Marketing Analytics & Accountability To Optimize Revenue

AMA Marketing Effectiveness
Online Seminar Series

Anna Carbonara
American Marketing Association

Marketing Analytics

Helping You Stay Accountable, Op5mize Revenue and Sleep 
at Night

Agenda

1. Marke5ng is changing‐ where are we today?
2. Outcome based measurement
3. Performance driven marke5ng
4. Key analy5c processes
5. Case study: how Marketo measures marke5ng 
performance

© 2009 Marketo, Inc. Marketo Proprietary and Confidential Page

Marketing has an Image Problem
Faddish
Missing the broad perspec5ve
The group that makes “color 
brochures”
Metrics that don’t (directly) 
impact the business – awareness, 
leads, and coverage
Cost center

Fundamental problem: other CXOs don’t understand the role 
of marke5ng, and marke5ng doesn’t communicate it


The Changing Role of the CMO

Strategic and financial 
leadership to the organiza5on
Customer focus
Excep5onal measurement and 
analy5cal capabili5es
Rigorous financial and budget 
management
Hard financial metrics like 
revenue and cash flow (“the 
financial language of 
business”)

Earn a Seat at the Revenue Table
Who Owns Revenue?

Sales owns  Marke>ng owns 
“in‐period”  “out‐of‐period” 
revenue revenue

Lessons learned from Sales:
Deﬁned process and methodology
Measure outcomes, not inputs
Forecast results, not spending
Use automa5on technology

Introduction to Marketo

More than 300 mid‐market  … Marketo Lead Management  ...to change the way marke>ng 
and enterprise companies use… and Marketo Sales Insight… and sales work together…

 Priori5ze and deliver high 
quality leads with less effort
 Understand and interact with 
the hofest leads
 Close more business faster
 Achieve smarter selling and 
higher win rates

• ‘Best Marke5ng Automa5on’ app  • Uncompromising solu5ons for  • Lowers risk and total cost of 
by Salesforce customers marke5ng and sales effec5veness ownership

…and ignite explosive revenue growth.

“In our second year of using Marketo, we now drive significantly more sales 
opportuni5es with the same budget and have increased sales‐ready leads by 400%.“
                                    ‐ John WaEon, ShipServ VP Marke5ng and B2B Magazine 2009 Marketer of the Year


VisionEdge Marketing:
Experienced Practitioners
Founded in 1999 and headquartered in Aus5n, TX, VisionEdge Marke5ng, Inc. 
serves more than 100 customers, and coun5ng.
VisionEdge Marke5ng, Inc. is a data‐driven and metrics‐focused marke5ng ﬁrm that 
specializes in improving marke>ng performance and crea>ng compe>>ve 
advantage designed to afract, secure and retain proﬁtable customers. 
Services include:

 Marke5ng performance 
management
 Marke5ng and sales alignment
 Product and strategic marke5ng
 Pipeline re‐engineering
 Professional development

© 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page

The State of Marketing Budgets
Marke5ng budgets were cut over 20% on average in 2009 vs. levels in 2007/2008
According to B‐to‐B Magazine 2010 Outlook: Marke5ng Priori5es and Plans” survey, 
“in 2009 nearly 60% of marketers cut their marke5ng budgets in response to the 
recession.”
The number of companies that cut marke5ng budgets in 2009 is 25% higher than 
predicted in January 2009
In one survey (Forrester) less than 20% of companies are expec5ng marke5ng 
budget increases while over 40% are expec5ng further reduc5ons in  2010.


A Never Ending Cycle

The problem faced by many marke5ng 
professionals is that, tradi5onally: 
marke5ng budgets are based on a 
percentage of last year's revenues or 
budget
which ignores the rela5onship 
between marke5ng spending to 
eﬀec5veness and 
has a short‐term focus leading to 
limited success. 

Op5mizing the marke5ng budget is a 
valuable strategic tool 


Show Me the Money

•Where is the money?
•What is the business impact?

