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“50% of B2B marketing executives find it difficult to attribute marketing activity directly to revenue results as a means to justify budgets.”
Yep, you’re not alone in this. With the rise of digital marketing, attribution & calculating ROI has been top-of-mind for the modern marketer, but it’s a challenge. A challenge that could potentially skyrocket your business growth, when done right.
But that’s of course the million dollar question: “How do I effectively measure marketing ROI?” And ironically enough, for multinationals with huge advertising budgets, this is in fact a million dollar question.
So let’s cut to the chase! In this article, we’ll discuss how to connect marketing spend to revenue with the help of MarTech tools. But more importantly, which KPIs are important to report on marketing ROI? And how can MarTech integrate this goldmine of insights into their application?
That’s right: if you’re running a marketing SaaS, you’re in a key position to help marketers resolve their biggest pain. Curious to learn more? Let’s dive in.
Marketing & sales are usually 2 separate teams within an organization. However, in a perfect world, they collaborate very closely to achieve sales & marketing alignment.
Now what does that mean, and why is it important? Traditionally, marketing generates leads for sales, who then qualify the leads and eventually close the deal to generate new revenue.
In that classic model, marketing is responsible for pipeline volume, whereas sales is responsible for revenue. So who is to blame if the leads are not qualitative? Exactly, that’s where sales & marketing need to work together and share input, so that leads can move smoothly through the funnel, from lead to customer.
To do so, sales & marketing need to exchange information. Sales needs marketing data: through which channel did the lead find us? Which content or pages did he visit? This helps sales to understand how ready-to-buy the prospect is.
And the other way around, marketing needs sales data: what’s the ideal customer profile? How did new customers find us? This helps marketing understand which campaigns or channels are most successful in terms of revenue.
Let’s zoom in on that topic. What are the KPIs that sales & marketing can jointly track? How can they efficiently start to measure marketing ROI?
When we’re talking about tracking marketing ROI, it basically revolves around 2 crucial metrics:
You’ll be comparing those metrics, and setting them off against other factors like marketing channel or marketing campaign. This will help you pinpoint channels or campaigns that are generating more revenue than the marketing cost. And vice versa: it will show you which marketing actions are costing you money, without generating revenue.
Ideally, you’ll also map your marketing costs across all stages of the customer journey: what’s the cost per marketing (MQL) or sales qualified lead (SQL), compared to the cost per actual customer acquisition?
If you want to get started right away, below you’ll find a useful list with all the metrics to track.
If you want to drill down on these metrics, you can further explore by mapping them against different categories. We've included a few examples below.
Now that we’ve wrapped up the most important KPIs, the time has come to visualize this raw data. How to combine all these metrics into a reporting dashboard that truly align sales & marketing teams?
The dashboard below will show you a concrete example of how you can efficiently track marketing ROI, and compare the costs with the outcome in terms of revenue.
Before we dive into this example, here are a few useful tips to keep in mind if you want to create your own ROI dashboard:
Now let’s see an example of all this in action. Start filtering the dashboard below and interact with the marketing ROI data as if it’s your own!
First of all, as a marketer you can use the marketing ROI dashboard to make better budget attributions for your marketing mix. Have a look at the chart below.
It immediately becomes clear that direct and referral traffic have translated into the highest amount of revenue.
That doesn’t necessarily mean that these channels generate the highest ROI though. If you change your chart mode to ‘100% stacked’, you can see that the ratio between budget & revenue is actually best for social traffic.
This means that if you would spend more budget on social marketing, you could potentially generate more revenue for a lower cost. In the dashboard, you can drill down on a specific marketing channel to dive into deeper insights.
Thanks to the conditional colors, you can spot in no time how that channel compares to the overall average. You can define actions for when a certain channel is performing below (or above) target. For example, cut budget on channels that surpass their Cost Per Lead target.
As a next step, you can look at the chart below to understand where you’re losing opportunities.
When hovering over the ‘lost’ section, you’ll see that most leads are lost either in the ‘Lead’ stage – which can indicate bad lead quality – or in the ‘SQL’ stage – which could indicate that the leads were not properly qualified.
A marketing ROI dashboard helps marketers & sales teams to align & to work together much more efficiently. What’s more, both marketing software providers & marketing agencies can help their end-customers with this, by offering this type of dashboard as part of their services.
As a SaaS platform for marketing, you can easily connect your platform to Luzmo’s analytics software via API & build dashboards for your users. You can then embed these marketing ROI dashboards into your own application, so your customers have insights into their marketing spend & sales outcome, directly inside your own platform.
The same goes for performance marketing agencies. Build a similar dashboard for your customers, embed it inside your customer portal, and say goodbye to manual reporting for good!
Interested to learn more about dashboards for your marketing platform? You can have your first embedded dashboard up and running in just a few days! Get in touch and we’re happy to show you.
Experience the power of Luzmo. Talk to our product experts for a guided demo or get your hands dirty with a free 10-day trial.
