Imagine a world in which no other team tells you how to do marketing. That’s why you need to make marketing initiatives measurable.
If you are looking for an answer on how to showcase the impact of your marketing webinar, the performance of your content and more important how to highlight direct and indirect impact on sales – you came to the right website.
We will introduce you to a framework that will help you measure the impact of marketing through touched and actioned revenue. On top of that, you will be introduced to next steps to solve legacy issues in your organization to make measurement easier.
This expert article is for marketing leaders, founders, COOs, CMOs, sales leaders, revenue operations managers and those in analytics or sales strategy. You will find new strategic ideas to:
- Understand why reporting on marketing initiatives is important
- Discover how to report on marketing initiatives and which metrics to use
- Solve legacy issues and disagreements between sales & marketing
- Start using concepts such as touched and actioned revenue
- Use Revenue Operations to enable better measurement
Why reporting on marketing initiatives is important
$600 billion dollars.
That’s the amount of money all companies combined are annually spending on digital advertising according to Statista.
With global marketing spending topping $1 trillion dollars, which is as much as the valuation of Google, we are in a pickle when we are unable to measure impact.
This guide will not weaponize you with the newest techniques to do measurement online, but it will definitely give you some new ideas to think about when you are in a position today where you feel you are not fully capitalizing on all marketing effort and spend in your company.
A good revenue operations requires the understanding of:
- Marketing initiatives
- Potential sales opportunities
- Touched and actioned revenue
When your organization has silos that are blocking the communication of upcoming marketing initiatives and subsequent sales opportunities, your marketing investment will be partly wasted as your sales and revenue generating employees will not know where to take action.
As important is the other direction of the data flow. Marketing needs to understand what has an impact, how much revenue is generated and where they should allocate resources in the future in order to drive additional sales.
In 2006, Philip Kotler already wrote about ‘ending the war between sales and marketing’ and now, more than 15 years later, we are no closer to an armistice.
So, what’s not working? The answer is simple, but the solution is less so:
- Externalization of failure, internalization of success
- Lack of communication to understand opportunities
- Lack of reporting to understand success
Reading these blockers, one might think the solution is straightforward: we need to break down silos and set up data streams between the two (sales and marketing) departments. It’s a correct conclusion, but legacy, incentivization and historical organizational structure is not creating the right environment to do so.
Here’s why in more detail:
Sales and marketing legacy
In-group cohesion has made the ‘war between sales and marketing’ inherently biased and we love to strengthen that bias. Think of all the times you heard ‘marketing is not supporting us’ or ‘sales trying to say what marketing needs to do’.
Sales incentivization
Sales is often not incentivized to drive marketing initiatives forward (inviting clients to events, getting new newsletter subscriptions etc.) and marketing often doesn’t receive sales-driven commission
Historical organization structure
Marketing rolls up to the CMO and sales to the COO. Organizations often lack a senior leader, such a revenue operations manager, that can build a bridge between the two organizations aligning communications and plans.
These blockers are preventing your capability to increase the return on investment of the budget invested in marketing and define the right marketing initiatives to get the most revenue from its resources. Let’s see what you (theoretically) can do better.
How to report on market initiatives and metrics
Before you keep on reading and expect a cure to solve all of your sales and marketing problems, I want to come back to the last line of the paragraph above. Let’s see what you theoretically can do better. Theoretically.
The reason I emphasize theoretically (did it again), is because the below is not solving your legacy, incentivization and historical structure. Your organizational design is heavily dependent on your company and changing it can take multiple years.
When these issues are deeply embedded in your culture, your success following these practices ain’t written in the stars. Therefore, it’s theoretical: it’s assuming you have a blank sheet to start again.
Solving legacy and pointing fingers
The core to solving legacy, pointing fingers, the externalization of failure and the internalization of success, is data. Instead of having an emotional argument about what works and what doesn’t work, both departments need factual common metrics in order to make a point.
This can be solved by process design. Marketing should have the ability to create marketing driving opportunities for sales teams and sales teams should execute on these opportunities which should translate into results. These results should be passed back to marketing in a reporting and feedback loop.
If this is not happening in your organization, you have a problem. The reason you have this problem is process design or incentivization (but that’s the next topic).
