Many marketers are now being forced to produce business justification cases for each marketing program they plan to execute. We see it every time there is a new project that they are interested in running. Specifically we see some clients that have moved away from branding and multi touch projects that may not generate strong ROI to moving to much more return on investment. One of our clients is even looking at his budget (less than $50,000) to generate pipeline opportunities out of the gate that represent $3M in potential new revenue based upon 70% of the leads generated to the program moving to a $300,000 average pipeline value. That creates some steep expectations on what the outcomes should reflect for the sales team.
We think this is justified in many instances and very relevant in light of how slow marketing budgets appear to be increasing. Why would we expect budgets to increase when the ROI has not been there so the natural cause and effect is too raise higher expectations with what you are now afforded in the budget. According to Forrester they reported earlier this year that budgets will rise by 4% in 2014 however the report also detailed that marketing spend as a percentage of revenue was still down from pre-recession levels.
“The report, conducted in conjunction with the Business Marketing Association (BMA), found that marketing budgets will eek back up to 4% of company revenue in 2014. That’s still less than the 5% to 10% many companies had in place before the 2008 recession, but an improvement over the 2.5% Forrester reported two years ago.
“Business is just tightening its belt all around,” said Forrester VP and senior analyst Laura Ramos. “You have to really prove that you’re going to return value to the business to get more budget money.”
So, we asked ourselves how do you prove that you’re going to return value when so many marketing efforts are content focused or more importantly focused on generating little tangible value or next steps that are definable? More than ever marketers should be requesting detailed reporting, ROI calculations and actionable next steps from their vendors. A recent Aberdeen report predicts that marketers will be investing in marketing automation and other technology toward this end.
“An emphasis on accountability and smart spending will lead to bigger bets on marketing technology in 2014, Ms. Ramos said. According to the report, 61% of marketers “expect to increase the proportion of technology spend versus marketing communication/program spend”
What flies in the face of the Aberdeen report around technology spend is how do you translate that to show proven value?
Obviously within marketing automation software reporting is readily available, including dashboards that show activity. And activity can be that a recipient merely clicked on a form that increased his lead score without even considering the specific responses, just that they opened or completed a form. Activity, we think, rarely results in immediate proven ROI; instead it’s more of a branding move that generates lots of work for what typically turn out to be relatively few real opportunities.
And, while these systems report on activity metrics and returns, determining the timeframe for measurement is a fascinating dilemma. Do you send 10 email blasts and wait 10 months to evaluate the proven value to the business? Can you really track that 5 touches resulted in more business from the customer?
We encourage our marketing clients to implement proven tactics that give tangible results that are built on accountable financial models and contracts. Think about appointment setting, for example, that provides for shared risk or 100% pay-for-performance models where most all risk is assumed by your vendor.
Imagine the next time you are building a presentation for your VP of Sales, CEO or CMO and you could highlight the 20 logos your marketing campaign set up for face-to-face meetings. Imagine you could show that you met with real people, with real titles and real needs for this amount of real money. That is the power of proven marketing tactics that if done correctly can continue to produce the results we all want and return value to our businesses.