RV215 - Fixing Your Broken Marketing ROI | Go To Market Live Episode 32
Oct 4, 2024
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Explore the misconceptions around marketing ROI in the B2B space. Discover the importance of viewing ROI from a departmental perspective rather than just campaign level. Gain insights on creating a cohesive 'revenue factory' where departments collaborate effectively. Learn how to address inefficiencies in sales and marketing connections through improved data usage. Hear about the dangers of granular metric segmentation and the need for a unified strategy to optimize budget allocations for better overall business performance.
Measuring marketing ROI from a departmental perspective fosters a comprehensive understanding of investments contributing to overall business performance.
Reliance on first-touch attribution can lead to misguided strategies, making nuanced models essential for accurately assessing marketing's effectiveness.
Viewing the marketing and sales process as a cohesive revenue factory enhances collaboration and optimizes both lead quality and conversion rates.
Deep dives
Importance of Measuring Marketing ROI at the Department Level
Measuring marketing ROI should be done at the department level rather than at the program or channel level. This distinction is crucial because it allows for a broader understanding of how all investments contribute to the creation of pipeline and overall business performance. For instance, viewing ROI solely through the lens of direct response campaigns leads to misleading conclusions about the efficacy of brand marketing, which plays a vital role in long-term success. Understanding ROI on a departmental scale enables businesses to align their marketing strategies more effectively with overall goals, ultimately improving performance.
Misunderstanding Attribution Models
Many marketers erroneously equate attribution models with overall marketing effectiveness, leading to poor decision-making and investment strategies. For example, reliance on first-touch attribution can skew perceptions of marketing's value, often disincentivizing essential brand activities that do not yield immediate quantifiable results. Instead, custom diagnostics and more nuanced models should be used to understand specific aspects of the marketing funnel and the interconnected roles of various teams. Properly aligning attribution with key performance indicators establishes a clearer picture of marketing effectiveness across the entire revenue generation process.
The Revenue Factory Analogy
The concept of a revenue factory emphasizes the importance of looking at the entire marketing and sales process as an interconnected machine rather than isolated departments. This perspective enables organizations to understand how different functions impact overall efficiency and profitability. For instance, if a marketing team floods the pipeline with low-quality leads, it could create inefficiencies that affect sales performance downstream. Implementing a closed loop feedback system within the revenue factory framework allows teams to refine their processes collectively and continuously optimize to achieve better outcomes.
Aligning KPIs Across Departments
Establishing consistent key performance indicators (KPIs) across departments is essential for ensuring that all teams are working towards the same business objectives. When KPIs are misaligned, departments can engage in competitive behaviors that are detrimental to the organization's overall performance. For example, if marketing is incentivized solely based on the number of leads generated, they might prioritize quantity over quality, thus harming sales' ability to convert those leads. Adopting unified KPIs encourages collaboration and accountability, leading to improved alignment between marketing and sales efforts.
The Role of Executive Insight in Marketing Strategy
Executive-level understanding of marketing metrics is critical for informing strategic decision-making and resource allocation. Rather than relying solely on reports provided by departmental managers, executives should have access to comprehensive insights that encompass various aspects of performance and investment efficiency. This approach enables leaders to quickly identify underperforming areas and allocate resources more effectively to drive overall business success. Ultimately, executives need to facilitate a culture where data-driven insights lead to actionable strategies that enhance revenue growth.
In this week’s live event, Chris starts by discussing the misconceptions surrounding marketing ROI within the B2B space. He criticizes the conventional wisdom that overly focuses on attributing ROI at the campaign level and stresses the necessity of examining ROI from an entire department perspective. This shift, he argues, allows for more creative and impactful marketing strategies that align better with business-level outcomes.
Throughout the episode, Chris discusses real-world scenarios, including his consultation with a large SaaS company struggling with declining marketing efficiency. He emphasizes the importance of viewing the GTM strategy as a cohesive "revenue factory," where various departments work together harmoniously to drive core business metrics. He shares insights on diagnosing and resolving inefficiencies by using data smarter, stressing the dangers of being too granular with metric segmentation and the flaws of the four-funnel model that many companies adopt.
If you want to have a conversation with Chris and present your current questions, roadblocks, or projects you’re working through, make sure to attend this weekly event every Tuesday at 12 central. Register here.
Can’t make the event but have a question for Chris? Submit it here.
Thanks to our friends at Hatch for producing this episode. Get unlimited podcast editing at www.hatch.fm
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