The Path to Performance Series Part 2: Applying the Marketing Investment Framework to Results

Updated June 2016: In my first post in this series, The Path to Performance Part 1, I mapped out a framework for understanding marketing investments. In this post, I’ll explore how to use that framework to arrive at the ultimate goal: a full, global view of your marketing performance that will allow you to become a revenue-driven marketing organization.

Applying the marketing investment framework streamlines your team’s efforts by giving everyone on the team a clear frame of reference for understanding investments. At Allocadia, we apply the same framework to marketing results. We find this way of thinking about results really clicks with many of our customers. They understand where the gaps are in their marketing performance, and see the close relationship between investments and results. Once they see the big picture, marketers have a clear path to achieving ROI, with specific steps they need to take to get there.

The Results Framework

The Path to Performance

Key data points:

• Returns Target: This is the top-down number, usually set by the CMO and other C-suite executives (such as the CEO and CSO) for marketing. This number can (and usually does) include split or cascading targets, for example, targets by region then segment. Targets may be in the form of pipeline, revenue won or leads generated. We recommend that organizations start with pipeline (sourced and/or influenced) since it speaks to impact while simplifying the time challenge in marketing measurement.  This is done within a results target budget within a returns hierarchy in Allocadia.

  Results Targets

• Returns Plan: This is the bottoms-up plan marketers build to meet the targets. Marketers put in one simple top-of-the-funnel metric for expected output, such as marketing qualified leads, into the Impact Modeller (shown below). Then, you can extrapolate estimated pipeline generated by using average deal size and funnel conversion rates per funnel stage. The dashboard below shows you your first two key data points, namely, your top-down Target vs your bottoms-up Plan and would be referenced during your planning phase to understand if you’ve built out enough activities with enough output to meet your results targets:

  Impact Modeller

• Returns Actuals: Actual marketing results data is typically pulled in from your CRM (for pipeline related metrics) or automation tools (if your top-level target is leads related) (whereas for the investment framework Actuals are pulled in via ERP and PO systems). We pull in data using direct connectors (for example to Salesforce.com for pipeline data) or our automated rules-based import to automatically map results to your returns target hierarchy. This dashboard shows you where you are with what you’ve generated today in real-time (vs your plan since your plan will have been locked down and be equal to your target after the planning phase completion) and would be referenced as marketing starts to execute on the plan (we call this the tracking phase):

• Forecast results: This is a dynamic forecast that’s automatically generated in our analytics BI engine using your past actuals plus your future plan (based on the current date). This dashboard shows you where you will be tomorrow in terms of hitting your targets if you continue to spend and generate pipeline as planned. This dashboard can be referenced on a daily, weekly, monthly or quarterly basis in order to ensure you are on track. It gives your marketing organization a better chance at hitting targets since adjustments can be made continually to optimize overall marketing performance:

The Outcome

The beauty of this approach is that once you have all the different results data points addressed, the Allocadia data model automatically ties your results to your investment data to calculate ROI. You can view different levels of ROI: corporate ROI, planned ROI, actual ROI and (the most forward looking view) forecasted ROI. You now have a real and tangible view of marketing performance to help you understand how your organization is spending and what you’re getting out of that spend.

What’s Next? Let’s talk about how you can track investments and results in your organization.

Allocadia Co-founder and Chief Product Officer Katherine Berry shares her insights about designing software for marketers. Katherine shares the product vision and progress about the Allocadia product and how her team is working to provide customers with the best user experience an enterprise marketing solution can offer. Want to stay on top of Allocadia Product News? Follow Katherine on Twitter @katherineberry and connect with her on LinkedIn.