Before the advent of technology, the role of marketing was straightforward. It was essentially to own the brand, messaging and communication of their business, focusing on brochures, events and the general "look and feel" of their organisation. Pre-martech, Marketing sat predominantly at the ‘top of the funnel’.
After the explosion of the internet, and with that digital marketing and marketing technology itself, everything changed. There was a huge shift in the buying behaviour of consumers as they began to ‘self-serve’ much of that buying process. Whereas before a customer would interact with Sales if they wanted to learn more about a product, now much of the research and education is completed online. This meant that the role of marketing had to fundamentally change, taking on responsibility for far more of the customer journey than before.
Essentially, Marketing has always struggled to directly quantify marketing success. Marketing technology has alleviated this pain somewhat, but the fact of the matter is that the process and people need to catch up with the capabilities of the technology at their disposal.
The age of fully comprehensive Customer Data Platforms (CDP’s), integrated CRM’s and seamless data transitions is here, but a lot of marketers simply just haven’t got the skills to utilise this effectively, and the fallout is that stakeholder buy in for a lot of businesses for the very tech that can explain marketing value is poor, as well as stakeholder belief in the marketing department itself.
Too many marketers measure MROI by looking at campaign metrics and performance only. This is important, but it is rather tactical. Campaign reporting can tell you how a campaign is performing, but it isn’t really MROI in the business sense. MROI essentially exists to:
- Justify Marketing Spend
Prove the direct fiscal return on investment of marketing initiatives.
- Decide what’s profitable
Directly identify what’s successful in marketing campaigns and what isn’t.
- Hold Marketing Accountable
To attribute marketing responsibility where marketing should be responsible. This can be hard to define without robust data process, but the capabilities of the martech available can easily meet this challenge if utilised properly.
Examples of MROI reporting are:
Marketing Dashboards (for Marketing only):
These predominantly consist of "vanity metrics", data such as click through's, open rates, social followers, and social engagement.
Whilst these metrics are important for Marketing to understand customer engagement and where to make tactical improvements, the rest of the business frankly don’t care. Marketing departments who are only reporting at this level are seen as irrelevant. Other departments want to see the business outcomes from marketing expenditure, not vanity metrics.
Reports here move beyond vanity metrics that only Marketing should be concerned about to analysing stats that other departments, such as Sales and Customer Success need to see.
This consists of metrics such as the performance of the Sales and Marketing funnel, leads generated, velocity of pipeline and specific Sales insight into a given customer or account. These metrics are much more beneficial.
Marketing Performance Management (MPM) takes this one step further – does an investment:
- Make and save the organisation money
This is more of a holistic analysis of the whole marketing function, rather than specific initiatives. Has marketing output increased the number of opportunities for Sales, and are the quality of those leads good enough for Sales to fully take advantage of? Are those leads generated by marketing, converting into tangible revenue streams, or are they more often than not being returned to marketing?
- Provide a degree of insight and intelligence that wasn’t available before now but is now a competitive advantage
According to Gartner, customers are on average now self-serving 57% of the buying process. As a result, the question to ask is does the marketing function make this customer journey easier, informing the prospective clients with the requisite information for Sales to effectively pick up the remaining 43%, all ultimately saving your organisation time, and increasing the possibility of success.
An example of MPM reporting would be Marketing Performance Reporting for the C-suite.
These reports are to showcase the true value of the Marketing department. The C-suite want to see a holistic view of Marketing’s financial contribution; efficiency savings, cost savings, revenue generation and Marketing’s impact on improving other departments such as Sales and Customer Success.
In order to be successful, you must align your team culture, objectives, campaign activity and so on. While setups differ for each organisation, there are common traits within each industry type. To find out more about MROI, MPM and everything in between, download our report.