Marketing

Return On Marketing Investment: Why is it so hard to prove?

We speak with senior business-to-business (B2B) marketers on a regular basis and one of the big issues that we repeatedly hear from them is around proving the return on marketing investment (ROMI). Essentially, these are experienced, high level professionals who are desperate to demonstrate that their efforts are materially moving the needle - that they and their team are doing a valuable and important job.

Some history

When I first started out in my career (over 20 years ago now!), I worked in B2B sales. There was a marketing department, but its function in the early days was largely limited to printed literature and branding. Email was just getting going and websites were still quite new and often limited to putting online what was said in the printed literature.

As a sales person, I had complete responsibility for the acquisition and maintenance of clients. From researching prospects and cold calling (face-to-face or by phone), to account management and obtaining repeat business, it all fell to sales. My time was really valuable to me and I soon learned that I needed to pick and choose my prospects carefully and focus my relationship building on those clients who were most likely to generate the business I needed to earn bonuses.

This situation was not untypical of B2B at the time. While retail and consumer marketing (B2C) has always been about the big brands and big advertising spends, B2B has generally been much more about face-to-face relationship building (sales/account management). B2B marketing has been viewed as the ‘poor relation’, with limited budgets and other parts of their own business wondering just what it is they actually do.

What has changed?

Fast-forward to the present and recent studies showing that anything up to 70%* of the B2B research/decision making process is made before the buyer even talks to the selling organisation. B2B buyers are now following the same process in their business purchasing that they do in their personal shopping. Using the internet to research and select, they are still looking for recommendations and introductions, but these are much more likely to be online than offline. A further challenge is that with many of the purchases, multiple people in an organisation will have a say in the decision. Purchase influencers can be at all levels within a business and who they are is not always obvious.

So marketing needs to take on more and more of what has traditionally been seen as ‘sales’.

CTR’s, CPC’s, impressions and views

Unsurprisingly, a huge number of measures and metrics have sprung up in the world of digital marketing. The question is, how valuable are these? To the marketing department, many of these measures can be a useful way of comparing the success (or failure) of different online campaign activities. But outside the marketing department…? 

The majority of present day CEOs in large B2B organisations have forged their careers through this changing technology landscape. So, unless they have a marketing background, they are interested in closed sales, profits, the bottom line… and advert clicks do not equal a sale.

Online technology has also driven B2B activity towards quantity being more important than quality, in other words doing B2C style marketing on a B2B budget and everyone wondering why the ‘leads’ generated don’t seem to immediately convert to sales.

Are salespeople needed anymore?

Most definitely yes! The role may have changed, but in the final purchasing stages and once a customer is on board, they will still want a person with whom to hold account reviews and move the relationship forward. After all, it is still a relationship.

A good example of this was in a recent discussion with one of our SME high growth clients. After testing various approaches, the decision was made that marketing was responsible for new client acquisition and that once on board their customer management team became fully responsible.

So what is the solution?

A key thing to understand is that the actual steps to a successful sale and long term client relationship haven’t changed. How those steps are completed and who completes them can be very different.

Quality not quantity

Big numbers all look very nice, but they can cost a lot of resources to achieve and don’t necessarily deliver results. Choose and select prospective clients with care and focus all the energy on them. My research was thumbing through the yellow pages and driving round industrial estates. Now there are vast resources available to find out about prospective clients.

Collaboration not competition

In my view, the route to success is sales and marketing working closely together to identify and secure long lasting and productive relationships with customers.

For example, here at Webstars we don’t have a separate sales department, we use Account Based Marketing, selecting our prospects and then using a combination of carefully targeted approaches over a period of time.

Clearly defined outcomes

Goals and objectives are needed along with a clear understanding of who is responsible for what. The not so old days of Marketing creating leads and Sales closing the deals, need to actually become the old days. 

Set aside the debates over ‘what is a lead?’ and ‘who owns the customer?’. Focus on ‘What does success look like?’ and ‘How do we best deploy our respective skills to achieve it?’.

Once goals are set, it is then a matter of working backwards to identify so called ‘lagging’ and ‘leading’ indicators. These are metrics that can be used to show how far you are along that all important journey to results and what might need changing or tweaking to achieve it.

In a high pressure, high target environment, often with lots of internal competition, this can sound like mission impossible. But we have seen it happen and it does work.

 

*Source https://spotio.com/blog/sales-statistics/#b2b

B2B buyers are 57%-70% through buying research before contacting sales.

 

 

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