Are you curious what marketing directors in B2B are measuring nowadays? How does it compare to what your organization is measuring? Forrester recently completed its SiriusDecisions 2020 metrics study and outlined answers to both questions. Forrester’s study examined the metrics used by B2B executives to manage performance. Instead of asking executives for their opinion on which metrics they think are most important or available when needed, we simply asked B2B executives around the world which metrics are shown in their company’s top-level dashboards. Here we will focus on the data that is collected in the top-level marketing dashboards, often referred to as the CMO dashboard. The results say some critical things about the state of B2B marketing today:
- Leadership attention is valuable. While marketing’s potential to make an impact feels limitless, the attention of the executive audience has its limits. On average, Marketing Leadership Dashboards contain eight metrics for consistent review. This limited number underscores the need to stick to a set of clear metrics that summarize the value of marketing, rather than investing time researching interesting – but less consistent – details. It is a balancing act to choose metrics that are comprehensive, yet meaningful. So prioritize metrics that highlight marketing performance over key growth strategies.
- The procurement figures continue to dominate. The two most common metrics that B2B marketing organizations focus on are Marketing Sources Revenue and Marketing Sources Pipeline. They appear in 35% and 32% of the dashboards for B2B marketing leaders, respectively. At least one of these two metrics is shown in 48% of marketing leadership dashboards. This confirms that marketing organizations spend much of their energy using their ability to create new business opportunities for the organization. However, sourcing is not well aligned with many of the go-to-market strategies that B2B companies pursue. Success with retention, account enhancement, and account-based marketing programs are all poorly reflected in procurement figures. Combined with our observation that sourcing rates continue to decline across the industry, this finding shows that marketing leaders need to quickly diversify the metrics they use in order to more fully understand the contribution of their role.
- CMOs don’t care about lead metrics When reporting to executives, less than a quarter of companies focus on lead volume and conversion rates. This is a good sign that most companies are focusing on more effective dimensions of their marketing performance. However, the fact that these metrics are in the top 10 metrics for B2B companies does matter. What is noticeable is that for companies with high sales growth (> 10% per year), the lead metrics have dropped out of the top 10. Companies with higher growth focus less on reporting leads and more on larger performance indicators. It’s a lesson more businesses should take to heart.
- High-growth companies focus more on the customer lifecycle. Low growth companies (which increase their annual sales by less than 5%) place great value on measuring the demand mechanics. However, high-growth companies (that increase annual sales by 10% or more) are more diversified in the metrics they choose. High-growth companies do better work by incorporating metrics that describe the value created during the customer lifecycle (e.g., customer retention rates, customer lifetime value, customer satisfaction, and customer representation). It should come as no surprise that companies that focus more on better customer results are the most successful.
- Top performers pay attention to cost efficiency. One thing that stands out is the difference between the likelihood of high and low performing top performers using cost efficiency metrics. Customer acquisition costs and demand generation efficiency costs were used in 27% and 23%, respectively, of CMO dashboards at high performing companies. Yet only 5% and 9% of their low-growth colleagues monitored these metrics. This reinforces the need for marketing organizations to emphasize how well they are using the resources their organizations entrust to them – if they are to make a responsible contribution to growth.
When we look at what B2B marketing leaders are measuring, we get a clear view of what those leaders value. By comparing the differences between high-growth and low-growth companies, we can get some clues as to which focus areas are more likely to be associated with stronger performance. However, some things still stand out. Companies that tailor their metrics to summarize the impact marketing has on buyer and customer results are the ones who position their businesses for success.
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This post was written by VP and Principal Analyst Ross Graber and originally appeared here.