Product Marketing: Measuring The Outcomes That Matter
In today’s digital world, marketing has become much more of a science than an art. In the past, marketers often threw various tactics towards the wall in hopes that one would stick. But today, marketers can measure the performance of campaigns far better than ever. This is all because of marketing analytics which allows you to measure every single aspect of your marketing. You can determine what worked and what didn’t work, and then you can adjust by leveraging that information to drive and grow your business. If it is indeed easier than ever to measure your marketing campaigns, then what are the marketing metrics that you should be including in your dashboard?
Marketing Metrics for your Dashboard – Quantitative
As we said, marketing today is much more of a science than an art, primarily because of the tremendous ability to truly measure our effectiveness. And on the science side of things, this means that we can measure quantitative metrics to understand how well our strategies and tactics are working.
- Revenue – This should be the most important metric in your scorecard or dashboard. The entire purpose of marketing is about driving sales. After all, there is no reason for marketing if you don’t have a product or service that you are trying to sell or promote. However, revenue is difficult to measure as a stand-alone metric. Rather, you need to look at what is influencing that revenue.
- Customer acquisition – This metric is essential for businesses of all sizes. It’s not enough to focus just on your existing customers. Customer acquisition is one of the fastest ways to grow your business, increase market share, and meet short term goals. It is also important to demonstrate the traction of your marketing efforts. The ability to systematically attract and convert prospects to new customers is what keeps companies of all maturity levels thriving and growing.
- Sales effectiveness – By measuring sales effectiveness, you can better manage your sales team to ensure that they are being as efficient, and effective as possible. To measure, you need to look at sales revenue, activity levels (appointments set and completed as well as leads produced), productivity (efficiency of your resources), sales messaging, and sales tactics. One of the best ways to put numbers behind sales effectiveness and the effectiveness of your salespeople directly is to measure progress against the sales funnel. Look at the conversion rate between each phase to see where you may have “leakage” in your pipeline:
- Lead qualification – Sometimes, sales and marketing professionals are too quick to assume that customer contact is a lead. It is not true that every contact who provides information on your website is really a lead. There is a qualification process that needs to happen to understand if the contact is in the market to buy. With many inbound contacts, it is simply that someone is researching something for a blog or something they need for a proposal on their own and are simply providing information to get access to the gated content. Because of this, it doesn’t mean that receipt of contact information means that someone is truly interested in purchasing the product. Therefore, some initial review needs to take place to determine if the contact is worth pursuing. In most cases, this phase ends with a determination of whether or not the contact can be considered a marketing qualified lead (MQL) or not.
- Lead evaluation – This step is also commonly referred to as the lead scoring phase. At this point, sales leaders and professionals to help prioritize which MQLs that they should go after. To do this, companies score leads by assigning points. These points are often tied to demographic and firmographic attributes of the contact, such as company size, the industry that the business falls in, and the contact’s job title. In some cases, organizations also look at behavioral scoring such as keywords, clicks, and web visits.
- Proposal phase – If a salesperson and their marketing counterpart have effectively gone through the above two steps, then the next phase is to understand the results of the BANT equation. BANT stands for budget, authority, needs, and timing and accounts for key information that is needed to determine if someone is ready to buy. If the BANT questions are answered positively which means that budget is in place, the prospect has authority to make a buying decision, their business has a need for your product or solution, and they need it soon, then your chances of closing the deal at this point can be as high as 80%.
- Negotiating the proposal – Very rarely does a prospect accept the initial terms of your proposal. Though more and more companies are moving towards a sales model where “this is it,” it is still quite traditional to expect some negotiation, and therefore, the initial proposal needs to be reasonable and at the same time, it needs to offer some flexibility.
- Closing the lead – This is clearly the final step and the one that everyone, salespeople and marketers alike, want to reach.
If you are seeing a statistically high drop-off at one point versus all of the others, this might mean you need to make some tweaks either to your sales process or to the product. For example, is your pricing reasonable? Are objections being countered or addressed? Are your salespeople not properly trained?
Moving Inbound Leads to Conversion
Perhaps one of the best gifts that a marketer, or a salesperson, can receive is an inbound lead that can move quickly through the sales process, ending in a deal. When this happens, especially when it happens frequently, it means that the sales process is working effectively. It also helps to ensure that return-on-investment (ROI) is where you want it to be. After all, if you get more and more inbound leads that turn into deals, especially those with a healthy average contract value, your marketing budget is bound to grow. The previous section will help you diagnose where you as a marketer can help improve the conversion rates leading to more closed deals.
On Qualitative Marketing Metrics
Sales data can only tell so much of the story, however. There is something to be said for other, more qualitative metrics when it comes to product marketing, and oftentimes these metrics are overlooked. Qualitative metrics require a bit more digging and creative thinking to really measure.
One way to get an idea of how your product is being perceived is through industry events. You could ask clients and potential clients what they think, but the true measuring stick is the amount of invites your PMM gets. Is your product marketing manager getting invited to speak at conferences? Are they being asked for quotes for industry news or events? Conferences, events, and interviewees naturally want to get their information from experts, so taken note of when your PMM is tapped for these would give you an idea of your company’s perceived expertise. This could also lead to being included in industry publications, which could do wonders with brand recognition.
Customers, too, want to get their information from the best, and should be seeking out your product marketing manager for an opinion. This is even more impressive when you take into consideration that they know they might be upsold, but still seek out their knowledge on the subject.
Social media can also give executives an idea on how well their product manager marketing strategy is working. If people want to keep up with industry trends, they will follow whomever they believe to be the experts in the field. The number of followers on social media (Facebook, Twitter, and to a lesser extend LinkedIn) can gauge how influential and respected your PMM is.
It’s much easier to judge your PMM’s effectiveness internally. How often is your executive team looking to him or her for advice? What about your sales team? Your product manager should know the product inside and out, and foresee where the product could be used or where it could be in the future. Having him or her as a resource like this is invaluable, but also quite immeasurable.
Pragmatic Marketing KPIs
The Pragmatic Marketing Institute has been a world leader in product manager and product manager training for over 25 years. In a recent industry conference, Dave Daniels, VP of Customer Success, put forth a few KPIs that Product Marketing Managers should focus on.
- Customer acquisition cost – This is the total cost of acquiring a new customer and includes things like advertising costs, marketer salaries, salesperson salaries, etc., divided by the number of new customers acquired.
- Close rate – Usually, this metric is defined as the number of successful sales divided by the number of leads, and then multiplied by 100. This becomes a closing ratio that is expressed as a percentage.
- Average cost per lead (CPL) – This metric measures the cost-effectiveness of your marketing campaigns and how well they can generate new leads for the sales team.
- Average contract value (ACV) – This is the average annualized revenue per each signed customer contract that you bring in for your business, exclusive of one-time fees such as onboarding costs, initial consulting, etc.
Workday Surveys – Assess and Learn to Improve Your Sales Process
Workday is a talent management organization that can help sales and marketing organizations to engage and retain their workforce, reduce staffing time, improve customer profitability and contract values, and ensure excellent customer service. Workday surveys can be used to quantify qualitative marketing metrics such as salesperson effectiveness and efficiency. Further, these surveys can be used to get performance feedback from clients as well as from fellow members of the sales team. Soliciting feedback is a key role in product marketing, and third parties can help to provide a neutral lense so that you can receive accurate and actionable information so that you can further tailor your marketing strategy. When used correctly, this insight will help make sure those marketing metrics are something that you and your organization can be proud of.
Not sure if your KPIs are meeting industry best practices? Contact Aventi today to schedule your assessment.