Marketers are increasingly on the hook for proving their value. Most marketers have elevated their reporting beyond campaign activity, to focus on revenue impact — the real goal. In fact, 72% of marketers say they report on revenue impacts. However, only 25% of all marketers are more than somewhat confident in those numbers.
As marketing budgets grow, so too must our ability to show accurate value from those investments. Best-in-class marketers have moved past ROI and adopted these three new methods of marketing reporting: weighted pipeline, satisfaction, and lifetime customer value.
Weighted Pipeline Shows Future Outcomes
ROI reporting faces a major problem; it is not a predictive or prescriptive metric. Best-in-class brands have begun to measure pipeline as a better way of showing revenue impacts of marketing. Here is how it works:
The weighted pipeline (WP) examines each member of your brand audience and the likelihood for each to convert into revenue at a future point in time. It breaks your entire customer journey down into stages, so you can see how your leads are moving through it. This allows you to accurately see current demand and project future outcomes.
Below is an example we created of a weighted pipeline.
|Net New Pipeline Total||290||54 days||Net New Pipeline
WP produces three major metrics marketers should focus on: total volume of the pipeline; the average velocity; and efficiency of the journey. When a marketer can affect any one of those three measures, there are significant business impacts. For example, by increasing the efficiency of each stage across a three-stage funnel by just 1% at each step, total net revenue increases by 28%!
The primary benefit of WP is that it gives executives a clear view of their future. They know how much business will be coming in and can begin to see marketing in a new light. Weighted pipeline is a radical new way of showing value, but it does take some time to understand.
Satisfaction Scores Measure The Experience
The 2018 “State of Marketing” report found high performing marketing orgs are 1.5X more likely to track satisfaction scores than their counterparts.
Where WP shows major trends, satisfaction scores offer more granular insight into which experiences you should work on and at what points. There are many available methods for tracking satisfaction scores, including the popular Net Promoter Score (NPS) and Customer Satisfaction Score (CSAT) methods. These, however, have limits.
You shouldn’t leave measuring customer satisfaction up to automated surveys alone. Compared to real human interaction, popups, emails, and long forms are less-than-ideal experiences for this kind of data gathering. Incorporate real conversations into your process and actually talk to your customers to see how they feel about the experiences they’ve had with your brand.
Lifetime Customer Value Shows A More Complete Marketing Impact
Lifetime customer value (LCV) is an easy metric to understand, but has historically been hard to track. Now, with modern technology connecting all consumer actions along the customer journey with the revenue they generate, brands are easily able to shift their focus to LCV.
LCV is a powerful marketing metric for one basic reason we all know: keeping customers longer is more profitable. LCV tracks just how long you are retaining them and how much they are spending throughout their lifecycle. Keeping customers longer should be a major focus for future brands, as Harvard found in their “Effects of E-Loyalty” study. They found by reducing customer churn by 5%, a brand increased revenue by 25-95%. Brands looking to use marketing for massive revenue gains should not forget about LCV, as it is a powerful growth lever.
High performing marketing organizations are moving past ROI to show their value in new ways like Weighted Pipeline, Satisfaction, and Lifetime Customer Value. As you look to improve your marketing in 2019, begin to incorporate these new methods into your mix.
For a dive deep into future predictions of marketing and what the next five years hold, watch our webinar “The Future of Marketing: 2019 Edition.” In this webinar, we’ll cover a wide range of topics, from the foundational changes in the role and scope of marketing to how your data use will change over the next five years.