For B2B marketers, marketing sourcing of new deals has long been held up as the primary measure of success. It’s true that most organizations also recognize marketing’s ability to drive brand awareness, shape market perception, and provide resources that enable success within other business functions. Driving demand, however, is clearly job number one for most B2B marketing teams, and the most commonly used metrics for leadership evaluation continue to be marketing-sourced pipeline and revenue.
My colleague, Ross Graber, has been writing on this topic for years, and his most recent blog details these reporting trends and lays out a strong case for ditching sourcing metrics. His piece outlines a number of ways in which sourcing fails to understand B2B buyers, misplaces marketing focus, and erodes internal alignment. I’d like to approach this same topic from a somewhat different angle. Why are CMOs accepting a primary measurement of their success that is so clearly stacked against them from the start?
Marketing Sourcing Is A Losing Hand For CMOs
Chief marketing officers live their life on the hot seat. According to the annual CMO Tenure Study conducted by the leadership advisory firm Spencer Stuart, the average tenure for a CMO has fallen to only 40 months — the lowest the firm has seen in a decade. Why, then, would an organization embrace a metric to judge CMO performance that provides such limited insight into marketing contribution and often promotes conflict between functions?
Marketing Sourcing Reflects A Small Fraction Of Typical Marketing Efforts
Sourcing depends on claiming credit for deals that originated from marketing activity. Demand marketing as a whole makes up only a third or less of a typical marketing program budget. It doesn’t reflect any efforts to build reputation, engage existing customers, or enable internal stakeholders. Even within demand, sourcing can only be generated by tactics that lead to a tracked interaction with a known individual, ruling out most digital marketing interactions involving anonymous visitors.
Within the small subset of marketing work that can be tracked to individual responses, sourcing only credits interactions with prospects that have not yet engaged with a salesperson — and only the first of those! Why would any CMO want a primary metric of their job performance to be based on such a small sliver of marketing’s planned activity?
There Is No “One Shining Moment” In B2B Buying And No Collaborative Way To Claim Credit
At its core, claiming that any deal was sourced by marketing depends on a set of arbitrary assumptions that don’t reflect the related impact of interactions with both marketing and sales across a buying cycle. It begins with the idea that there was a specific interaction — one shining moment — where an individual from a company interacted with a piece of marketing content that transformed their organization from an unknown into a viable prospect.
When you consider the reality that B2B buying cycles can stretch into years, multiple decision-makers drive purchases, most interactions with marketing messaging are anonymous, and salespeople often nurture relationships long before there is a deal in the pipeline, the level of unearned certainty behind many claims of marketing sourcing begins to border on magical thinking. Trying to claim “credit” for delivering a B2B sale often leads to divisive conversations and disputes around both definitions and accuracy. And there are few better ways for a CMO to get fired than by undermining alignment between sales and marketing.
Marketing Sourcing Is Designed To Go Down!
If the previous arguments weren’t enough to make you question the viability of sourcing as a metric for CMO performance, consider that it is also a measure that by definition is expected to go down over time. Successful marketing means that your organization is building relationships with potential buyers in your target market. Many will become customers, while many more will develop ongoing relationships with a sales rep.
In both cases, it becomes increasingly difficult to claim marketing sourcing on any future deal because tracked interactions with sales will predate your current marketing efforts. According to Forrester benchmark data, roughly three-quarters of B2B revenue comes from existing clients. When we support clients with their marketing measurement, we typically see less than 10% of customer revenue sourced from marketing because of their ongoing relationship with sales. The deeper your penetration into a market, the lower the expected sourcing percentage becomes. In order for an established CMO to even maintain existing sourcing levels, they will need to continually expand the pool of potential new buyers.
Selling new products into your existing customer base rarely qualifies as marketing-sourced, so expansion into new markets — and the likely decrease in ROI associated with marketing to prospects who are less familiar with your product — becomes necessary to maintain expected levels of output. When the strategic priority for the organization requires focusing on established markets, a CMO measured on sourcing metrics will quickly find themselves in a jam.
It’s Long Past Time To Change The Conversation
In order for a CMO to ensure that they are being evaluated fairly in regard to marketing’s performance, it is critical to reframe the conversation around a more broad and accurate understanding of the ways in which marketing supports a business. Forrester analysts work regularly with clients to help them build better marketing measurement. Existing clients can access extensive research on the topic, beginning with Ross’ key report, Beyond Sourcing: The Case For New Marketing Performance Indicators.
It’s critical for B2B CMOs to make sure they are telling the true story of marketing’s contribution. This requires broadening our view of the value that marketing provides and moving away from narrowly focused metrics that are ill-suited to driving long-term success and are often at odds with achieving sales and marketing alignment.