To achieve this process design, marketing needs:
- A systematic approach to create opportunities
- Collaboration with sales to set input metrics
- # of opportunities created
- $ value of opportunities created
- % of opportunities pitched
- % of opportunities closed
- Reporting coming from sales on
- Touched revenue
- Actioned revenue
- Analysis of the data to decide future strategies
Most of these topics can be resolved through Revenue Operations and Sales Strategy & Operations in combination with Marketing.
By creating such a systematic approach, marketing will be forced to think about target setting (and accountability) outside of their department. Apart from their own metrics (attendees, subscribers, etc.) they will need to set metrics for stakeholders following up on their initiatives: sales input metrics.
Sales on their end have to accept to attribute value to marketing with the concepts of touched and actioned revenue.
Touched or assisted revenue
Touched or assisted revenue is the concept in which value (mostly revenue) is attributed to marketing while keeping in mind there are other touch points (sales) that had an impact.
Example: Touched or assisted revenue
Sales is pitching a new feature while marketing on their end is later organizing a webinar about the feature. After the webinar, the customer adopts the feature leading to 20% increase in revenue.
This is where the conflict starts: sales claiming it’s because of their pitching the client adopted the feature while marketing claiming it was the webinar.
To solve this, marketing can classify the uplift in revenue as ‘touched revenue’ when a client attended the webinar and it can do so as long as a customer adopts the feature within x amount of days after the webinar.
Now sales on their end can calculate the total uplift revenue of all people that adopted the feature regardless of them attending the webinar. The difference between the two is touched revenue or the revenue that was assisted by marketing.
Actioned or direct revenue
Actioned revenue is when there is only one channel involved for one specific action taken by the customer (although possibly assisted by another channel). An example here would be a person attending a webinar of your company and bought your product or service without speaking to sales.
Example
Consider a lead with a $10,000 budget. The lead fills in a lead form and talks with a Sales Development Representative. A couple of days after the conversation, the lead is invited to a webinar. The lead attends the webinar and decides to raise its budget to $12,000, makes the decision to go forward and buy your product.
| Revenue | Lead form & SDR | Lead attending webinar | Purchase of your product |
|---|---|---|---|
| Actioned (sales) | $10,000 | $0 | $10,000 |
| Touched (marketing) | $0 | +20% | $12,000 |
| Actioned (marketing) | $0 | $2,000 | $2,000 |
TL;DR: the better your capability of attributing factual data to the channels (separately and combined), the easier it will be to avoid pointing fingers.
Incentivization
Truth be told, the above will never work without the right incentivization.
In most organizations:
- Marketing is not incentivized to keep sales responsible for execution
- Sales is not incentivized to execute on marketing asks
This drives frustration and you can’t blame anyone for it (except leadership).
Getting incentivization right is easier, but it requires the right reporting and metrics, as the only thing more frustrating than not getting a bonus is seeing someone else get a bonus for your work. This destroys both extrinsic and intrinsic motivation.
Once reporting is accurate, leadership needs to tie marketing compensation and target setting to sales outcomes. This can be done by going beyond clicks, attendees and subscriptions – and include activations, product adoptions and touched and actioned revenue.
Sales on their end need to get incentivized to action on marketing opportunities. This can be done by creating OKRs around following up on marketing opportunities (input metrics) or driving a competition or sales program incentive on top of normal compensation and revenue driven commission.
It’s important to note here that just simply throwing money at sales for doing the ‘basics’ of their job is risky. First of all, it can become an acquired right (which will dilute the incentive itself) and secondly you want to prevent people from cheating the system.
Being smart with incentives is key and so is a rigid quality assurance team or a controlling power. It’s similar to most democratic political systems:
- No one should take their power for granted
- No one should be able to push their bill without control
- No one should assume absence of corruption
In an organization the same holds and its success mostly boils down to your ability to report on operations. Sellers won’t take the risk to cheat on administration or input when it can influence their next promotion and they will never turn down the opportunity to earn more money.
* OKRs = Objectives and Key Results
Historical structure and communication
Solving your organizational structure and the need for it, is your internal kitchen. But regardless of your willingness to solve it, having an individual (or team) that can bridge sales and marketing better is never a bad idea.
