innovation report, including a “new destiny to be the driving force behind the company’ssuccess.”
The report goes on to say that “B2B marketing leaders must transform their organizations and quickly, from their traditional role of brand steward, lead generation machine and sales supporter — to become the architect of organizational success.”
Ross Graber, Forrester vice president and principal analyst, said in a blog post that it’s time for B2B marketers to accurately demonstrate the value they contribute by sidelining the use of marketing-sourced pipeline as a primary performance indicator and embracing a lift-based approach.
He believes that B2B marketing leaders currently spend too much energy trying to show which functions found demand and not enough trying to show how marketing is contributing to the organization's ability to win more business.
“This topic is very top of mind for B2B marketing leaders today as most progressive marketing leaders understand that they do a lot more than finding/sourcing new demand,” Graber said. “They just don't know how to use metrics to show that the stuff they do beyond sourcing is contributing and that affects both their business performance and the funding decisions they make.”
Related Article: The New Priorities of Next-Generation B2B Marketing
Does B2B Need a Lift?
To truly reveal the impact B2B marketing has on revenue, Graber’s research for Forrester focused on a “new vision” of lift-based performance indicators.
“Our intention was to say B2B organizations have to be a whole lot less focused on just reporting back what they found and started with and become more aware of how they are creating lift through their support of the entire buyer’s journey,” Graber said.
He continued, “For so many years B2B marketers have been spending their money on things that were just about finding more new people to talk to, when what buyers really require is support for their buying process throughout all stages of buying.”
With his research showing that buyers use both marketing assets and sales assets throughout the entirety of their buying journey, he believes marketers who merely express their value based on what they found are missing 75% of the story.
Is Sourcing Spiraling Toward Irrelevance?
Relying on sourcing metrics — which reveal what percentage of pipeline or won revenue originated from a marketing interaction as opposed to having been found by sales or tele-functions — is a flawed concept, said Graber. Why? Because that first marketing interaction reflects only a small part of the story about the value that marketing creates.
A marketing-sourced pipeline has historically been considered a top indicator of performance, appearing on 70% of B2B CMO dashboards in 2015. But reliance on it decreased to 47% in 2020 in what Forrester called a “spiral downward toward irrelevance.”
By 2025, the research firm predicts only one in seven B2B businesses will count sourcing as a primary performance indicator for marketing.
“In 2021…B2B buyers told us that on average they completed 27 purchasing interactions before arriving at a successful purchase and the same study showed us that 60% of purchases involved groups of four or more buyers,” Graber said.
“In my view,” he explained, “it’s marketing’s role to support buyers through the entirety of the buying process — from discovery, through evaluation and commitment. It’s marketing’s job to support all members of the buying group throughout that process and it is marketing’s objective to help ensure that the business can successfully progress and close more deals for more revenue.”
For practical purposes, Graber said marketing should be offering up late-stage content — like a value calculator to work out the ROI of a purchase or a client case study highlighting the ease of implementation to help buyers justify decisions. Marketing teams can also facilitate experiences, such as inviting a prospect to a client forum to expose them to how customers engage with the vendor.
The important thing to keep in mind, he said, is that buyers want to rely on marketers and sellers throughout the buying process. And the part marketers have struggled with is being able to use numbers (metrics) to show that they’re helping in a justifiable way.
An Effective B2B CMO Dashboard
Each dashboard can be as different and unique as each business. The metrics implemented should provide insight into how an organization’s marketing efforts pay off in the areas the company has determined most important.
Despite the differences, Graber said there are some common areas that effective B2B CMO dashboards cover:
- How marketing contributes to the creation and progression of demand. Related metrics address marketing’s impact on opportunity volume, velocity and conversion. Demand typically makes up the largest focus area because it is most directly tied to revenue contribution.
- Progress in areas of reputation. This commonly involves metrics surrounding concepts of awareness, perception and preference.
- Engagement with existing customers and the enablement of interactions with buyers related to key needs and themes. Engagement metrics may address the volume of marketing engagement with existing customers, relating it to customer satisfaction, renewal rates or customer lifetime value. Enablement typically focuses on internal utilization of assets compared to successful selling results.
Related Article: Using B2B Marketing Strategies to Grow Your Business
We Have Lift Off
With a system of lift-based performance indicators, the goal is to show that when marketing engages with members of a buying group a certain number of times, the business experiences better revenue outcomes.
To determine that magic number, companies must do an analysis to learn how many interactions yield the optimal amount of revenue lift for their business. Marketers can then use this analysis to establish an engagement goal and begin to target that level of engagement with their buyers.
