Benchmark your Marketing Organization with IDC Research – 2013 Tech Marketing Benchmark Survey

Here at IDC’s CMO Advisory Service we are in the field with our 11th annual Tech Marketing Benchmarks Study. I would like to offer an invitation to participate to marketing executives across the industry. 

Have you ever wondered, “Is my marketing organization receiving enough budget to compete?” or “Exactly how much should I be spending on marketing automation?” If so, IDC’s CMO Advisory Service’s benchmark survey has been helping senior marketers answer questions like these for over 10 years!

Below are the essential “need to knows” around our survey and further down I’ll dive into all the great value of benchmarking your marketing organization. Let’s get started:

What are the benefits?

  • Complimentary copy of our 2014 Marketing Investment Planner to benchmark your company’s marketing data against the industry’s data.
  • Receive an invitation to our client only telebriefing held by IDC Analysts. 

What is needed? 

  • Email me (smelnick (at) IDC (dot) com) to get our survey instrument and taxonomy.
  • Complete the survey and send it back in a timely manner (‘due date’ to be discussed).

What is the Quality of Data and Confidentially?  

  • This is the 11th year IDC has fielded the Tech Marketing Benchmark Survey and will include participation from many of the 100 largest tech companies – this depth and expertise is unmatched
  • All responses are 100%, no questions asked, confidential. We take this part very seriously.  

Bonus to all Participants

  • All participants will be eligible for our 2014 Chief Marketing Officer ROI Matrix and will have access to their placement on the Matrix. A great way to easily compare your marketing progress against the rest of the industry’s. 



Need More Information: View this excerpt from Kathleen Schaub’s excellent post, IDC Tech Marketing Benchmark: Behind the Scenes. It explains all the intricacies (and value of benchmarking).

Why do companies benchmark? A benchmark provides context for decision-making. You spend a million dollars a year on social marketing. So what? If your CEO asks you this question, what will you say? Tech marketers tell us that they like to benchmark for the following reasons:

  • Improve the quality of annual planning: Last year’s program budget and gut feelings are no longer sufficient input
  • Gain insight into critical trends: Learn what industry leaders and competitors are doing – and how you stack up
  • Reallocate costs: Identify areas of overspending and opportunities for better value
  • Transform with confidence: Answer questions such as how much to invest in new areas like social marketing or how should I re-organize my department?
  • Drive with data: C-level executives increasingly expect marketing leaders to manage their business with the same level of operational excellence as other corporate functions.
  • Get an independent view: Benchmark data provides IDC analysts with a wealth of information that make guidance to clients personalized and accurate guidance

Feel free to reach out and let’s have a discussion whether it’s the right time for your organization to participate!

Email me at: (smelnick (at) IDC (dot) com) or find me on twitter @SamMelnick

3 Steps to Move Closer to the Ever Elusive Marketing ROI

CMO ROIHere at the CMO Advisory Service, we recently closed up our 2013 Barometer Study which includes data from senior level marketers working at some of the largest Tech companies in the world. While there are a lot of great insights from this study, these senior level marketers made it very clear that their highest priority is “Proving Marketing’s Value”, or in other words, that always elusive marketing ROI. While this quest(ion) is nothing new to marketers, as our industry continues its transformation, marketing ROI is becoming an even more pressing topic. We see this truth in our surveys, we hear it from clients, and it is actively being discussed at industry events. This year we launched our  Chief Marketing Officer ROI Matrix (see the image to the right) in an effort to give participants a look into their own return on investment from marketing and continue the conversation. There is no easy answer here (otherwise my days would not be quite as busy), but I have 3 steps senior marketers can take to move closer to measuring marketing ROI.

1. Identify what matters and what does not

This might seem obvious, but to successfully prove value, first it must be understood what is providing value.  Often when we speak with clients we remind them that tactics are important, but without strategy on the front end those tactics may be wasted energy. Before creating a substantial dashboard or reporting tool, take the time to understand which data or measurements are going to further the case and which are white noise. Once done, not only will the organization be better able to prove ROI, but it will be able increase effectiveness.

Key Fact: 27% of B2B companies report they have not yet used predictive analytics to improve any marketing activities.

2. Communicate inside and outside of your department

As transformation continues within the tech industry it is creating a ripple effect to companies and then departments within each company. This means lots of change, and change can often mean confusion. Not only are marketers pushing to prove their worth, but they have to compete with this ongoing confusion. To overcome this issue, communication is a must, both within the marketing organization and across the entire company.  It is key to receive buy-in from stakeholders and make sure the steps taken are continuously aligned with expectations. It also means communicating the actions taken (and why they were taken) to staff or superiors. Remember, over communicate, as in times of turmoil “value” can be a moving target.