VEM MPM Study 2009


Why Companies Invest in Marketing

Understand the market and customers
Develop and execute a strategy to create preference and 
considera>on that enables the organiza5on to:
 Acquire more of something
 Acquire it faster
 Acquire it cheaper
Otherwise, you might as well just put more feet on the street
Need to demonstrate we are “geqng the job done”


Customers Connect Marketing to the
Business of Business

“The purpose of a business is to 
create a customer.” 
‐ Peter Drucker 


Marketing’s Three Primary Roles:

Find Profitable Customers/Consumers
 The process of acquisi5on
 New customer acquisi5on – net new business 
Keep Profitable Customers/Consumers
 The process of reten5on/renewals
Grow Profitable Customers/Consumer
 The process of increasing the value of your customer 
franchise and brand ‐ Cross‐selling


Our 3 Roles Enable Us to Move 3
Business Needles

Find/Secure Grow
Keep
Proﬁtable Customer
Customers
Customers Value

Acquisi>on Penetra>on Mone>za>on

Brand/
Market Share Life>me Value
Customer Equity


The Impact of a Job Well Done

• Enjoy Economies of Scale
Acquisi>on Market
Share • Maintain Greater Proﬁtability
• More Leverage with Suppliers

Life>me • Higher referral rate
Penetra>on Value • Less cost to serve
• Less price pressure

Brand/ • Less vulnerable to compe55on
Mone>za>on Customer • Befer success rate
Equity • Higher prices


Our Objectives Aren’t Aligned with
the Business


And Neither Are Our Budgets

A hypothe5cal  but all too common marke5ng budget:


As A Result, We Have Trouble
Demonstrating Our Value

 Less than 20% of C‐Suite give Marke>ng an “A” vs. nearly 50% of CMO/VP

VEM MPM Study 2009; n=232


Time for a new approach and a new
way to budget

• Build Ini5a5ves Around 
Business Outcomes 

• Align budget and measure 
our impact, value and ROI on 
what mafers to the C‐Suite


Performance Management

…the process of 
measuring 
progress toward 
achieving key   “The top challenge for marketers remains to 
outcomes and  beEer quan>fy and measure the value of 
marke>ng programs," in spite of improvements 
objec5ves in  in accountability over previous years.
order to op5mize 
individual, group 
or organiza5onal 
performance.

CMO Council's 2008 Marke4ng Outlook


Performance Management Best
Practices

Measurement  Analy>cs and  More Strategic  BeEer Tools and 
Competence Skills  Metrics Process
“Pressure has mounted  “Lack employees with  Nearly everyone says business  “Shockingly low investments 
on marketers to  speciﬁc marke5ng  with exis5ng customers is  in marke5ng technology and 
accurately predict,  analy5cs  important, few use metrics such 
s5ll immature 
as length of customer tenure, 
measure, and op5mize  exper5se” (Forrester  processes” (IDC Dec 2008)
purchase frequency and recency, 
results” (Marke5ng  2008) value of the overall customer 
Sherpa 2009) base, customer life5me value  “Real success will come from 
“Less than half of  and share of wallet being smarter and more 
respondents use  •Other than leads to conversion, 
strategic in opera5ons” (B‐to‐
analy5cs” (Alterian  track lifle else.  (VEM 2009)  B 2009)
2009)


Requires Performance-Based
Marketing

Have a set of measurable 
performance standards, a pointed 
focus on outcomes and clear lines of 
accountability ‐ all of which are 
important if a marke4ng organiza4on 
wants to prove its value.


Measurement Competency

See measurement and 
metrics at power enabling 
marke5ng
 Inﬂuence decisions
 Communicate impact
 Demonstrate accountability
 Recommend ac5on
 Play a strategic role

Take an outcome‐based 
approach
Use Performance Target 
Seqng for con5nuous 


It all Starts with Business Outcomes

Name Descrip5on/Defini5on Examples
Outcome A consequence, result, effect  Ranked #1 in the region for my age
How the organiza5on will measure success Achieve #1 market share in XYZ market

Measurable  States what is to be achieved and when results  Accumulate the most points per race in my 
Objec5ve are to be accomplished  age group 
Increase preference for AB product among top 
What you will do to move the needle? share determiners in XYZ markets
Key Performance  The only difference between a metric and a KPI   Race Wins
Indicator (KPI) is that a KPI embodies a strategic objec5ve and   Share of preference
measures performance against that  objec5ve 
 Product  Adop5on Rate
and/or outcome.

Performance  A commitment to achieve a specific and befer   Pace (miles/hour, mins/mile)
Target quality or level of performance over a specified   # Share Determiner Qualified Leads
5me frame.
 # Share Determiner RFPs
Used to evaluate performance achieved 
compared to performance expected


A Vital Relationship:
Outcomes and Objectives
Outcomes Objec5ves
Tie marke5ng to the business  Establish measurable 
outcomes at the outset objec5ves and strategies 5ed 
Understand what your  to customer‐centric 
company is trying to do and  Outcomes
which of those things you  Your analysis serves as the 
can directly and indirectly  basis for seqng performance 
impact targets for your objec5ves 
Aim for customer‐centric  and strategies
outcomes
 Finding
 Keeping 
 Growing the value of 
customers

