Three Types of Marketing Key Performance Indicators for Success

Introduction

We’ve been hearing it for some time

now—marketers need to earn a seat at

the revenue table. But how do you go

about doing that? It all comes down to

proving—and improving—marketing’s

contribution to the bottom line using

metrics that matter.

For too long, marketing has been seen

as a cost center. And it’s not hard to

see why—marketers have traditionally

struggled to quantify the return on their

marketing spend. It’s no wonder, when

they have been focused on metrics that

undermine their credibility in the eyes

of executives. We’re talking about vanity

metrics such as Facebook Likes and the

number of Twitter followers that sound

impressive but don’t measure the impact

of revenue on profitability.

We also mean activity metrics that

measure what you do—such as record

webinars, write blog posts and run

campaigns—instead of the result and

impact of those activities. We are also

referring to metrics that frame marketing

in terms of costs instead of outcomes

and revenue contribution. If you report

on your cost-per-lead, for example,

you’ll only be asked to reduce that cost

over time.

If you can’t pin down the revenues your marketing initiatives and programs are driving, how can you make smart decisions about future spend?

2 // THE 3 TYPES OF KEY PERFORMANCE INDICATORS FOR SUCCESS

Monitor Success with the Right Measurement Tool

To elevate your status and value in the

organization, you need to measure Key

Performance Indicators (KPIs). A KPI is

any measure of an activity for a marketing

or business initiative that allows you to

understand the ROI of your activities. This

refers to the programs, messaging and

content you create and share using your

marketing automation platform.

KPIs are important because they

demonstrate how marketing impacts the

business. They indicate both progress

and challenges, and provide a benchmark

so marketers can continually evolve and

improve their efforts. By using a proper

mix of tactical, strategic and operational

KPIs, marketing can quickly and

emphatically evolve into a revenue center

and earn a seat at the executive table.

KPIs allow a better understanding of where to allocate marketing budget based on where you’ve realized success—or failure—to date.


Tactical KPIs are the Best for Channels

These metrics are relevant and valuable

for marketers to understand how well

they are performing in a specific channel,

such as email, mobile, social, and the

web. Measurement usually centers

around buyer behaviors, such as opens,

clicks, page visits, content downloads,

and form submissions. In addition to

understanding performance by channel,

marketers, such as the Director of Email

Marketing, the Manager of Social Media,

and Director of Mobile Messaging can

identify how to optimize their programs

and initiatives going forward.

Tactical reports are usually generated on

an ad-hoc basis, after a certain program

is deployed, such as an email campaign

or new tab on a social media page. For

most marketing teams, this translates into

weekly or monthly reports like the one on

the following page.


Tactical KPIs are best for channels

Figure 1. A tactical report measuring email performance

Email Name

Top Ten BestPractice Lead Mgmt

Landing PageeBook

45

1

41

1

29

0

48.8%

0.0%

12

0

29.3% 60.0% 0 0.0%

0 0.0%0.0%

Leads SentLeads

DeliveredLeads

Opened % Opened Leads ClickedEmail

% ClickedEmailed

Clicked to Opened Ratio

LeadsUnsubscribed

%Unsubscribed

Lead Nurture WP

Blind Date LeadNurturing WP fulfill

89

141

87

130

59

65

67.8%

50.0%

75

90

86.2% 127.1% 0 0.0%

138.5% 0 0.0%69.2%

Lead Scoring WPfulfill

Best Practices LeadNurture WDFM fulfill

179

69

163

64

112

43

68.7%

67.2%

140

48

85.9% 125.0% 0 0.0%

111.6% 0 0.0%75.0%

Lead NurturingWDFM follow-up

B2B Lead MgmteBook fulfill

78

14

68

14

34

7

50.0%

50.0%

19

8

27.9% 55.5% 0 0.0%

114.3% 0 0.0%57.1%

Freetrial Followup 145 157 65 41.4% 2 1.3% 3.1% 1 0.0%


Strategic KPIs Empower Executives

Because tactical KPIs do not typically

provide a level of detail that the CMO and

other executives care about, marketing

teams should also track strategic KPIs.

These KPIs are typically focused on results

rather than buyer behaviors. In other

words, they help determine marketing

performance in general versus measure

specific behaviors like opens and clicks.

For instance, strategic KPIs can provide

insight into how many new opportunities

were created as the result of combined

email programs over a recent time frame.

Or how much additional pipeline was

driven by marketing, how many of those

opportunities closed, and in turn, how

much was generated in revenues.