This team can be your Revenue Operations team, given the bridge will allow you to:
- Design a process accessible for both teams
- Align reporting between sales and marketing
- Facilitate the communication between stakeholders
And the fact that being this bridge will help them obtain their targets:
- Increasing revenue
- Increasing productivity
- Decreasing cost of revenue
What Revenue Operations can do to support marketing
RevOps Objective: Collective process design and reporting
If you want to succeed in burying the hatchet between sales and marketing, you will need to be able to empower both teams to work out of a shared source of truth. To do so, your Revenue Operations Manager needs to think out the requirements for a process allowing information to flow from and to marketing.
This means scoping out a process allowing to:
- Communicate between (a part of) MarTech and sales stack (mostly your CRM)
- Create, assign and showcase opportunities for sellers including next steps
- Send back reporting on input and output metrics to marketing
Your Revenue Operations team will drive the (technical) implementation of such a process involving their stakeholders.
This single source of truth, preferably your CRM and/or SEP given sales works out of here, will remove any emotional argument between the two parties. If it doesn’t exist in the system, it didn’t happen. It also allows for automation to remove human intervention, which is prone to errors, and save your organization time.
If you are now thinking: ‘all good and well, but this is a utopia, we will never be able to do this’ you either need to hire better people, facilitate collaborative communication between marketing and sales, or reconsider your own willingness to solve the issue.
This is, 100%, possible. The main reason it often doesn’t become realized is because of departmental ego and incentives (aka willingness to solve the issue).
Example: Not aligned process design
Marketing organizes an event about a new product feature X and collects registrations through Eventbrite. Sales will be tasked with pitching feature X after the event and needs to adapt its sales pitch based on warmth of the lead (e.g. attended vs. registered). Product marketing created these sales pitches.
What happens in most organizations, and potentially yours is:
- Marketing shares an Excel after the event with random attendance data
- Excel is shared with sales and they need to find their clients
- Sales has no idea when to use which pitch deck and copies of copies go around
- Opportunities are created in the CRM with ambiguous names
- Marketing has no insight on how much revenue was generated by the event
- Marketing blames sales
- Sales disliked the extra time consuming task as it didn’t help achieving their bonus
- Sales blames marketing
How many of these steps do you recognize?
The easiest way to solve this, which is not going to sound easy at all, requires two things:
- An API
- Willingness to talk
That’s maybe a bit over simplistic, but in general it does come down to that.
Sales and marketing could be aligned on a unique identifier (for example: email address) between the event registration platform (marketing) and the CRM (sales). They would collectively agree on the minimum data necessary (for example: attendance).
Next a well-designed process and API could generate opportunities linked to the unique identifier based on attendance data in the MarTech directly into the CRM. While populating these opportunities, the material to be used (pitch deck) and pitch tag (for measurement) is added to the opportunity. Sales works through the opportunities and marketing is able to report the metrics defined in the previous section.
Example: Aligned process design
Marketing organizes an event about a new product feature X and collects registrations through Eventbrite. Sales will be tasked with pitching feature X after the event and needs to adapt its sales pitch based on warmth of the lead (e.g. attended vs. registered). Product marketing created these sales pitches.
The situation changed now:
- Opportunities are automatically created with attendance data and pitch decks (API)
- Marketing can measure the success of the opportunities in a shared report (API)
- Sales will pitch opportunities with minimum wasted time (willingness)
Again, how many of these things do you recognize?
Or better, how many of these things would you love to recognize?
1. Marketing & Sales Process Design © SlideFill 2024
If you don’t – you know where to invest:
- An API
Willingness
Revenue Operations
RevOps Objective: Communication and incentivization
Organizations that truly aim to achieve the best results, will need to set up the right communication and incentivization. That means, alignment to thrive, clear communication lines and rewards linked to achievement.
RevOps plays an important role here, as they have a common goal that’s overarching sales, marketing or customer service: they want to generate revenue at the lowest cost in order to drive profitability. Given their ‘target’ is not linked to a book of business or one specific function/scope, they can benefit from investing time and resources in building a bridge between sales and marketing.
The ability of an organization to communicate between marketing and sales often doesn’t fail at the highest level – most CMOs and COOs can be easily put in one room.
The struggle is coming from a power play happening on a lower leadership level, where the sales lead for a fraction (for example: Canada) is not interested in the marketing activities for the whole of the region (for example: North Americas) where Canada is not the highest priority.
