As the proliferation of media channels and content forms accelerates, channel marketers are taking a harder look at metrics to determine the ROI of campaigns and partner programs. While these metrics are vital to quantifying the efficiency of specific sales and marketing programs, industry experts say many corporations are not optimizing the benefits that come with measuring ROI of specific campaigns.
The 2011 Lenskold Group Marketing ROI & Measurement Study revealed that only 28% of marketers use ROI metrics to assess at least some portion of their marketing investments, while 36% use some financial metrics, but not ROI. The remaining 36% use traditional, non-financial metrics. OEMs and manufacturers specifically are struggling to determine the ROI of partner programs due to data gaps caused by inefficient reporting, according to Jim Lenskold, Managing Director of Lenskold Group, Inc.
“I would still say it’s an area that needs work,” Lenskold told Channel Marketer Report. “Reporting ROI is probably one of the bigger challenges because it’s more complex within the channel. There are multiple parties involved and each has different relationships with end buyers. The challenge is really about access to data because the partners have a good portion of the data in terms of whether they are generating leads or whether they’re managing the leads generated by the OEM. So the biggest challenge is the data gap.”
By collaborating on determining the “metrics for success,” Lenskold said OEMs and partners will have a better understanding regarding what behaviors to track and most importantly, how to pinpoint an optimal marketing tactic. This joint venture encourages channel communication, formulates trust among partners and OEMs, and most importantly, increases efficiencies regarding spend.
“It surprises me that this doesn’t happen more frequently,” he said. “It’s a win/win approach, but it requires a little bit more effort because OEMs and partners have to coordinate to determine the program requirements and the measurements that are needed. At the end of the day, if you want to see the partner funding grow, and these market development funds grow, everyone needs some feedback as to how to best spend that money.”
CCI Channel Management Solutions supported that argument in a recent blog, titled “What Is The Magic Number You Must Get To Optimize ROI On MDF.” In the blog, Craig DeWolf, VP, Strategic Development for CCI, states that OEMs need to determine:
Once OEMs have some guidelines in place, they can work with the partners to collect the data they need to calculate their ROI, which comes down to three basic metrics, according to Lenskold:
Channel marketers can view a sample of a basic ROI spreadsheet, and apply their own metrics to calculate campaign success, by downloading Lenskold Group’s ROI tools.
To help get to your end results, Craig DeWolf from CCI also suggested comparing results across partners. For example, once you have your metrics defined along with a specific sales period OEMs, can run a test group of partners that utilize MDF funds, versus those who don’t to determine the relative difference in sales. The difference determines the MDF’s total uplift. Or if you have established a standard cost per lead metric, OEMs can compare these results with best-in-class partners to quantify overall effectiveness.
Measuring prospect engagement has emerged as a key way to determine prospects’ positioning in the customer funnel by tracking research behaviors and interactions with the company. This more diagnostic tactic allows marketers whether marketing tools, including white papers, webinars and social media strategies, influence sales volume and the overall quality of customers, Lenskold said. “Because we don’t want to drive high volume with low-value customers,” he said. “In some cases, the reverse is actually better. If we could generate a few high-value customers, that’s good.”
Furthermore, marketers must analyze engagement to determine the influence of marketing tools. “We don’t want to spend a lot of money on engagement that doesn’t go anywhere,” Lenskold added. “We also should be looking at the incremental value each customer and/or prospect creates. That is another important metric that I think gets left out far too often because the measurements get a little bit harder.”
As B2B buying behaviors continue to evolve, the influence of social media marketing and content collateral is coming to the forefront. By investigating engagement metrics, such as the “engagement to sales conversion ratio,” marketers will have a better understanding of how these interactive tolls affect the bottom line.
However, to increase engagement among current and prospective marketers, channel marketers must ensure that messaging and content format measures up to target audiences and their company pain points.
B2B buyers are growing more fluent in researching potential solutions via third-party insight found on social networking sites, solution ratings and reviews, and content. Research from DemandGen Report’s “Inside The Mind Of The BtoB Buyer Survey,” indicate that nearly half (47.9%) of respondents took more time to research and consider solutions. As a result, interactive marketing tools are playing a more vital role in optimizing sales and ROI results.
“What we don’t want to do is spend a lot of money on engagement tactics that don’t really go anywhere,” Lenskold said. “Marketing is playing a bigger role in educating and getting contacts that become sales ready. So not only should partners close more, but that whole education should have a lot of impact on customer value. Meaning, when these prospects move to sales, they will buy more because they’re better educated.”
OEMs and partners can optimize marketing messaging via social networking sites and content collateral by analyzing the overall engagement to sales conversion ratio. While social media has emerged as a key way for OEMs and partners to interact with prospects and current customers, Lenskold notes that this area of engagement relies on “trial and error.”
In fact, findings from Lenskold Group’s The 2011 Marketing ROI & Measurement Study revealed that only a small fraction of corporations have strengths in measuring incremental sales (20%) and ROI (19%) via social media. This is primarily because marketers are struggling to determine the potential effect of social behaviors, such as “Liking” and “Re-Tweeting.”
“Trial and error becomes even more critical in the channel partner world because there are multiple stakeholders and areas you can invest in,” Lenskold said. “At the end of the day, what do they add up to? Marketers may have tools that can drive ‘Like,’ but you have no way to determine what happens next.”
B2B companies point to the growing importance of measuring the impact of social engagement. A majority (65%) noted that social measurements are a high priority due to the “need to improve effectiveness,” while 59% believed there was a “need to improve integration with other marketing,” according to Lenskold Group research. By integrating social behaviors with overall pipeline activity, marketers can better track the success or failure of these interactions, Lenskold explained.
“If an OEM is successful at getting more ‘Likes,’ then all customers within its network gives an implied endorsement. It’s all about determining whether an OEM can get that new network to interact with them and get them into their pipeline. It’s always about the integration to tie back to other things that better go and get people through the buying cycle.” Lenskold Group research revealed that while some companies track the quantity of engagements and participation via social networks (43%), some track the number of new names generated (32%).
Similarly, multi-touch campaigns are presenting channel marketers with a daunting task of reporting and analyzing campaign results. Lenskold recommended a thorough modeling and analytics process, so OEMs can track how marketing touch points add up in terms of value. Marketers also can determine the incremental value of each asset through thorough testing via control groups. Once overall effectiveness is determined OEMs can make alterations where needed.
“If you have a good data, you want to know how all these touch points interact with one another and add up to something,” Lenskold said. “What we’re looking for is the incremental impact of each. It takes modeling to really understand that because otherwise, from a tracking standpoint, it’s a good base level measurement, but it doesn’t take into account all of the touch points that come either before or after.”
In the end, ROI calculations won’t help you sell more or help your partners sell more, Leskold points out. And what tactics work for one OEM or one set of partners won’t work for the next one.
But, as marketers, the primary goal is to continuously experiment and gather feedback that can tell you what’s more effective. Understanding the behavioral patterns of buyers is a key asset to understanding the path to purchase. If all marketing and partners marketing do not lead back to that it doesn’t accomplish the end goal of getting more people to buy.
“All of the new media channels and the content may have changed how people get informed, but at the end of the day they still go through the “What are my options and what are my pain points?” explained Lenskold. “So now more than ever, that path to purchase is something that the OEM absolutely needs to understand. They have to determine their current marketing strategy, their partners, and analyze their strengths and weaknesses. Then, with that framework in place, OEMs can implement a good discipline of testing and measuring different strategies.”