Performance Based Marketing
Objectives
Increase referral rate of
Establish performance  existing customers by
targets that are: 40% by YE2009

 Realis5c 
25% of existing
customers will adopt
 Measurable new XYZ product within
6 mos. of launch at
 Time speciﬁc launch price $A

 Aligned and consistent 
Contribute 25% of
with 
the qualified new
the organiza5on’s  opportunities to the
priori5es pipeline quarterly
Improve customer
advocacy score by 10%
by YE2009


What Would The Shi` Look Like: 
FROM Measuring Ac>vity TO Linking to Outcomes

• Run six half‐page ads in all Tier one  • Add 7‐8 new strategic accounts to support NA 
trade publica5ons Market Penetra5on
• Exhibit at the primary tradeshow for  • Increase customer life5me value from X to Y
each ver5cal • Grow share of wallet among our top customers 
• Create product brochure for new  from A to B
product • Increase Tier one customers purchase to 2 or 
• Revise online demo more products from the Y Family
• Generate 500 leads • Add 3 new VARs in each of three primary 
• Implement a promo5on with two  ver5cals 
distributors • Add one new channel partner in each region
• Distribute newslefer 6 5mes • Grow Tier one distributors sales by X%
• Send email blasts to prospects monthly • Grow our product category by X%
• Conduct customer sa5sfac5on survey • Increase penetra5on of ABC product in Tier 
• Research customer product  one customers by 15%
requirements • Improve our NAS from 10.2 to 16
• Change our MVI from <100 to >100

How does this change the budget process and conversa>on?

Adopt a Metrics Framework:
Tactical Strategic
Predic>ve

Likelihood 
Leading‐ of Outcome
Indicators Share of Wallet
Rate of Growth: 
Market
Business Outcomes Brand Preference
Outcome‐ 
Market Share
Based
Category Ownership
Life5me Value
Eﬃciency Adop5on Rates
Opera>onal Lead/Rep
Lead Aging
Campaign ROI
Coun>ng Program: People Ra5o
Ac>vity‐ Media Men5ons
Cost/Billing Dollar
Based  Program spend/headcount
Trade show leads
Program/Total Spend
Click Through Rates
Awareness: Demand Ra5o
Site Registra5ons
Demo Downloads

Illustrating the Importance of
Selecting the Right Metric:
Measuring Ac5vity vs. Outcomes
Lose 20 lbs. by the end of 
the year
Finish a 5K in under 28 
minutes
Diﬀerent outcomes mean 
diﬀerent metrics of success, 
even though may use the 
same tac>c for each
What’s the metric for the: 
 Lose weight outcome?
 Finish 5K outcome?

Calories or Pace vs. Running 5x/week

Outcome-Based Measurement

Characteris5cs of Eﬀec5ve 
Connect Marke>ng Investments and 
Metrics  Metrics to the Business
  Accurate and Precise 1. Begin with business outcomes
  Reliable 2. Iden5fy most important measures 
  Relevant of success
  Aligned 3. Deﬁne performance indicators 
connected with these measures
  Owned
4. Determine which data provides 
  Predic5ve necessary informa5on
  Ac5onable 5. Focus on the most relevant, 
  Easy to understand   essen5al, & valuable ac5ons
  Transforma5ve 6. Analyze & report

  Standardized

Select Outcome-Based Metrics Based
on Marketing’s Job
Business Outcomes and Marke5ng Objec5ves Provide Insight into Metric

Certain Facets of Performance
Move Needles for Each Gauge

5 Market Share Indicators 4 Life>me Value Indicators 5 Customer/Brand Equity 
• Share of Preference • Purchase Frequency Indicators
• Share of Voice • Share of Wallet • Price Premium
• Share of Distribu>on • Advocacy/Loyalty • Net Advocate Score

• Rate of Customer  • Tenure • Customer Franchise 
Value
Acquisi>on
• New Product 
• Rate of Growth:Market
Acceptance/ Adop>on 
Rates
• Product Margins


Tie the Budget Back to the
Business
1. Engage  ‐  the leadership team to  6. Allocate  ‐ the dollars based on the 
understand the organiza5on’s  model
emphasis in terms of resources on  7. Monitor 
find, keep and grow to create an  Monitor how well the programs 
alloca5on model performed against your commifed 
2. Establish  ‐ measurable marke5ng  targets and budget
objec5ves around customer  Track and measure the impact of 
acquisi5on, reten5on and value  marke5ng programs 
growth. Track and measure the execu5on of a 
marke5ng program.
3. Develop ‐ programs to support each 
Track  all the people both internal and 
objec5ve and link every program to  external, and all the steps, including 
one of these objec5ves. approvals, to understand the total cost 
4. Iden>fy ‐ every element in the  of program execu5on
marke5ng mix and its associated  8. Report ‐ effec5veness, impact, 
dollars for each program.  efficiency, value  for the money
5. Tally ‐ the investment needed for 
each program, objec5ve and outcome