This is the frontline of the battle: the perception of sales failing to see the value that can be created by marketing initiatives designed for a region, for their specific fraction, and the perception of marketing failing to invest relatively low resources in involving the fraction of the region.
As Revenue Operations is inherently interested in listening to any opportunity that can generate additional value, they can create a bridge between marketing and sales by identifying how the initiative can have an impact on the fraction and communicate that value to sales.
In more serious terms: your Revenue Operations Manager can create economies of scale from marketing initiatives by facilitating spillover effects to more stakeholders. In doing so, they should try to prevent putting additional short-term burdens on marketing itself.
Burdens should either have a long-term positive impact on marketing or they shouldn’t be asked. This showcases your true personal investment and not simply your involvement for personal gain (which will decrease willingness to collaborate over time).
Now Revenue Operations has defined these spillover effects, the second play is incentive. As everyone who ever read a page in a book about psychology knows, there are two types of motivation: intrinsic and extrinsic.
Influencing intrinsic motivation is always a difficult one in a corporation, as most people, myself included, work in order to afford a fulfilling life. This is in its core an extrinsic motivation.
That said, it doesn’t mean one cannot be passionate about what they are doing. The ability to create value is something that gives intrinsic motivation to a job.
So the first important communication and incentive that needs to be set up is motivation related to the fact that supporting this initiative will create value. This reflects on the individual involved: they will be able to create value. This value creation in itself is an incentive and likely one of the more powerful intrinsic incentives in your arsenal.
The second group of incentives to drive sales to execute on marketing incentives are extrinsic:
- Linking the marketing initiative to target achievement (commission)
- Linking the marketing initiative to a prize (award, recognition bonus etc.)
- Linking the marketing initiative to minimum requirement for performance (promotion)
To be able to do these incentives, you have different needs going back to two concepts you read about before:
- The ability to showcase value (spillover effects to a fraction)
- The ability to report on value (reporting) to have correct incentives
And that ability, to go full circle, goes back to: process design, reporting and communication which RevOps can facilitate from start to finish.
Frequently Asked Questions
Before you head to the conclusion of this article, you can find answers on frequently asked questions related to how you can improve measurement of marketing initiatives:
Incentivization is a critical factor in aligning sales and marketing efforts. The guide identifies common challenges in many organizations, where marketing is not incentivized to support sales execution, and sales is not incentivized to actively participate in marketing initiatives.
The first step in addressing this issue involves accurate reporting and metrics. The guide argues that without the right reporting and metrics, incentives lose their effectiveness. Therefore, organizations need to ensure that they have a clear and factual understanding of the impact of marketing initiatives on revenue.
The guide introduces two types of revenue attribution: touched revenue and actioned revenue. Touched revenue recognizes the collaborative efforts of both marketing and sales in driving revenue, while actioned revenue represents revenue generated through specific actions or channels. By accurately attributing revenue to these categories, organizations can create a fair and transparent system for incentives.
Incentivization should align with the overarching goal of generating revenue at the lowest cost to drive profitability. For marketing, this may involve tying compensation and target setting to sales outcomes. This goes beyond traditional metrics like clicks and attendees, including activations, product adoptions, and both touched and actioned revenue.
Sales, on the other hand, should be incentivized to actively engage with marketing initiatives. This can be achieved through various means, such as setting up Objectives and Key Results (OKRs) around following up on marketing opportunities or introducing sales programs and competitions. The guide highlights the importance of being strategic with incentives, avoiding the risk of incentives becoming an acquired right or leading to unethical practices.
A significant aspect of incentivization is linking it to reporting accuracy. Inaccurate reporting can lead to frustration and demotivation among teams, as individuals may perceive their efforts as undervalued. Therefore, leadership needs to tie marketing compensation and target setting to accurate and transparent reporting.
In conclusion, incentivization plays a pivotal role in aligning sales and marketing efforts. By accurately attributing revenue, setting up clear incentives, and tying compensation to outcomes, organizations can motivate both teams to collaborate effectively, ultimately driving revenue and profitability.
Find more answers related to making Marketing Initiatives Measurable
Discover all frequently asked questions and answers about Measuring Marketing Initiatives.
Revenue Operations (RevOps) plays a crucial role in supporting marketing efforts by facilitating collective process design, reporting, communication, and incentivization between sales and marketing teams.
