Can We be Data-Driven in B2B Marketing?
Marketers would say they are making data-driven decisions, but do they?
We’re not just basing this on our own observations (although, DUH – it aligns with research). According to Gartner, 26% of decision makers do not review the information their marketing analysts provide and another 24% report that their decision makers reject their analyst’s findings in favor of gut instinct. Half of our marketing decision makers ignore data. Shocker. (<– That was sarcasm.)
B2B marketers, we need to do better. And better doesn’t mean going to an opposite extreme and becoming a spreadsheet geek with the query language skills of a data scientist. There’s a middle ground that’s practical and attainable.
How do marketers move from “cost center” to revenue generator in the eyes of their CEO? We won’t tell you it’s easy, but we know it’s possible. We’ve seen it!
So what is “data-driven” marketing?
Marketers should use data to evaluate whether campaigns are effective and adjust them accordingly. This may mean leveraging a dedicated resource on the team who is savvy with understanding which signals are meaningful and how to interpret them or this may mean helping team members incorporate more data in their day-to-day workflows.
We understand that marketing and data have a complex relationship. As marketers, we’re trying to convince humans that they need our product. Channels come and go (we’re looking at you, “X” AKA Twitter, Clubhouse, and MySpace), and what worked a week ago may not work this week. Sometimes marketing feels like placing bets on different tactics and constantly guessing what will work best.
If marketing was a science, we could use the same formula to generate consistent results month after month. We all know that isn’t how marketing works. Marketing is a combination of art, psychology, and science.
However, complexity is never an excuse to avoid trying. Too many marketers enjoy experimentation but don’t close the loop by analyzing the results and applying their learnings to future campaigns. It’s time to learn how to use meaningful signals to iterate and improve our marketing programs.
According to Zoominfo, 78% of organizations say that data-driven marketing increases lead conversion and customer acquisition. According to research, businesses that use data-driven strategies drive five to eight times more ROI than businesses that don’t.
I believe the biggest benefit of incorporating more data consistently into marketing organizations will cancel out a lot of the abuse we get from sales teams – but only if we can prove we can consistently use information to improve our programs.
Why isn’t every marketer a data-driven marketer?
So why aren’t we jumping on the data-driven train? There are so many reasons I hear, but I’ll focus on the main trends I’ve seen after working with hundreds of B2B technology companies.
#1 We’re drowning in data and lacking a gold standard.
Marketers get excited about early indicators and tend to report on early results in the boardroom rather than focusing on pipeline acquisition and revenue attainment. This frustrates the rest of the executive team and is a huge contributor to why 80% of CEOs say they don’t trust their CMO. We neglect to focus on what investors care about most: growth and profitability.
However, it’s not something we can solve easily. Sales and customer success have a linear path from first engagement to outcome and clear-cut goals people either hit or miss. They own accounts and are responsible for specific milestones.
Marketers interact with 8-10 people in a buyer committee dozens of times across at least half a dozen channels over a multi-month sales cycle. Leads are passed over to a sales organization that literally lives and dies by their number. No wonder it’s difficult to point to pipeline and bookings and say, “Marketing did that.”
#2 Attribution wasn’t the silver bullet vendors claimed it to be.
Say the word attribution, and CMOs envision a “golden path” mapped out for their team, spelling out what sequence events need to happen to inspire a person to sign a contract. They also want to run into the board room and point to a chart that proves marketing is generating more pipeline and bookings than the sales team does on their own.
Unfortunately, the people who build attribution tools see it as a campaign optimization tool – and either ignore or don’t understand that marketers are under pressure to prove their “share” of pipeline and bookings compared to other departments.
Don’t get us wrong. Attribution is a great way to optimize campaigns. There’s a reason why Dreamdata, Infinigrow, HockeyStack, CaliberMind, and others exist. At Airfleet we’re working on an attribution dashboard report based on GA4, Marketo, and HubSpot data. But getting to an attribution model is a serious investment. You’ll need analytical expertise, technical skills, and determination.
More importantly, you’ll need a realistic understanding of what attribution can and can’t do – and you’ll need to educate your executive team and set expectations accordingly.
#3 We don’t have the right resources.
Who in marketing signed up for mapping data schemas and architecting a technical infrastructure? No one. We get excited about creative, content, psychology, events, videos, and finding unique ways to connect with our target audience.
Some B2B marketing teams do have a dedicated analyst, but it’s rare that they have dedicated resources to make sure the data is structured and calculated in a way that supports what marketing needs to satisfy the CFO, CEO, and board.
Compared to B2C, B2B marketing departments are in the stone age. Because B2C marketers are in-charge of hitting the sales goal and report daily on the numbers, they often prioritize infrastructure and analytics first because everything must be measured to the penny.
#3 GDPR and privacy
We’ve covered that we don’t have a gold standard, a good solution for proving marketing’s impact, and we don’t have the right resources. We also don’t have the permission to collect data like we used to.
With privacy concerns and GDPR/CCPA on the rise, we can’t track any identifying data without permission. For the vast majority of website traffic, we’re not allowed to know who people are, what they’re interacting with, and where they are from.
Luckily for us, there are valid data sources and methods, but that’s for a whole different article.
How do we fix the marketing data gap?
There are three things we need to tackle:
- Understand which metrics should be shared with which audience
- Establish a method for measuring marketing cost efficiency
- Work cross-functionally to determine how marketing should be measured in terms of pipeline and bookings
1. Understand which metrics should be shared with which audience
As a rule:
- Individual contributors will review a litany of data points specific to their discipline. They need early indicators and they need help understanding which campaigns effectively drove pipeline and bookings so they can optimize accordingly.
- Managers should review some early indicators, but must keep their team focused on optimizing for down-funnel results. This means constantly refining target audience definitions and cross referencing which campaigns are associated with pipeline and bookings at a higher rate than others.
- Executives should only focus on a few core metrics on a weekly basis. These metrics – like bookings attainment, pipeline, leads, and conversion rates – should help them identify where the business needs the most help and direct their team accordingly.
2. Demonstrate marketing cost efficiency
It can take months to know whether a paid advertising campaign is linked to a closed won deal.
We get it!
But there are ways to estimate spend efficiency. One way is using an LTV to CAC ratio. As an alternative, look at marketing spend compared to revenue acquisition. These ratios, when viewed as a trend line over many months, will help your team understand if they are improving or getting less efficient.
Ratios are a simple but effective way to demonstrate your marketing budget is producing proportionately more revenue than prior quarters. And it gets you out of the losing game of trying to tell your CFO for how many dollars you put into a channel, how many come out immediately 🙄
3. Find a pipeline and booking methodology
Whether your team agrees to share the same goals as the sales team and to be judged accordingly or decides to battle it out and find an effective attribution model, collaboration is unavoidable. In our experience, involving finance early and collaborating with sales leadership are the only ways to land on a model for calculating marketing pipeline and bookings – or your impact on revenue.
It’s possible. We’ve seen it.
Remember, this is art and science. Not just science.
We don’t have to be 100% data driven and we don’t need every possible data point to be successful.
As marketers, we need to be able to answer:
- Is my messaging working?
- Am I using the right channels?
- Are the brand awareness campaigns hitting the right audience?
- Am I reaching the C-suite buyer personas that sign our contracts?
- Is this initiative shortening the sales cycle?
- Should I invest more in one geographic region or vertical than another?
- Are we doing better or worse than last year and why?
You don’t necessarily need a fancy tool or a full team of analysts to answer these questions, but they need to be answered. If you can answer them in a management/board meeting, you’re far more likely to gain trust and support. And THAT is always worth the effort to get the data right.
