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Introduction to Sourcing and Influence Metrics
Performance measurement is a dynamic and multifaceted challenge. Across different companies, there exists a wide variation in how marketing's effectiveness and impact are evaluated. This diversity stems from the complexity of modern marketing strategies and the evolving landscape of the business-to-business domain.
Two common techniques for measuring marketing performance at an executive level are Marketing Sourcing Metrics and Marketing Influence Metrics. Both techniques aim to provide insights into how marketing initiatives contribute to business outcomes, yet they do so from distinct angles. Understanding the nuances of sourcing and influence metrics is essential in the pursuit of an accurate and comprehensive understanding of marketing impact.
So, let’s dive right in!
Sourcing Metrics: Rooted in Inbound Marketing History
Sourcing metrics, often associated with the emergence of inbound marketing, focus on measuring how much business was originally sourced by marketing efforts. In essence, they track the leads and opportunities that marketing directly generates. This metric is crucial for quantifying the immediate impact of marketing initiatives on lead generation, a vital aspect of B2B marketing.
Influence Metrics: A Staple of Marketing Practice
Influence metrics, on the other hand, have been around as long as marketing itself. They aim to gauge how much business is influenced or impacted by marketing activities. While sourcing metrics focus on the origin of leads, influence metrics delve into how marketing contributes to the customer journey and decision-making process. These metrics are tracked over a longer period of time, capturing the enduring influence of marketing on potential clients and business development.
The Ongoing Symbiosis of Marketing and Sales
Historically, marketing has enabled sales. It creates awareness, generates leads, and nurtures prospects to the point where the sales team can engage and convert deals effectively. Yet, marketing's role doesn't end there; it extends well into the customer journey, ensuring that the customer's experience aligns with the brand's promise.
So, are they same-same but different?
Marketing and sales differ significantly when it comes to measuring performance. Sales activities are usually more quantifiable, making it relatively straightforward to measure their contribution. In contrast, marketing's influence may not always be easily quantifiable, as it encompasses a wider array of touchpoints throughout the customer journey.
In the C-level meetings at the executive level, where strategic decisions are made, understanding marketing's impact is pivotal. C-level executives seek to evaluate marketing's performance to assess its alignment with overall business goals, determine resource allocation, and make informed decisions. This assessment often revolves around sourcing and influence metrics, as they provide valuable insights into marketing's direct and indirect contributions to business growth.
Marketing's influence is evident in the numbers that matter most to an organization: revenue, customer acquisition, and brand reputation. To translate marketing's influence into measurable impact, sourcing and influence metrics have been serving as tools for the modern marketing professional.
But are these two tools enough?
In the next sections, we will understand both tools in more detail, explore their limitations and propose new strategies that can help marketing professionals move beyond the current status quo of marketing measurement metrics and achieve a more accurate reflection of their impact on business success.
The Role of Sourcing Metrics in B2B Marketing
Traditionally, sourcing metrics are harnessed to evaluate the immediate and tangible outcomes of marketing efforts. B2B marketing strategies often involve content marketing, advertising campaigns, email marketing, and social media engagement. These activities are strategically designed to draw the attention of potential clients and encourage them to take specific actions, such as signing up for a newsletter, downloading a whitepaper, or requesting a product demonstration.
Sourcing metrics come into play by measuring the efficacy of these marketing tactics. They help determine how many leads and opportunities are sourced directly from these campaigns, providing marketing professionals with a clear and quantifiable understanding of their impact on lead generation.
The metrics often encompass:
- Lead Generation: The number of leads generated through marketing initiatives.
- Conversion Rate: The percentage of leads that successfully convert into opportunities.
- Customer Acquisition Cost (CAC): The cost incurred to acquire a new customer.
- Return on Investment (ROI): The return generated for each marketing dollar spent.
Limitations of Sourcing Metrics
While sourcing metrics offer valuable insights into the immediate impact of marketing initiatives, they have inherent limitations when used in isolation. These limitations can hinder a comprehensive understanding of marketing performance, particularly when it comes to B2B marketing.
1. Short-term focus
Sourcing metrics primarily reflect short-term results. They capture leads generated and conversions made but may not account for the enduring impact of marketing on the customer's journey. In B2B marketing, where sales cycles are often longer, an overemphasis on sourcing metrics might lead to an incomplete assessment.
2. Overlooking Influence
Sourcing metrics tend to downplay the broader influence of marketing on potential clients. They focus on quantifying the immediate lead generation but may not capture the touchpoints that influence a prospect's decision-making process over time. This omission results in a less comprehensive understanding of marketing's contribution.
3. Neglecting Brand Building
Sourcing metrics often does not adequately account for brand-building efforts, which are fundamental in the B2B landscape. Building a strong brand presence influences prospects even before they become leads. This early-stage brand awareness might not be fully reflected in sourcing metrics.
The Need for a Holistic Approach
The limitations of sourcing metrics become increasingly evident when considering the complexity of the B2B marketing environment. B2B deals often involve intricate decision-making processes, extended sales cycles, and multiple stakeholders. These factors necessitate a holistic approach to marketing measurement that goes beyond sourcing metrics.
Case Study: Why are sourcing metrics insufficient?
Case Study
HP Inc. is a multinational information technology company that specializes in personal computing and related products. In the past, HP used sourcing metrics to measure the effectiveness of its marketing campaigns. These metrics included the number of leads generated, the number of opportunities created, and the number of sales closed.
However, HP realized that these metrics were not a true reflection of the success of its marketing campaigns. For example, a campaign might generate a large number of leads, but only a few of those leads might actually be qualified or converted into sales.