The first objective of RevOps is to enable a collective process design that allows information to flow seamlessly between marketing technology (MarTech) and the sales stack, typically facilitated through a Customer Relationship Management (CRM) system. This shared source of truth ensures that both sales and marketing teams have access to the same data, eliminating discrepancies and fostering collaboration.
RevOps also focuses on creating, assigning, and showcasing opportunities for sellers, including defining next steps. By standardizing this process, RevOps helps bridge the gap between marketing-generated opportunities and sales execution. This alignment ensures that marketing initiatives translate into tangible results, and the feedback loop allows for continuous improvement.
The second objective is to enhance communication and incentivization. RevOps serves as a mediator between sales and marketing, aligning reporting practices and metrics. This alignment eliminates the need for subjective arguments and externalization of failure, fostering a collaborative environment.
To achieve this, RevOps managers work towards scoping out processes that enable effective communication between MarTech and the sales stack. This includes defining communication channels, input metrics, and output metrics that support reporting on both marketing and sales initiatives.
One of the critical roles of RevOps is to drive the technical implementation of these processes, involving stakeholders and ensuring that the necessary technologies are in place. The emphasis is on creating a single source of truth, often the CRM system, which becomes the central hub for accurate and real-time data. This not only streamlines communication but also allows for automation, reducing the risk of errors associated with manual intervention.
RevOps serves as a catalyst for breaking down silos by focusing on the technical implementation of processes that facilitate collaboration. The guide stresses the importance of removing emotional arguments and subjective assessments, emphasizing that if an action or data point is not recorded in the system, it essentially didn’t happen.
The example provided illustrates the impact of misaligned process designs. In a scenario where marketing organizes an event and shares attendance data via Excel, sales faces challenges in identifying clients, using pitch decks, and creating opportunities in the CRM. This disjointed process leads to frustration, blame-shifting, and a lack of insight into the actual revenue generated from the event.
In contrast, an aligned process design, facilitated by RevOps, leverages technologies such as APIs to automate the creation of opportunities with attendance data and pitch decks directly into the CRM. This not only saves time but also ensures that both sales and marketing have clear visibility into the success of the opportunities generated. The shared report becomes a valuable tool for measuring the impact of marketing initiatives and improving future strategies.
The guide acknowledges that achieving this level of alignment might seem utopian for some organizations. However, it emphasizes that the success of these initiatives is not solely dependent on the complexity of the technical implementation but also on the willingness of the organization to address cultural barriers, departmental ego, and historical issues.
RevOps managers play a pivotal role in driving these changes by identifying requirements for processes, collaborating with stakeholders, and overseeing the technical implementation. The guide encourages organizations to recognize the feasibility of these changes and suggests that the main roadblocks often arise from a lack of willingness to address the underlying issues.
In summary, Revenue Operations serves as a linchpin in supporting marketing efforts by driving collective process design, ensuring accurate reporting, and facilitating communication and incentivization between sales and marketing. By leveraging technology and aligning processes, RevOps contributes to breaking down silos and creating a collaborative environment that enhances the effectiveness of marketing initiatives.
Find more answers related to making Marketing Initiatives Measurable
Discover all frequently asked questions and answers about Measuring Marketing Initiatives.
RevOps Managers play a pivotal role in setting up personalization for data-driven presentations. Their objectives include:
- Deciding Processes for Data-Driven Presentations: Revenue Operations should identify and prioritize processes that require personalized presentations based on factors such as customization needs, organizational readiness, efficiency gains, and data availability.
- Creating Triggers and Templates Using Variables: Managers should collaborate with teams to define input parameters for personalization. This involves deciding which variables and data points will dynamically replace content in marketing collateral or sales decks. Triggers and templates should align with the customization needs of specific activities.
- Empowering Sellers: Revenue Operations Managers should make data-driven presentations and templates accessible to sellers. The approach can be centralized, allowing for global alignment and brand consistency, or decentralized, offering regional teams more flexibility. The decision depends on the balance between brand control and regional relevance.
By fulfilling these objectives, Revenue Operations Managers facilitate effective personalization, ensuring that content is tailored to specific clients’ needs while optimizing brand consistency and global scale.
