Metrics That Matter

Metrics That Matter:from The Annuitas Group by Erika Goldwater
Demand programs strategized? Check. Marketing automation optimized? Check. Lead scoring model established, service level agreements in place, integration fine tuned? Check, check, check. Now we can sit in the break room and enjoy some wasabi peas and Mr. Pibb Zero as we watch the revenue roll in, right? WRONG.
Demand Process Transformation^SM is a lot of work and the work continues even after you think you have your task list completed. It’s not a one and done process because sadly,  ‘one size doesn’t fit all’.  The key to revenue improvement through Demand Process Transformation is measuring the ‘right’ numbers in order to make data-driven decisions regarding your marketing programs and lead management processes.  Often marketing and sales are analyzing metrics in their siloes and massaging the reports to inflate their value; and  often times the metrics that sales presents to the executives contradict the metrics marketing brings to the table.  This sounds familiar right? 
Because metrics are so critical to defining an action plan for improvement within sales and marketing, the need to agree on ‘One View of the Truth’ is amplified.  Revenue Performance Management is a buzz word in the industry and many marketing automation platforms contain this type of functionality, but what is ‘One View of the Truth’? This is a single set of metrics that both sales and marketing agree upon, review regularly and provide the necessary components to identify an actionable plan for improvement.
“One View of the Truth”  metrics should include several components:

• Waterfall health
• Pipeline health
• Pipeline dynamics

Each of these categories look at various metrics including demand funnel conversion metrics, funnel velocity, demand generation reach, pipeline value, pipeline attrition and demand program ROI.  One ANNUITAS client has implemented this type of reporting and as a result has been able to identify key areas within their demand process that needed attention.
For example, if sales says ”We need more leads”,  marketers with  a “One View of the Truth” report can accurately show that “more leads” won’t matter because conversion rates don’t support reaching revenue goals in the first place. The ANNUITAS client discovered that  upon further investigation, their issue wasn’t only at the top  of the funnel!  There was also a mid-funnel issue: the inability to convert sales accepted leads into qualified opportunities.  With clearly established metrics and best in class reporting  you can not only assess potential issues, but you can also drill down to get to root cause in different parts of the funnel. 
What would happen if mid-funnel conversions improved?  Not as many inquiries would then be needed at the top of the funnel!  For our client, sales and marketing together developed an action plan to address this issue which included the addition of a telemarketing function to help pre-qualify leads before passing them to an outside rep, tighter service level agreements and a nurture campaign specifically for marketing qualified leads to try and streamline movement through the buying cycle.   
While optimizations are still (and will always be) in process, this action plan has improved the overall revenue results for this client,  and has provided a venue for sales and marketing to work together to improve results for the organization. It all starts and ends with the metrics that matter.
Author: Missy Heilman @mheilman Vice President, Strategy Practice, ANNUITAS