Key Fact: In 2013 senior marketers expect 2/3 of the marketing technology budget will come from the marketing department – the rest from IT, Sales, and other areas. Communication across these departments is key. 

3. Benchmark your progress

Identifying what provides value and then communicating as progress is made towards measurment are two great steps. However, when it’s time to share the work, comparisons and baselines will be needed. The first step is measuring your own progress. How have the KPIs improved and what can be expected in the future? The next question will be, what is the comparison to competitors? Finding ways to benchmark and measure progress internally and externally will help tell the story of value added and improvement. It will also set standards and targets to shoot for, without these benchmarks there is a risk of flying blind.

Key Fact: Close to 100 tech companies participated (For Free) in IDC’s Chief Marketing Officer ROI Matrix and benchmarked their marketing ROI against their industry peers. To participate this year contact smelnick (at) IDC (dot) com.

What other steps would you recommend to prove marketing value or even derive that elusive marketing ROI number?

Do you think this is fools gold and there are other areas marketers should be focused on?

Let me know your thoughts!

You can follow Sam Melnick on Twitter: @SamMelnick 

Six Key Table Stakes for B2B Sales and Marketing Alignment

The IDC CMO and Sales advisory services held their most recent client leadership meeting in Santa Clara on June 5th. One of the key topics of the day was sales enablement. The ensuing dialog between the sales and marketing execs in the room was as impassioned as it was ineffective. Many of the usual themes were expressed (in the nicest possible way): “marketing leads are crap”, “sales doesn’t follow up”, etc. etc.

Whenever I hear this conversation it always sounds like the two sides are talking past one another. Neither really understands how to express their frustration in a way that has any meaning to the other. What’s missing are some basic table stakes:

Sales 

1. Train marketing on sales process. It is impossible to effectively contribute to, much less consistently improve, an unknown process. No marketing team should be expected to deliver effective collateral or leads to a sales organization until they have been fully trained on sales process and methodology. In a large organization with multiple business units and product lines there will be many sales processes and the marketing teams charged with supported them must receive the same depth and cadence of training that the sales reps get.

Marketing 

2. Treat the sales force like a market segment. There are great variations in the needs of different kinds of reps in your organization and you must understand them on a rep by rep basis no less urgently than you do for your external marketing targets. The needs of an enterprise rep with two accounts are radically different than an SMB rep with 400 accounts or a territory where they may not know all the potential customers. Don’t throw 10,000 leads a month at both of them. You get the idea. Nurture your sales reps like any other targets and tune the metrics accordingly.

3. Market sales collateral like solutions. Marketing tends to market its wares to the sales force like products whose benefits are self evident. Assets are often “published” or “distributed” generically with tags to help reps “find” them. Imagine what would happen to the funnel if that was the extent of external marketing efforts! Sales support assets should be marketed through targeted nurture campaigns. Once you get going on #2 above, you can start to address the needs of each rep and market your leads, collateral and other assets as solutions to the right sales problem at the right time!

4. Take an account centric approach to lead generation. Marketing is generally great at understanding the world in terms of segments and contacts. These are fundamental concepts for planning, budgeting, and executing marketing activity. However, sales reps think of the world in terms of accounts. Marketing needs to make leads more relevant to reps by delivering them in an account context.

Sales and Marketing

5. Define customer creation as an enterprise process. This is the most effective way to change the corporate culture and gain executive support for addressing the many alignment issues across all customer facing functions in the enterprise. The analogy here is supply chain. Before it was defined as an enterprise process the people, processes, technology, data, and budgets within it were managed on a purely departmental basis. Defining it as an enterprise process made it possible to optimize and continually improve the supply chain based on overall business performance. The customer creation process – from prospecting to closing to upselling – needs to be owned and measured in the same way.

6. Implement customer data as an enterprise service. Once customer creation is established as an enterprise process, it requires an enterprise approach to customer data management in order for the optimization and continuous improvement to take place based on core business metrics and not on a collection of disassociated departmental KPIs.

These six table stakes should be treated as urgent action items for all high tech Sales Operations and Marketing Operations personnel. Some organizations are doing some of these things, but no one has implemented all of them as organizational norms.

B2B ROI: Marketing is Not a Candy Machine

“What is your expected return on investment for the next campaign?” This question is common and easy to ask, but it is also one of the most challenging to answer. Determining financial return on investment (ROI) within the context of a long sales cycle has largely been a failure. Becoming financially accountable is possible – but B2B marketing departments will need more advanced quantitative tools.

