We caught up with our CEO, Charlotte Graham-Cumming, during a brief respite between meetings, knowing we’d get her attention when talking about marketing metrics. There’s always a lot to say about this topic in the office!
Why are marketers so stressed about metrics?
Marketing has always been at the sharp edge of metrics; being caught between sales, management and the customer is never an enviable place to be. The prevailing logic is that every year tech companies increase the budget and raise the volume of leads they expect.
What’s wrong with that?
For a start, it’s the wrong way to look at it. If your technology solution has a very specific set of criteria that only fits 50 companies in the UK and you’re told you need to generate 800 leads due to some arbitrary target set by someone outside of marketing, that makes no sense.
If you’ve not sized the market sensibly then everyone’s in trouble. We’ve all seen those people on Dragon’s Den who say “there are 70m people in the UK and if only 1% of people buy my product, I’ll be rich”, and we all shake our heads. But that’s exactly what many tech companies are doing every day.
For example, I see so many companies who want to target retail in the UK. They have hugely inflated lead generation expectations for what is a tiny market relatively speaking, and highly competitive. When you dig into ROI, you only often need 2-3 opportunities to drop from a campaign to hit pipeline contribution targets, so why not target better and deeper? I’m talking primarily here about enterprise selling.
So why don’t people do that?
Because you have to be brave to stand up and say, “I know you’ve given me a target of 800 leads but I’m only going to generate 100.” This is extremely difficult when you have a pure numbers mindset at the top, and a numbers-hungry sales leadership with old fashioned, and unwavering, views on how leads should be generated. Sounds harsh, but as much as one tries to educate people that the landscape has changed (I’ll talk about how it’s changed shortly), there’s still a mindset of “well, just get me leads”.
You need to read Alchemy by Rory Sutherland to really understand why the prevailing logic can be misguided.
Throw a VC into the mix and the problem increases even further. They understand numbers because they are financiers. I’m not naive enough to think this isn’t important – of course it is. However, successful marketing has always been a mix of science and alchemy because it’s ALL about human behaviour.
Pipeline contribution over time should be the only measure that anyone outside of marketing should care about, leave it to the marketers to worry about and manage the funnel. Funnel behaviour has changed so much and is largely illogical now, so trying to apply science to it is time consuming and not very effective. Using it as a stick to beat marketing with is also not helpful. Straight line conversions are a thing of the past.
So what has changed that’s made this situation worse?
Forrester said in 2021 that there are 27 touch-points needed to close a deal. Just say that out loud: 27!
What that means is that when you have a marketing and sales process that isn’t 100% collaborative and jointly planning those 27 touchpoints, you’re already losing. Sales have to get involved much earlier in the relationship building process, and in a much softer way than before, which in a traditional tech sales environment can be challenging to shift to, particularly if the leadership are also traditional in their approach and had their success when the market was in a different place.
What doesn’t help either is that probably as much as 75% of those touch-points happen in the “dark funnel”, meaning people don’t want to alert you to the fact they are engaged. Precisely because they are used to sales people approaching them too early and people hate being sold to.
But people do like to get help, so the only way to win in the dark funnel is to share content that’s not gated, and try explaining that to a numbers driven leadership team that just wants leads and doesn’t care about engagement. Even though engagement is the greatest indicator of intent.
What does work?
When leadership, sales and marketing are working together as one. Embracing diversity of approach across these three stakeholder groups not only drives alignment but also puts a more realistic picture into place.
We see it time and again, when leadership focuses more on the types of companies being engaged, and the relationships being developed within each account.
Rather than spreadsheets full of conversion metrics that try to paint a pretty picture for the QBR, meaningful conversations are had about developing opportunities in accounts that on average, have a higher pipeline contribution and drive more profitable relationships.
The old model has been in place for 30 years, so I don’t expect it to change anytime soon, but it’s nice to be asked to be honest about it! We of course have to support how life actually is for marketers, so metrics are crucial, but they need to be looked at alongside the other things I’ve mentioned here, so that the value of marketing is not overshadowed by a poorly performing quarter.
If you’d like help generating good quality leads that convert, we’d love to talk. Drop us a message here.