The average tenure of a CMO is short. Spencer Stuart reports that average is just 44 months in large U.S. consumer brand companies. More detailed data from Korn Ferry indicates the mean tenure varies by industry, ranging from 3.6 years in consumer goods to 5.1 years in financial services, but averages about four years overall.
Why? According to Forbes, one primary reason is that “the ever-growing pressure to show measurable results is taking its toll on CMOs who are either unable to quantify the return on marketing investment or are unwilling to shift resources from long-term brand building to short-term campaigns with more measurable results.” The magazine also reports the average tenure for a CMO in the U.K. is even shorter than that of their U.S. counterparts, at just 18 months.
The short-termism in CMOs roles may be short-sighted (for example, encouraging CMOs to “drain the funnel” by focusing “on endlessly finding ways to use better technology to squeeze out more attribution for more sales, rather than replenish the sales funnel for future consumption”), but is unlikely to change until CMOs are able to maximize “the overlap between customer needs and company needs” per Forbes, as well as use data to communicate their value more effectively to their C-suite colleagues. That’s where analytics has to go beyond tactical metrics and last-click attribution.
Complex Sales Need Complex Metrics
First, it’s important to note the challenge varies by business model, particularly in B2B technology environments. If a company’s revenue model is based on a high volume of low-value online transactions with little or no sales involvement (email services providers and simple SaaS apps for example), then measuring CMO performance is simple.
Though that CMO may rely on a vast array of tactical metrics for optimizing marketing operations (ad click-through rates, landing page conversion test results, email offer open and click rates), he or she will ultimately be judged almost exclusively on two measures: sales growth against target, and return on marketing spend.
However, in environments where a direct sales force (or channel) sells high-value, complex products to enterprise buying teams, measuring marketing value is more nuanced. The correlation of marketing efforts to revenue is less direct, making ROI measures less precise. CMOs need a broader set of analytics, and to be able to articulate the value of these non-financial measures to the business.
A Model for Measurement
A basic model for reporting in B2B complex sale environments can be created by turning the traditional sales funnel on its side and combining it with the paid-owned shared-earned (POSE) model for content marketing. This also illustrates simply the digital marketing path from suspect to prospect to lead to customer to advocate:
At the top (or left) of the funnel are the four types of web presence in digital marketing. As in each stage of the funnel, marketing leaders will want to track a variety of tactical metrics (keyword rankings, ad performance, backlink quality and profile, etc.)—but for purposes of business reporting, “net out” results in each presence area.
This is the “pre-CRM” portion of the funnel; it’s about attracting unknown “suspects” and converting them, via various calls to action (download a white paper, register for a webinar, subscribe to our blog posts) into known, “post-CRM” prospects.
Paid Presence: Report on overall return on spend (cost per acquisition), trends (e.g., changes in overall click through rates), and competitive benchmarks. Performance data generally comes from the advertising platforms, while competitive intelligence may be collected with tools like SEMrush and WhatRunsWhere.
Website (Owned) Presence: Key metrics for reporting are trends in:
- Overall website traffic;
- Website traffic by source:
- Visitor engagement by traffic source; and
- Goal conversions by traffic source.
These can be pulled from Google Analytics, Omniture, or other web analytics packages. It’s also important to compare performance to competitors. Now that Compete.com has (sadly) closed its doors, SimilarWeb is probably the best tool for this.
Social (Shared) Presence: Vanity metrics come in for a lot of (deserved) bashing. The CEO doesn’t care how many Twitter followers or “likes” you get (specifically.) Yet these types of measures, signifying little in isolation, become meaningful when rolled up into a larger overview of social marketing success.
Meaningful social media marketing metrics include trends in:
- Social presence (total following across all social networks used);
- Social engagement (like, shares, retweets, brand mentions); and
- Social sentiment (changes in share that is positive / negative / neutral).
Wait—doesn’t lead generation matter? By all means track the number and share of goal conversions from social media marketing. Just bear in mind that for complex, high-value B2B products and services, the quantity of actual marketing-qualified leads (MQLs) generate through social media is likely to be quite small. Social media is more about brand building along with customer service and monitoring.
Again, competitive metrics are also important. These can be tracked using a social media monitoring tool such as Socialbakers, BrandWatch, or Mention, or a social competition tool like RivalIQ.
News (Earned) Presence: Report on trends (number of media mentions, web traffic and activity driven by news site referrals) along with competitive “share of voice” across industry, local, and business news sites as well as non-traditional industry influencers. Some of the social media monitoring tools can help here, as well as more specialized services like Cision or LexisNexis Newsdesk.
That’s a solid set of pre-CRM metrics. These can’t be precisely linked to revenue, but can be roughly tied by working backwards to determine how many web-generated prospects are required to generate each sale, plus an average dollar amount per sale. ROI can be calculated even (slightly) more accurately by using average customer lifetime value (CLV) rather than simply an initial sale figure.
This is the end of part one; part two of Proving Value for B2B CMOs will detail post-CRM metrics.