How should companies measure the financial value of marketing expenditure? For some ordinary company expenses, such as capital equipment, ROI is a common measure of value. Never before have there been more spreadsheets and dashboards available to slice and dice any facet of marketing. With information so available, it has never been more justifiable to treat marketing like an ordinary expense and ask for an ROI similar to the type that applies to the purchase of new equipment.

B2B Marketing is Not a Candy Machine

Yet attempts to measure meaningful financial ROI in a B2B marketing context using methods applied to capital expenditures have largely failed. They have failed because the assumptions underlying ROI calculations do not apply to the majority of B2B marketing situations.ROI calculations assume that a marketing program is a simple, unambiguous transaction. Such a transaction works like this: If I put quarters into a candy machine and push a button, a candy bar pops out. The investment (quarters) and the return (candy) are clearly and immediately connected.

Simple math can measure simple marketing. If I send mail piece X, I get 100 orders. If I send mail piece Y, I get 200 orders. Therefore, I should invest in Y. Because I know the cost of the mail programs (investment) and the resulting value (return), I can calculate ROI.If the only marketing activity conducted was the mail piece, then an ROI calculation would be simple arithmetic.

However, B2B marketing within the context of a long and complex sale is not simple. It is a multifaceted set of influences that is applied against quickly changing human buying behaviors. IDC research shows that it takes an average of 19 months to create a new B2B customer and includes multiple touches.

Compare our single direct-mail example with an actual marketing process that involves as many as 25 different media types over nearly two years. What role did ads play in getting the buyer to respond to either mail campaign? What about the sales call campaign that coincidentally occurred about the same time?

GUIDANCE: Don’t attempt to calculate simple B2B ROI. Simple ROI fails to measure B2B marketing value because B2B marketing value results from the accumulation of effects over time. Other types of success measures will be useful at measuring tactical programs, but financial ROI using data collected at this level cannot be accurate.

First Step: Get a handle on your “I” (Investment)

The fact that simple ROI fails to measure marketing value does not mean that businesses are forever doomed to wonder despondently about the value of their marketing investment. However, progress requires more data and more advanced quantitative tools.

One hurdle is the lack of basic financial data within marketing departments. IDC consistently sees that many tech marketing departments have a poor understanding of their “investment,” or “I,” much less an ability to then determine the “return,” or “R.”

GUIDANCE: Do start by measuring your “I” (investments). Track marketing investments carefully over time and seek to control these expenses. Each year, IDC produces a Marketing Performance Matrix based on our annual Tech Marketing Benchmark survey identifying best practitioners in marketing operational excellence. In collaboration with these best-in-class companies, we’ve identified the operational behavior and performance indicators most useful for investment control and other important practices. Tech marketers can participate (for free) in IDC’s this survey and receive a complimentary copy of the aggregate results to see how their company compares. Contact Joe Ferrantino (jferrantino@idc.com) if you are interested in participating.

Next Step: Analytics are required to start down the “R” path

The candy machine example described previously is a model for an ultrasimple, “coin operated” buying process. A more complex process, such as B2B buying, has many more steps and requires a more sophisticated model. Although B2B buying is not neat and linear a well-thought-out, multi-stage, pipeline is a reasonable proxy.

By capturing lots of behavioral data at touch points along the way, marketers can describe buyers’ progress from step to step toward a purchase. Important metrics include conversion (how many buyers from early stages progress to the later stages?), velocity (how fast do buyers progress through the stages?), and volume (will the amount that buyers intend to buy satisfy the need for revenue?).

Clusters of data-producing programs then become the levers and knobs that a company uses to nudge buyers from stage to stage. B2B companies with data learn quickly about the interdependency of marketing and sales in nudging buyers through the pipeline. IDC research shows that the average large tech company invests $40K – $70K USD in marketing for each sales person. This ratio may change in the future as more companies exploit the leverage between the two functions.

Once an organization has collected enough data to model a reasonably accurate customer creation pipeline, business intelligence and analytics tools can be applied to tease out the contribution of various marketing program components to movement between pipeline stages. Combinations of different programs can be tested for their ability to increase conversion and speed velocity, thus creating a pipeline that delivers the required revenue at a continually lower cost.

GUIDANCE: Do invest in a data-driven, buyer-centric, customer creation process that links programs to a smarter pipeline, which in turn links to revenue. Simple ROI calculations do not work for complex processes. To start down the path towards a reasonable answer to the financial ROI question, invest in a more sophisticated customer creation process model, lots of data, and analytics..