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Legacy issues and disagreements between sales and marketing often stem from ingrained cultural biases, misaligned incentives, and historical organizational structures. To overcome these challenges, organizations must focus on data-driven solutions and process design.
The core strategy for resolving legacy issues involves adopting a systematic approach to process design. This means creating clear communication channels and feedback loops between marketing and sales. The guide suggests that marketing should take the initiative to generate opportunities for the sales team systematically. Sales, in turn, needs to execute on these opportunities and provide feedback on the outcomes.
The guide emphasizes the importance of common metrics and reporting practices to eliminate subjective arguments and finger-pointing. By establishing a reporting and feedback loop, organizations can ensure that both sales and marketing have access to factual data about the impact of their initiatives. This process design facilitates accountability and helps build a collaborative environment.
An essential aspect of this process is the classification of revenue into two categories: touched and actioned revenue. Touched revenue recognizes the collaborative impact of both marketing and sales efforts, attributing value to marketing initiatives that contribute to eventual sales. Actioned revenue, on the other hand, represents revenue generated through a specific channel or action, such as attending a webinar.
To achieve this, organizations need to implement Revenue Operations (RevOps) and Sales Strategy & Operations in collaboration with Marketing. RevOps becomes a crucial player in aligning processes, metrics, and communication between sales and marketing. This includes setting up a shared source of truth, often a CRM system, where both teams can access accurate and real-time data.
The guide acknowledges that implementing these changes may face resistance due to organizational culture and entrenched practices. However, it asserts that the theoretical solutions presented are viable if organizations are willing to invest in the necessary changes. The guide also underscores the role of a revenue operations manager as a bridge between sales and marketing, facilitating the necessary changes to enhance collaboration and eliminate legacy issues.
Find more answers related to making Marketing Initiatives Measurable
Discover all frequently asked questions and answers about Measuring Marketing Initiatives.
Reporting on marketing initiatives is crucial because it provides organizations with the necessary insights to measure the impact of their marketing efforts. In a world where companies collectively spend billions on digital advertising, understanding the return on investment (ROI) is essential. The inability to measure this impact can lead to significant portions of marketing budgets being wasted. To avoid such pitfalls, organizations need to have a comprehensive understanding of their marketing initiatives, potential sales opportunities, and the revenue generated from these efforts.
The measuring marketing guide emphasizes the importance of breaking down silos between sales and marketing, a longstanding challenge highlighted by Philip Kotler over 15 years ago. The lack of effective communication and reporting mechanisms between these two departments results in an externalization of failure and internalization of success. Without common metrics and reporting practices, both teams may resort to subjective arguments, hindering collaboration and overall organizational success.
To address this, a systematic approach to reporting and communication is proposed. The focus is on creating a shared set of metrics that both sales and marketing can use to evaluate the success of their initiatives. This includes metrics such as the number and value of opportunities created, percentage of opportunities pitched and closed, and various revenue metrics. By aligning on these common metrics, organizations can foster better collaboration, break down silos, and optimize their marketing ROI.
However, it’s essential to acknowledge that implementing these changes is not a quick fix. The guide recognizes that deep-rooted issues related to legacy, incentivization, and historical organizational structures can pose significant challenges. Therefore, the proposed improvements are presented as theoretical solutions that assume a blank slate. The reality of implementing these changes may require a gradual shift in organizational culture and a commitment to overcoming resistance to change.
Find more answers related to making Marketing Initiatives Measurable
Discover all frequently asked questions and answers about Measuring Marketing Initiatives.
Conclusion
What’s next for you
To enable your organization to take customer service seriously and grow revenue up to 7% while increasing client retention, you need to define your customer satisfaction strategy.
These are the best first three steps to create customer success:
1. Move to actioned and touched revenue
Start linking back any marketing initiative or expense to actual outcomes in terms of revenue or sales. It will help you to calculate the return on investment of your marketing plans and make your marketing department more impact focused.
2. Improve measurement capabilities and visibility
Increase your measurement capabilities of marketing initiatives such as webinars, content and events. Ensure that other teams including sales have direct access to impactful metrics of marketing.
3. Implement the right incentives for teams dealing with marketing
Rework the structure of your organization and remove legacy blockers. Create the right incentives for both marketing and sales to motivate the different teams what’s really important for your organization.
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All examples are illustrative and fictional.
