For B2B organizations, measurement is key to creating order out of chaos – but many companies fail to exploit the full potential of measurement.
“B2B leaders are always telling us they need a better way to measure, because marketing, sales and product functions are having a hard time understanding their contributions to the business,” said Ross Graber, research director of SiriusDecisions’ Marketing Operations Strategies service, at Summit 2014 in Orlando this morning.
Apparently, Summit attendees were in sync with this statement: When asked to choose an apt description for the state of measurement in their organizations, more than half of attendees chose the option “We have multiple versions of the truth.” Around 20 percent chose “We’re pretty good within the functions, but we have challenges when it comes to measuring across them.” No one chose the option that claimed measurement is fully aligned across sales, marketing and product functions.
“In B2B today, more often than not, measurement works as a patchwork – a series of misaligned reports that don’t fit together quite right. Instead of providing clarity, they create confusion and conflict,” said Ross.
With B2B functions under pressure to prove their worth, those that can’t tie their activities to the bottom line are at a major disadvantage. With this issue in mind, Ross, along with Craig Moore, service director of Marketing Operations Strategies, introduced the SiriusDecisions Aligned Measurement Framework to the Summit audience.
The new framework is designed not only to help marketing, sales and product measure more effectively, but to create a system that integrates measurement by all three functions to demonstrate their combined impact.
“Organizations are really good at measuring at the organizational level. They’re also good at measuring at the tactical level. What they’re not as good at is the middle layer – connecting tactic-level information with higher-level organizational reporting,” said Craig. Indeed, when polled about how effective their measurement efforts are at each of four levels – executive/board, functional leader, team leader, execution – more than a third of Summit participants indicated that they’re best at measuring at the execution level.
To address this problem, the Aligned Measurement Framework translates sales, marketing and product activities into three types of common metrics. The end result is a five-level hierarchy that organizes measurement reporting so it can be easily consumed by roles at different levels of the organizational hierarchy:
- The organizational summary level summarizes performance across the marketing, sales and product, against the overall business objectives of the organization. It looks at metrics like growth, revenue, market share. “Everything you’re doing needs to align with these things; otherwise it doesn’t fit,” said Craig.
- The program level reflects performance by the impact of marketing, sales and product activities on programs (e.g. reputation, demand creation, sales enablement).
- The functional level describes the performance of departments within a function. For example, an events group may have the responsibility for creating demand as well as enhancing reputation using trade shows and customer forums.
- The tactic-type level measures the performance of all tactics in a particular category – for example, all webinars, emails, handbooks, demos, outbound calls or events.
- The tactic level measures individual tactics, which can be crucial when specific tactics are assigned high importance or receive a high level of investment.
“Misaligned measurement is a symptom of misaligned organizations,” said Ross. “Organizations that lack a common vocabulary for what they’re measuring can foster positive change by using aligned measurement to support decisionmaking across multiple functions.”