Marketing Performance Management (MPM)
December 30, 2016
With the coming of 2017, marketing communities confronted the age-old question of what this year’s dominant theme will be. A few years ago, predictive analytics was all the rage. 2016 people will say it was ABM, one-to-one relationships or managing the customer’s journey. However this year the continuous focus has been, year after year, revenue. This is where marketing performance management comes in.
The truth is, when a CMO is preparing for the year ahead, the latest tactical trend isn’t nearly as important as continually focusing the year, and during the year, on how best to optimize Marketing’s contribution to revenue and business goals.
As we entered into 2017 all the roads lead to marketing performance management. There are 5 key changes that are occurring in our business environment that will make marketing performance management a greater priority than before; even for a B2B organization.
Here are five great ways that B2B marketing will change in 2017: Greater scrutiny over marketing investments.
1. Greater Scrutiny Over Marketing Investments.
Up to 12% of revenue has risen already in 2017. Marketers should be prepared for the greater scrutiny over their budgets, they must be ready and able to answer any and all questions related to planning and returns. Some questions that may be asked them are:
- How are you planning to deploy available budget? On what, where and when?
- How does what’s actually occurring compare with that plan?
- In what ways are you underfunded, and how does that compare to external benchmarks?
- How many inquiries/leads/opportunities did your campaign tactic generate?
- What tactics and combinations are working the best?
2. Addressing the True Data Challenge: CONTEXT
It is a challenging time to be in B2B sales and marketing. With all the competition and noise it is harder than ever to get prospects on the phone or to respond to emails, let alone on social media platforms.
Yet prospects are still buying software, providing that we are blind to what is working on the journey that our customers take towards a purchase. This is a constant struggle as to where we should allocate our marketing dollars.
The massive amount of information collected has created a larger challenge than ever before in some ways. More doesn’t necessarily mean better – sometimes it just means more. You need to determine context and prioritize it. Organizations often keep investment data and result data separate, as they live in different systems, or worse, in different spreadsheets. This leads to confusion, misinformation, and guesswork.
In 2017, marketing organizations must take steps to clarify what investments lead them to results.
3. The Changing Role of the CMO
The expectation today is for CMOs to prove business impact with confidence. Those who are unable to do so will be out of a job; those who are able to do so will become business leaders in their company, taking on a more strategic role across the entire businesses.
CMOs won’t just be talking about earning a seat at the executive table. Successful CMOs will be helping to lead a groundswell of companies that realize they can’t just be great product organizations; that they need to be great marketing organizations.
In this year, CMOs will understand that they can’t just be great marketing leaders; they must also be great business leaders who can truly run the business of marketing.
4. A Changing Budget
What and where marketers spend their money on is a strong indicator of what’s driving results across the industry.
Did you know that marketing techs comprise 33% of the marketing budget? 35% is allocated to labour and 32% to streamline marketing services, such as advertising, paid search, and consulting.
Though for B2B marketers we also used to see a general breakdown of roughly 40% spent on people and 60% on programs and technology, the advent of more personalized tactics such as ABM is driving a more equal, 50/50 split.
Marketers are looking at adding all sorts of different types of talent, not just more programs, because of the rise of a more-targeted outreach. Because of the ever-changing dynamics of our marketing organizations, more money is going into digital-oriented talent. That means more content, marketing, product marketing and more targeted individualized approaches.
5. Marketing Compensation in Alignment with Sales
With the rise of marketing is no longer an island unto itself. In 2017 the relationship between the CFO and CMO will be the one that’s interesting to watch.
Marketing compensation is the perfect example of the shift in aligning with sales. There’s much more incentive for the marketing organization to align with the sales organization. In 2017 marketing accountability will be tied to the impact and results of marketing activities on business goals.
That means compensation for Marketing’s ability to drive Sales-accepted leads, individual sales activity, overall bookings, and overall Sales and Marketing targets. It’s truly about putting your money with your mouth is; and though it may seem unfamiliar to many organizations, it’s an important evolution in building revenue-driven teams and processes.
This year is going to be an interesting phase in B2B marketing, are you ready?
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