The Narrative behind Measuring Marketing Performance
In an uncertain economic environment, the question of business value is paramount. Marketing is a revenue generating activity. The most successful CMOs are measured on pipeline delivered as well as leads generated. However, not everything marketing does has an easy to measure revenue contribution. Brand awareness is an obvious example of this, but it applies to demand generation activities too. For many campaigns, business value comes from influencing existing opportunities rather than sourcing new ones. Whether it’s through increased deal sizes or accelerated close dates, marketing can have a significant impact on the outcome of sales-sourced deals as well as on marketing-sourced opportunities.
Yet the moment the sales pipeline starts to look empty, leadership focuses on lead generation to the exclusion of everything else. There will be revenue targets to meet and KPIs to hit. It doesn’t matter how the CMO is measured. Too many senior leadership teams only care about how marketing can deliver a full pipeline of new leads for sales. The broader benefits of marketing are forgotten. It then falls onto the CMO to present the complete picture of marketing’s contribution to the bottom line. However, the marketing language of MQLs and SQOs is rarely understood by the business. It is the CMO’s job to translate those metrics into a language the typical board member does understand.
The task of selling marketing to the business is about far more than numbers though. It is ultimately about interpreting those numbers to maximise the business value of marketing. A good CMO will tell a narrative of how marketing is enhancing business performance, all backed by the data and metrics delivered to them by marketing operations. They will highlight the numbers that show the highest business impact and provide explanations if there is a significant underperformance. When it comes to reporting, choosing the best metrics to present is just as important as calculating accurate figures.
All this requires the CMO to have the right numbers available to sell their performance in a way that benefits the wider marketing team. Although, the CMO is not solely responsible for interpreting reports, just as data analysts are not solely responsible for building accurate dashboards. Both accuracy and narrative are a shared responsibility. A strong data analyst can play an active role in crafting the narrative, even if their most important job is to keep everyone honest.
In a data-driven business, reporting on past performance is used to improve future outcomes. Decisions need to be made based on the actual numbers, both good and bad. All the metrics presented right across the business have to be accurate. As such, it is vital that everyone challenges the spin and avoids misinterpreting the data. Inaccurate numbers and invented narratives always get exposed eventually. Narrative is important in providing context around the results, but only if it matches the real-world reasons for campaign performance.
Marketing operations has a critical role in finding the right numbers, in both senses of the term. A successful marketing operations team isn’t just reporting on the KPIs set by others. Instead, they’re actively defining what can be measured, and deciding which KPIs make sense for the business. No one else has visibility of all the available data in the enterprise, nor can anyone else provide an end-to-end view of marketing performance in a single suite of dashboards.
Many dashboards try to do too much, combining numerous unrelated attributes into a single view to aid discovery. All too often, this overwhelms users, confusing them with lots of graphs and filters they don’t understand. Clarity and consistency are critical. The design must start from the perspective of the person consuming the dashboard. Consider the questions they intend to answer as well as the stories their users want to tell. Then work back from that to the specific attributes, layouts and filters needed to meet that requirement.
Reports are much more impactful if they are focused on a small set of related metrics that can be combined into a single narrative. However, no dashboard should ever attempt to spin the metrics. That needs to be added afterwards when the numbers are presented to the business. For the business to succeed, it is essential that marketers can separate the narrative from the cold hard facts.