Measurement is the Foundation
to ROI But
…It isn’t the only factor
1. Design and select metrics that measure 
marke5ng’s impact on the business
2. Use metrics that measure eﬃciency, 
eﬀec>veness and payback 
3. Create a measurement management 
system and consistently use it
4. Capture performance metrics as quickly as 
possible in order to ins5gate immediate 
change in execu5on 
5. Report results and performance in real 
5me


Analy>cs and the Performance‐Driven 
Marke>ng Organiza>on

Analy5cs: 
The ability to drive ac5onable 
insights from data
Cri5cal to facilita5ng befer and 
faster fact‐based decisions


Data and the Performance-Driven
Marketing Organization

Performance Driven‐Marke5ng 
Organiza5ons
 Embrace data ‐ See data as the 
founda5on for success
 Get the best data possible and use it 
in a pre‐deﬁned, unbiased way
 Install and use a data management 
system
 Create and maintain a data inventory


Three Additional Critical Success
Factors:
Culture

Create, reward and live
a measurement culture  Processes, Systems, 
Tools

Skills & Training

Solu5ons to the problems 
of marke5ng accountability 
and crea5ng a ROMI 
culture begin with training 
(ISBM)


Four Key Processes:

Establish a process that 
Do you have these processes?
enables the organiza5on to 
 Data collec5on and  make adjustments in real 5me 
analysis process
– rather than looking in the 
 Program performance target  rear‐view mirror
seqng process
Leverage industry best 
 Metrics and measurement  prac5ces and company insights 
process for con5nuous improvement 
 Repor5ng and dashboard  opportuni5es
process
Deploy processes that allow 
you to modify metrics and the 
dashboard design as needed


Take Your Accountability to the Next
Level
Create a performance measurement system based on 
data and analy5cs 
Adopt a framework that iden5ﬁes metrics that impact 
organiza5on’s economic performance and strengths 
Link  marke5ng  and the budget to business outcomes
Embrace a culture of accountability
Add the right skills, systems and tools


Marketo Demand Generation Funnel
Awareness

Inquiry
Pending

Prospect Lead Oppor‐ Cust‐
tunity omer
Recycled

Nurturing 
Database
Anony‐ Name &  Sales‐Ready Sales 
In‐Profile
mous Email / Score>65 Active


Demand Generation Model
New Customers
($5,166)
30%

25‐30 Opps. from: Opportuni5es
‐ Sales Outbound ($1,550)
12.6% of leads / 
52% of prospects eventually 
1.4 leads per opty
become a lead
 = 9% lead to opty
Leads
($140)

4.0% / month 75%

29%
Paid  30% Ac5ve Prospect 
75% Inquiries Database
($33) New Prospects
Free  ($72) 71%
25% 7.2% Inac5ve
Inquiries
50%
($0)

Demand Gen Metrics Dashboard

Prospect Lead Opportunity Win

All numbers three month averages 
© 2009 Marketo, Inc. Marketo Proprietary and Confidential (except Opportunity Sources) Page

Demand Generation Forecast
Prospects Q2 2009 Q3 2009 Q4 2009
Aug 1,824 2,500 3,050
Sep 2,668 4,250
Oct 4,500
Nov 5,200

Leads Jun Jul Aug Sep Oct Nov Dec Jan Feb
Jun 403 450 470 500
Jul 462 470 500 530
Aug 475 500 530 600
Sep 521 530 600 625
Oct 557 600 625 800
Nov 782 650 800 825

Opps Jul Aug Sep Oct Nov Dec Jan Feb
Jul 61 63 66 70 72
Aug 65 67 70 72
Sep 69 72 74 80
Oct 74 74 83 85
Nov 81 83 85 90
Forecast Actual


Lessons Learned

Today’s marketers must earn a seat at the revenue 
table
Marke5ng objec5ves and budgets must align with 
business objec5ves
Metrics should be based on outcomes, not ac5vi5es
Put the right processes in place to capture metrics and 
outcomes
Tie budget back to the business


Question and Answer

Laura PaEerson
President & Author
laurap@visionedgemarke5ng.com 

Jon Miller
VP of Marke5ng
jon@marketo.com

© 2009 Marketo, Inc.    Marketo Proprietary and Conﬁden5al Page

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