These KPIs can also help quantify the ROI

associated with incremental pipeline, or

how marketing is impacting up-sells and

cross-sells, for example. The likes

of Directors of Digital Marketing and VPs

of Demand Generation, and sales and

marketing, are the ones most interested

in these measurements. While a Director

may want to see these reports on a

weekly basis, a VP may choose to

review them on a monthly or quarterly

basis, while the CMO may only look at

them annually.



In this strategic report, you can

see lead sources across multiple

channels, including which channels are

garnering the most leads, the number of

leads converting to opportunities, and the

amount of time for that conversion. Such

a report illustrates, for instance, how the

VP of Digital Marketing is performing.


Lead Source

Trade Show-Virtual

Trade Show

Online Ad

Website

Sponsorship

TeleProspecting

Webinar

Sales Outbound

User List Upload

List Purchase

42683

30930

30717

18167

17926

15977

8828

8114

7919

6849

0.48%

1.32%

0.65%

5.72%

0.60%

0.15%

0.23%

10.12%

1.09%

0.44%

243

210

255

101

322

217

75

134

166

267

207

408

199

1040

107

24

20

821

86

30

Number of LeadsLead to Opportunity

Conversion RatioAvg Days to ConvertLead to Opportunity

Number of Leads(Converted to Opportunity)

Figure 2. A strategic report measuring top-performing lead sources


Another strategic report in Marketo, called Program Analyzer, allows you to evaluate

all channels in a single spot. For example, you can determine which channels are

generating revenues, see pipeline creation, and more. Plus, you can drill down to

understand the programs behind these results.


RECOMMENDED STRATEGIC REPORTS

• Number of new inquiries

• Number of active leads

• Leads per lead stage

• Success path acceleration

• Number of touches to conversion

• Last touch to conversion

• Pipeline generated

• Revenue generated

• Campaign ROI

• Program analyzer

• Success path analyzer

Figure 3. Marketo Program Analyzer report



Operational KPIs Get Everyone in Sync

Operational KPIs are typically indicators

for how well—or poorly—your cross-

functional teams are aligned and help

pinpoint bottlenecks in the sales funnel.

An example of an operational report

is one showing the quality of leads

generated by marketing and passed to

sales. We call this a “kickback report”.

This report shows the number of leads

rejected by sales and the reasons for

those rejections. With this information in

hand, the organization can understand if it

is generating the right types of leads and,

if not, what needs to change to connect

with the target audience. Specifically, a VP

of Commercial Operations and the CMO

can better align teams and accelerate

lead and opportunity throughput.

While operational KPI reports can be

generated on a monthly or weekly

basis, they are most often produced in

support of quarterly and annual planning

meetings and performance reviews. The

focus is on understanding performance

to date and how the organization can

improve going forward.


The sample Success Path Analyzer report from Marketo in Figure 4 shows where new

leads are injected into the funnel, where they are leaking out, and where the handshake

between marketing and sales is less than optimal. With this insight, executives can best

determine how to improve conversion rates and funnel throughout velocity.


Operational KPIs help those with a vested interest in cross-functional teams understand operational improvements that can lead to higher revenues.

Figure 4. Marketo Success Path Analyzer report


Operational KPIs Get Everyone in Sync

Conclusion: Earn Your Seat at the Table

If you collect traditional marketing

metrics to support your decision-making,

you may very well be setting yourself

up to remain on the periphery of your

organization. Most of these metrics are

meaningless to key stakeholders because

they don’t tie directly to revenues.

To gain a seat at the revenue table, track

tactical, strategic and operational metrics

that help you connect the dots between

marketing programs and tactics and

your contribution to the top line. In other

words, speak the language of business

using metrics that matter.


Marketo (NASDAQ: MKTO) provides the leading marketing software and solutions designed to help marketers master the art and science of digital marketing. Through a unique combination of innovation and expertise, Marketo is focused solely on helping marketers keep pace in an ever-changing digital world. Spanning today’s digital, social, mobile and offline channels, Marketo’s Engagement Marketing Platform powers a set of breakthrough applications to help marketers tackle all aspects of digital marketing from the planning and orchestration of marketing activities to the delivery of personalized interactions that can be optimized in real-time. Marketo’s applications are known for their ease-of-use, and are complemented by the Marketing Nation®, a thriving network of 400 third-party solutions through our LaunchPoint® ecosystem and over 50,000 marketers who share and learn from each other to grow their collective marketing expertise. The result for modern marketers is unprecedented agility and superior results. Headquartered in San Mateo, CA with offices in Europe, Australia and Japan, Marketo serves as a strategic marketing partner to more than 3,400 large enterprises and fast-growing small companies across a wide variety of industries. For more information, visit marketo.com.

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Three Types of Marketing Key Performance Indicators for Success