Graber provided an example where the engagement target was found at eight interactions.
Here’s how it works:
- A business may see that they win 20% of their opportunities with an average of $50,000 per win.
- But when marketing engages with buying group members over the course of a deal eight or more times, the win rate increases to 25%, and the deal size increases to $60,000.
- Those gains in deal sizes and win rates mean that any opportunities with eight marketing interactions result in 50% more revenue than would have been achieved had those opportunities simply performed at the segment average.
- Then, look to the active, in-progress pipeline and report on the percentage of the pipeline that has achieved eight marketing interactions. Engaging with more pipeline to this degree becomes a leading indicator of increased marketing contribution.
- At the end of the quarter, marketers report on the revenue lift seen in that quarter when marketing achieved a sufficient level of engagement. If the lift stays high, but more opportunities are engaged at that level, it will equate to revenue lift for the business.
In addition to being a great way to justify marketing’s investment levels, Graber said the best thing about lift-based metrics is that they change the conversation from “did marketing really do anything on this one specific deal” to “when marketing engages at the level we intend, it delivers x% more revenue.”
“That approach takes the focus away from looking at performance through the lens of one opportunity and instead makes it about what works across our market segment. That's a far more productive way to think about planning and resources,” Graber said.
“When marketing organizations move toward lift-based metrics they can focus on what’s doing the most to help their organizations win more revenue as opposed to focusing marketing investment on those things that will get marketers the most sourcing credit — and any time marketing’s performance is tightly aligned with business performance, that’s a win for everyone.”
A Different Perspective
Aaron Beashel, a B2B software-as-a-service (SaaS) marketing consultant and the co-founder of Simul Docs, a version control and collaboration tool for Microsoft Word, believes this new version of lift-based metrics makes sense.
“I’ve consulted customers who would agree that many purchases are attributed to the sales department when over the course of a year, marketing is actively involved, perhaps sending webinars and maybe they attended a webinar or two and are ultimately convinced to become a customer, but marketing doesn't get the attribution,” Beashel said.
He added, “If you're an organization selling $50,000 products with complex buying cycles that take six months and there are five people involved, using lift-based metrics is probably a really good strategy.”
However, he said, the vast majority of B2B businesses are not in that category. Rather, they are construction companies selling fencing to builders or software companies selling to a small business owner.
“The person who is buying office software is usually a business owner who is not having 27 touches before he buys it,” Beashel explained. “He Googles ‘best accounting software’ and decides one looks good, so he signs up for it.
“As a result, the lift-based approach is completely irrelevant because sourcing as a metric does work and there tends to be maybe one or two touches with the business before they actually sign up and become a customer.”
In addition, he said, implementing the technology to achieve the desired metrics would be expensive, requiring a team of people to run the software. In reality, however, most B2B businesses have a small staff with one-person marketing departments.
“In which case,” said Beashel, “this is all like crazy talk to them and ultimately all they need is to have some sort of simple thing that offers first touch attribution so they can see that the lead first came to them from their website, a Google ad, a Facebook ad or something like that.”
Still, he does see the benefits. “I'm not saying that this is wrong because I firmly believe this is actually a really interesting new way to measure attribution and I can understand the problems that they're talking about. It’s just very specific to organizations who have big deals and dollars to spend on headcount and technology.”
The Good News: A Clear Relationship
As Vice President of Growth & Performance Marketing for SAP Concur, a software development company focused on integrated travel, expense and invoice management solutions, Stephen Measelle said they are always looking for ways to more fully capture marketing's contribution to the business — and lift-based metrics have caught his attention.
He plans to incorporate lift analysis in an integrated digital campaign that includes content syndication, paid/organic social, pay-per-click and more. The campaign will target a specific audience of people who have visited the Concur page on G2Crowd. By zeroing in on this cohort, he hopes to understand the impact of successive marketing touches.
“Lift-based performance indicators give us a new way to understand marketing’s impact across all the touchpoints we invest in,” he said. “Lift-based indicators nicely complement more traditional sourcing and influencing metrics and given current trends in B2B buyer behavior of more contacts, more touches and longer incubation period, they’re especially relevant today.”
Measelle is also considering a study on client marketing lift and the concept of parsing large enterprise accounts more granularly.
“We will continue to watch these metrics and consider using them in the 2023 CMO scorecard,” Measelle said. “The good news is, we see a clear relationship between successive marketing touches and improvements in win rates and average deal sizes.”