HP also realized that its marketing campaigns were not aligned with its overall business goals. For example, HP might be running a campaign to generate leads for a new product, but its sales team might not be ready to sell that product yet.
Solution
- HP decided to shift its focus from sourcing metrics to customer-centric metrics. Customer-centric metrics measure the impact of marketing campaigns on customer engagement, satisfaction, and loyalty.
- HP began tracking customer metrics such as the number of website visits, the number of social media interactions, and the number of customer inquiries. HP also began tracking customer satisfaction and loyalty through surveys and other forms of feedback.
- By focusing on customer-centric metrics, HP was able to create more effective marketing campaigns that were aligned with its overall business goals.
In a nutshell:
HP's case study shows that sourcing metrics can be a flawed way to measure the effectiveness of marketing campaigns. Companies should focus on customer-centric metrics instead, as these metrics provide a more accurate reflection of the impact of marketing on the business.
Influence Metrics in B2B Marketing
From the above section, it's clear that sourcing metrics, while valuable, do not provide a complete picture of marketing performance. Now, let’s delve deeper into the realm of influence metrics and explore how they contribute to a more comprehensive understanding of marketing performance in B2B.
Why did organizations shift to influence metrics?
The transition from solely relying on sourcing metrics to incorporating influence metrics in B2B marketing is driven by the need for a more comprehensive view of marketing's role. Compared to sourcing metrics, influence metrics offer a more complete understanding of how marketing initiatives influence decision-making throughout the entire customer journey.
The shift towards influence metrics was further motivated by the following factors:
1. Prolonged Decision-Making
B2B sales cycles are often protracted, spanning several months or even years. During this time, potential clients interact with various marketing touchpoints, each of which contributes to their eventual decision. Influence metrics enable marketers to track and evaluate these extended interactions, which sourcing metrics might overlook.
2. Multichannel Engagement
In today's digital age, prospects engage with marketing content across multiple channels. They might receive emails, browse a company's website, attend webinars, and interact on social media. Influence metrics provide a holistic perspective by accounting for the impact of each of these channels, recognizing their cumulative influence on decision-making.
3. Multiple Stakeholders
B2B purchases often involve multiple stakeholders within an organization. Influence metrics consider the influence of marketing efforts on various decision-makers, acknowledging the diverse touchpoints that cater to each stakeholder's needs.
Limitations of Influence Metrics
While influence metrics offer valuable insights into the broader impact of marketing in the B2B arena, they also have their set of limitations. Acknowledging these limitations is essential for gaining a more realistic view of marketing performance.
1. Difficulty in Quantifying Influence
Influence metrics, by nature, deal with qualitative data and soft measurements. They can provide insight into the impact of marketing efforts but may not be as easily quantifiable as sourcing metrics. This makes it challenging to attribute a specific monetary value to influence.
2. Data Complexity
These metrics often involve tracking a multitude of touchpoints and interactions across diverse channels. Managing and analyzing this vast amount of data can become complex, requiring sophisticated tools and methodologies.
3. Synchronizing with Sales Data
Aligning influence metrics with sales data can be challenging. Unlike sourcing metrics, influence metrics may not directly correlate with short-term sales figures. This can lead to discrepancies when trying to measure marketing's contribution in terms of revenue generation.
The Need for Balance
As B2B marketing continues to evolve, the consensus is clear: reliance solely on sourcing metrics or influence metrics might not provide a complete picture of marketing performance.
Now that we’ve understood sourcing metrics and influence metrics, it’s clear that both have their roles and strengths. However, the most insightful evaluation emerges when they are used together, along with other metrics that set off their disadvantages, respectively.
Relying solely on one or the other can lead to an incomplete picture of marketing performance. It's not an "either-or" scenario; it's a "both-and" strategy that paints a more comprehensive canvas of marketing's influence.
So, what’s the way forward?
Acknowledging the above limitations has paved the way for exploring alternative approaches to marketing measurement: Engagement Scoring.
Exploring Engagement Scoring
One promising alternative on the horizon is engagement scoring. Unlike sourcing and influence metrics, which primarily focus on lead generation and the influence of marketing touchpoints, engagement scoring takes a different route. It prioritizes measuring how engaged and receptive your audience is to your marketing efforts.
Engagement scoring considers a spectrum of interactions, such as content consumption, participation in webinars, social media engagement, and email responses. It doesn't just stop at identifying whether a prospect is interested in your product; it delves deeper into how engaged they are and what specific content or interactions resonate with them.
For a more in-depth exploration of engagement scoring, stay tuned for our next blog, where we will dissect this emerging approach and its application in modern B2B marketing measurement.
Moving Towards a New Approach
From the above sections, one thing has become abundantly clear: B2B marketing is in a state of constant evolution.
The limitations of the existing techniques have set us on a quest for a more holistic and encompassing approach. It's a journey that's far from over, and it's a journey that demands adaptability and innovation.
Embracing a data-driven approach is the cornerstone of effective marketing performance measurement. Data is the lifeblood of modern marketing, and by harnessing the insights from sourcing metrics, influence metrics, and engagement scoring, we can fine-tune our strategies and maximize our impact.
The path to optimizing marketing measurement is a dynamic one, where change is the only constant. And as you can tell, the world of B2B marketing is ever-evolving, and so must be our approach to measurement. It's not a destination but an ongoing journey.
So, as we move forward, let's leverage the full potential of sourcing metrics and marketing influence, all while remaining receptive to emerging approaches that enhance the art and science of B2B marketing. By doing so, we not only meet the challenges of today but also prepare for the exciting opportunities of the future.
