Wednesday, April 25, 2012

8 Essential KPI's for the Intersection of Marketing and Sales

Conversations between sales and marketing improve when marketing generates data on the state of joint processes such as lead management.  But companies who are serious about orchestrating sales and marketing in a modern go-to-marketing model need more than these execution-level metrics. At the intersection of sales and marketing, senior executives need operational-level investment, resource allocation, and performance metrics.

Tech marketers have done a great job of growing the range of measurement dashboards within their management tool box.  These reports provide data about process execution and are primarily driven from automation such as CRM, email marketing, and web analytics. The data in these reports can answer important questions such as how many leads were produced and what really happened to them? This data can be extremely useful when talking to sales.  Replacing hearsay, gut feelings, and assumptions with accurate data results in a much more credible and actionable conversation.

Operational Insight Drives Strategy
 
While this kind of data is valuable at an execution level, it isn't the kind that drives strategic decisions. Senior management needs to know how to invest their most powerful resources – money and people – to get the best results. For this task, they need operational key performance indicators (KPIs) that answer questions such as what are my people really doing and where is my money deployed. Just as important, they need context around this data in order to understand its meaning and highlight what to change.

Comparison benchmarks serve as excellent insight into the meaning of operational-level KPIs. IDC has produced such operational-level scorecards for many years for each function separately - for marketing (IDC's Marketing Performance Scorecard) and for sales (IDC's Sales Productivity Scorecard). These scorecards are based on detailed investment data from over 100 tech companies. IDC parses leaders from laggards, mines for best practice nuggets, and combines this information with insights drawn from scores of interviews, interactions, surveys and the IDC teams' deep practitioner experience.

Introducing the Customer Creation Scorecard: Operational KPI's for the Intersection of Sales and Marketing
 
However, operational benchmarks have been lacking for companies who are serious about orchestrating the collaboration between sales and marketing within a more modern go-to-market model.  For this initiative, senior executives need to look at the joint investments in sales and marketing.

Recently, IDC introduced the Customer Creation Scorecard - eight operational KPI's leading companies should add to their dashboard. The eight are organized into three categories: investment, staff efficiency, and productivity levers.

Here are the aggregate level benchmarks for your 2012-2013 planning processes:
  1. Investment: Sales + marketing budget ratio = 10.6% of revenue is spent on sales and marketing combined
  2. Investment: Sales to marketing ratio = 4:1
  3. Investment: Marketing investment per total sales headcount = $40K to $70K
  4. Staff efficiency: Quota bearing headcount to field marketing ratio = 32:1
  5. Staff efficiency: Program to people KPI = 27% of all sales and marketing investment is spent on programs and the remainder on people
  6. Productivity levers: Operations staff percentage = 4.7% of all sales and marketing staff are in sales operations or marketing operations roles
  7. Productivity levers:  Sales enablement score = 47 out of 100 is the index that IDC has developed for the technology industry based upon detailed quantitative and qualitative research
  8. Productivity levers:  Lead management score = 52 out of 100 is the index that IDC has developed for the technology industry based upon detailed quantitative and qualitative research

IDC finds that these benchmarks vary significantly depending on attributes such as go-to-market model, company size, and industry sector.   IDC's also provides guidance around these KPI's.  For example, IDC recommends that companies measure sales and marketing costs jointly to better control overall expenses (this includes "shadow" marketing investments where sales teams use their own funds to conduct marketing activities).

For more information on the Customer Creation Scorecard, IDC insight on what your KPI ranges should be and what to do about it contact me or anyone on IDC's Executive Advisory Group team.
 

Monday, April 9, 2012

B2B Marketing Going Mobile

IDC calls Mobility one of the Four Forces transforming the information technology industry. How big a force is mobility in tech marketing? Marketers at the forefront say that incorporating mobile channels into the mix is not an "if", but a "when".

Rampant Mobility Adoption
IDC projects that smart phone shipments will be $659.8M in 2012 up 33.5% from 2011 and expects shipments of media tablets to be $87.7 million, an increase of 38.6%. At the recent B2B's Digital Edge Live conference, Mark Wilson, SVP of Corporate and Field Marketing at Sybase, an SAP company, got lots of tweets when he claimed that there are more mobile phones in the world than toothbrushes (5.5B vs. 2B)! Businesses are rapidly putting smart phones and tablets into employees' hands in order to increase productivity and responsiveness.

Why Mobility Matters to Marketing: Better Buying Experiences Win
Mobile devices also enable better customer engagement and loyalty - this is the reason why mobility should matter to B2B marketers. Many companies continue to imagine that people make buying choices based solely on the value of the product or service offered. However, the buying experience itself is playing a bigger role in choice.

The internet has changed the buyer's selection behavior. Google has accustomed us to simply stating our needs and then enjoying the luxury of thousands of options. With such an abundance of choice, buyers can flit from option to option, deserting those that disappoint and engaging where they find an easy, clear, interesting, and possibly entertaining, match to their need.
To increase the chances of making a match and thus gaining engagement, B2B marketers already employ various types of buyer context including personalization, role, and vertical industry to the digital dialog. Mobility provides marketers with added potential.


  • Convenience - Mobile buyers can engage anywhere and anytime. Time flexibility increases the buyer's control over the interaction and can make it more satisfying. Users can use otherwise wasted time, so they may engage more deeply. Some companies report average interaction time going from seconds to minutes.

  • Relevancy - Vendors can better match a buyer's need by incorporating location-based context. Location-based context takes many forms. Offers can be linked to a nearby kiosk at an event, for example. Customer service representatives or sales people who are physically with a buyer can integrate mobilized digital content with the interpersonal dialog at the moment of need. Additional interaction time also increases the buyer's data footprint so that more preferences can be implied.

Going Mobile
Another panelist at the B2B Digital Edge Live conference, Jeff Klainberg, Director of Mobile Strategy, at American Express OPEN, recommended these three steps to mobilize your marketing:


  1. Establish mobile channels at parity with other digital channels. (Bring things you now do on the web to your mobile channel)

  2. Leverage open assets (such as free apps and free content) to create differentiated engagement and value delivery

  3. Breakthrough: once you get some experience, start creating differentiating new experiences that you can only do on mobile devices

Ideas for Successful Mobile Marketing
Sybase's Wilson provided his company's experience in successful mobile marketing applications:


  • eBooks: Books published for tablets and published on iTunes has led to 20x demand over print for Sybase content

  • Display ads: "Tap-rates" from mobile display ads get a substantially higher response over PC web click-rates

  • Mobisite: Some microsites optimized for mobility have achieved more than an average of five minutes per session

  • Events: Mobility enriches the event experience with the ability to buy goods on the event floor, to participate in contests, and recieve alerts

  • Demos: Sales enablement is one of the BEST uses of mobility. The ability to augment a sales conversation with immediate use of experts (via video), demo's, or other digital enhancement can transform the sales job
Today, mobility is smart phones and tablets. Expand your vision of what a "device" can be. Check out the world's most watched corporate video (created by agency Doremus) for Corning called A Day Made of Glass.