Performance Marketing May 23, 2017
41% of Marketers Don’t Track ROI of Activities
According to Hubspot’s State of Inbound 2017 report, 70% of marketers state that ‘converting leads to customers’ is a top priority for their company. However, the cost of doing so does not feature so high, with only 39% saying ‘proving the ROI of marketing activities’ is a priority.
What are your company’s top marketing priorities over the next 12 months?
1. 70% = converting contracts / leads to customers
2. 55% = growing traffic to website
3. 45% = increasing revenue derived from existing customers
4. 39% = proving ROI of marketing activities
5. 29% = sales enablement
6. 24% = reducing cost of contacts / leads/ customer acquistion
7. 2% = don’t know / NA
Whilst it may appear that chasing a conversion regardless of cost is counter-intuitive (what’s the point if it’s delivering a negative ROI?), the fact that 45% stated that ‘increasing revenue derived from existing customers’ was a top priority might go part-way to explain.
If long term revenue is generated by marketing via cross-sell, up-sell and increased loyalty, the transparency of ROI becomes slightly mistier. At what point should you track ROI? At the point of conversion to Marketing Qualified lead or to sale? Or should you track it against invoiced revenue within a given financial year? On top of that, there’s the ongoing challenge of attributing revenue to any one given marketing source.
41% Can’t Track ROI…seriously
Worryingly, 41% of respondents were unable to calculate or didn’t know the ROI of their marketing activities. As Hubspot rightly points out, this “will be a hindrance for marketing teams trying to prove their value or advocate for higher budgets”. Of those who could track ROI, 46% cited inbound marketing as providing a higher ROI, versus 12% stating outbound.
Which Marketing approach has given your organization higher ROI: Inbound or Outbound marketing?
Sales & Marketing Kinship
When it comes to the internal marketing relationship with sales, it’s certainly heading in a positive direction. 22% of respondents indicated that the two departments were ‘tightly’ aligned, and 44% said they were ‘generally’ aligned.
The data also demonstrates that in organisations where sales and marketing are tightly aligned, the leads from marketing are a top source. Marketing leads featured much lower in organisations whose marketing and sales teams were ‘generally’, ‘rarely’ and misaligned.
BASED ON HOW YOU CHARACTERISE YOUR COMPANY’S SALES AND MARKETING RELATIONSHIP, WHICH IS THE TOP SOURCE OF LEADS FOR YOUR SALES ORGANISATION?
If increasing sales conversion is the top priority, it does not make sense for organisations to have disparate sales and marketing departments. If there is no communication between sales and marketing, how can activities be aligned to support and address the needs of prospects? Surely marketing teams are shooting blind without the insight sales can bring and vice versa?
Interestingly, despite indications that the majority of respondent’s organisations are working on sales and marketing alignment, there is still a battle over who delivers the best leads.
WHICH SOURCE PROVIDES THE HIGHEST QUALITY LEADS FOR YOU SALES TEAM?
59% of marketers said that their inbound practices generated the highest quality leads in comparison to 26% who said self-sourced leads from sales were best. However, when sales were asked the top source of sales, leads from marketing failed in comparison to sales-sourced and referrals. Sales’s assessment of marketing-sourced leads has also dropped 8%, indicating that sales believe they can generate much better leads than marketing.
WHICH IS THE TOP SOURCE OF SALES FOR YOUR SALES ORGANISATION?
As Hubspot says, “this is a perception and trust issue for marketing leaders to address”. One of the most powerful ways to do so, is to ensure marketing is tracking the right KPIs. For example, 55% of marketers said that ‘growing traffic to the website’ was a top priority. Increasing traffic is a very fluffy KPI – stick ‘Justin Bieber’ in the title of your blog article and you could see traffic increase exponentially, but unless your key prospects are Beliebers, that traffic is utterly useless. This won’t do anything to help persuade your sales team that you are generating quality leads.
If marketing hasn’t got a seat at your top table yet, then convincing C-Level that your marketing budget is justified (and negotiating an increase), can be a painful process. However, if you are tracking the ROI of your activities, it becomes far easier (and also gives you impetus to combat the negative perception your sales team has of Marketing leads).
On a positive note, the focus on sales in this report is positive for marketers, as it appears that Marketing may have finally turned the corner of simply being considered an overhead, and instead is proving its ability to positively impact the bottom line. The key of keeping it this way, is to keep tight reigns on that ROI…