How do you manage the performance of marketing?
There are competing (and incorrect) definitions of Marketing Performance, so let’s level set on what I’m referring to:
Marketing Performance is marketing’s results or output compared against its set of objectives.
Marketers often fail to understand the layers and inputs that go into optimizing their team’s performance. Instead, they defer to shortcuts or arbitrary measurements, putting them at risk of hurting performance, losing budget, wasting, resources, and diminishing their internal authority. Poor Marketing Performance Management (MPM) makes it more difficult to meet the demands of your role.
There is a massive opportunity for those organizations that cognizantly take on Marketing Performance as more than just arbitrary measurements.
My team at Allocadia recently conducted an empirical study into the state of MPM – surveying over 200 marketers to benchmark how companies are running the business of marketing.
We found four traits of high-growth B2B companies with mature Marketing Performance
- They ensure strong visibility into data for reporting
Our study found that high-growth companies can consistently prove Marketing’s contribution to the business due to strong levels of visibility and reporting data enabling consistent, targeted measurements.
Leaders in this area ensure that Marketing is in lock-step with company objectives.
Companies expecting more than 25% revenue growth are 2X as likely to have CMO-level reports showing marketing contribution to the business as those companies expecting flat to negative growth.
These high-performing organizations also demonstrate a common definition and approach to measurement. When surveyed on this topic, 80% of organizations expecting flat to negative growth report they either have no agreed-upon approach or are only capable of baseline measurements.
- They integrate technology and set a clear MarTech roadmap
Companies who manage the business of marketing expect budget and revenue increases. These organizations have a much stronger approach to their overall marketing technology stack and tech strategy.
In our study, there was a clear trend within these high-growth firms of ensuring the entire marketing organization, all geographies and business units, uses the same technologies.
~60% of companies who expect budget increases over 10% report their use of marketing technology across the organizations to be always or often consistent. 36% of those companies expecting at to negative budget report inconsistency in their marketing technology and only 39% report having high consistency
In addition, a defined roadmap for MarTech is an indicator of successful organizations. 70% of companies that expect revenue increases stated they have good or excellent clarity of their roadmap, versus 27% of those with flat to negative revenue growth expectations.
- They lead in data cleanliness
Data cleanliness is clearly an area that the most mature organizations are further advanced in and less mature organizations greatly struggle with. When asked about the state of their marketing data, 93% of Static and Transitional (the least mature) organizations report their data is either not useful or they have just begun cleaning and reformatting it and 33% of those report their data is not useful at all.
In contrast, 100% of the most mature companies, those within the Proactive and Optimized stages, report they are able to see some value from their data.
Only 8% of organizations can confidently say they keep marketing, sales and finance data in one data warehouse that acts as a “single source of truth.” What’s more, only 29% of marketing organizations have data such as MAP and CRM information in a single BI tool, warehouse, or data lake. Conversely, almost 50% of organizations report not having control of their data.
- They align Marketing with Finance and the rest of the business
Leading Marketing organizations are 3X more likely to align with Finance, but only 14% of Marketing organizations overall see Finance as a trusted strategic partner, and 28% either have no relationship with finance or speak only when forced to.
If the CFO sees marketing as a strategic lever, Marketing will have more power, more flexibility, and a stronger voice. If the CFO sees marketing as a cost center, expect to be fighting against budget cuts rather than for budget increases.
Marketing organizations that expect larger revenue growth report significantly better alignment. 61% of companies expecting 25%+ growth report consistent (often or always) alignment with finance on the measurement of budgets and returns.
Those expecting at to negative growth report the same only 27% of the time. Furthering this point, 40% of companies experiencing at to negative growth say they are rarely or not at all consistent with finance in their reporting. Only 17% of those companies expecting 25%+ revenue growth report poor consistency.
These leaders also ensure Marketing is in lock-step with the rest of the business. Companies expecting revenue increases are 2-2.5X more likely than underperforming organizations to have marketing and sales data that is always or often consistent and aligned to the company’s overall objectives.
Marketing must now look at their organization more like a business and no longer a function. In short, they must make every dollar count to maximize their team’s performance and prove their impact. Leaders that succeed at this enjoy added power, confidence and the trust of the entire company. Those who fall short will be delegated to the second row: taking orders and executing, rather than strategizing and leading.