From Marketing to Business Metrics: a Thought Leader Interview with Susan McKittrick

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Posted: June 2, 2011 | Marketing Metrics

In March 2011, the Patricia Seybold Group and the Information Technology Services Marketing Association (ITSMA) jointly conducted a Data-Driven Marketing Survey of their members and subscribers. Its results yielded insights on the value of data-driven marketing – some expected, some less so. I recently got a chance to discuss the survey’s results and their implications for the future of B2B Marketing with Susan McKittrick, an Analyst and Senior Consultant at the Patricia Seybold Group. McKittrick is a 30-year veteran in marketing strategy who reports on marketing automation implementation, content curation, and marketing optimization.

Why did you undertake research in data-driven marketing?

There are two reasons. First, data-driven decision making in business is drawing a lot of attention. McKinsey and IBM are both doing work in this area, and recent work at MIT has shown that productivity improvements, on the order of 5 to 6 percent, result from the adoption of data-driven decision making. We wanted to see how this focus on data was playing out in marketing.

Second, we know that the combination of changes in buyer behavior and the technology capabilities available today make much more actionable data available to marketers. For instance, customers don’t call in salespeople until much later, so marketers use data to read buying behavior signals on the web in order to present the right offer at the right time as they move prospects through the buying cycle, much like a salesperson used to do in face-to-face engagement. Similarly, now that marketers are responsible for nurturing prospects through a larger slice of the buying cycle, they need to apply the same rigor to their pipeline reporting that sales has historically provided. Further, marketing has become a hotbed of experimentation, in some companies continually challenging itself to improve performance. We wanted to see if these changes were resulting in business impact.

What did you expect to find?

In light of marketing’s growing dependence on data, the Patricia Seybold Group and ITSMA undertook to find out:

  • How proficient marketers are in the collection, analysis, and use of data for decision making
  • Whether effective use of data yields performance improvements
  • What steps marketing organizations take to become proficient in collection, analysis, and use of data for decision making

Our hypothesis was that data-driven marketing yields business performance improvements.

How did you conduct the survey?

In March 2011, Patricia Seybold Group and ITSMA invited their members and subscribers to participate in an online web-based survey, asking that the survey questions be answered by a person in the organization who manages one or more marketing functions. 107 representatives from 71 companies responded to the survey. We conducted 30-minute follow-up telephone interviews with 17 respondents.

Respondents included marketers from professional services firms, software solutions providers, computer systems and solutions providers, network systems and solution providers, and telecommunications services providers. All the respondents sell business to business; just under 15 percent also sell business to consumers. Over half of the respondents have over $1 billion in services revenue.

Did you find many organizations using marketing data to make decisions?

We identified 23 organizations that we termed “data-savvy.” These organizations were the only ones that shared three important characteristics:

  1. Written procedures for collecting data and clear expectations for analyzing data
  2. A culture that places importance on making decisions based on data and analysis
  3. Leading-edge or above average data usage to support marketing activities

The importance of formalized procedures and expectations is noteworthy. We found that many organizations address collection and analysis of data on an ad hoc basis. The purpose of written procedures stems from the need to be confident that results can be replicated and, hence, are trustworthy. Written procedures also eliminate continually “reinventing the wheel” when faced with a new situation.

Did you find a correlation with business performance?

We did. The survey yielded hard data associating leadership in data-driven marketing with increased sales productivity and market share. Data-savvy organizations outstripped the others in “significantly or somewhat” improving their average time to revenue, sales costs per order dollar, and market share over the last two years. While we found no such relationship to indicators of overall business performance, such as revenue and profitability, these may develop in time as marketing data gets more widely used in organizations.

Any surprises?

Actually, a good surprise. We expected, based on the research done by IBM, to find organizations hanging back from adopting a data-driven approach for cultural reasons – that is, senior management didn’t support a culture of experimentation. In fact, we found that opposite: less than 20% of the respondents reported that senior management did not embrace a test and learn approach to marketing.

How would you advise a company to move forward in becoming data-driven?

We found no magic that catapulted the data-savvy to their position of having achieved business impact. They struggle with the same issues as the other companies in our survey…but have been working on them for a longer period of time. We see leadership as a critical factor enabling organizations to move forward in data-driven marketing. It won’t happen without executive sponsorship, clear objectives, and ways of measuring success.

Our recent survey of marketing automation platform suppliers supports this conclusion. In it, we found clear objectives, performance measures, and metrics as the top factor influencing implementation success and one of the major elements missing, along with a champion in senior management, in the implementations of less successful customers.

Becoming data-savvy didn’t happen overnight. These organizations put technology plans in place, made technology investments, built analytics groups, formalized procedures, and made considerable progress in addressing data governance issues.

Any comments on how B2B marketing departments are using technology?

Data-savvy organizations stood out as having a marketing technology strategy and road map in place for a longer period of time than other organizations. More than half of the data-savvy organizations have had a strategy and road map in place for more than a year, compared with only 12 percent of the other marketing organizations.

The data-savvy also use more technologies and methodologies – and have for a longer time – than other organizations. In addition, they use marketing data in many more ways. Significantly, the uses achieved through the capabilities of marketing automation systems, such as determining which leads are sales ready, predicting campaign effectiveness, and segmenting markets for targeting campaigns, stand out among those that the data-savvy use but others don’t use. We see this survey as further validating the importance of marketing automation systems in driving improved business results.

Jon (@jonmiller) is a VP and co-founder at Marketo. He is the author of multiple Definitive Guides including Marketing Automation, Engaging Email Marketing, and Marketing Metrics & Analytics. In 2010, The CMO Institute named Jon a Top 10 CMO for companies under $250 million revenue. Jon holds a bachelor’s degree in physics from Harvard College and has an MBA from the Stanford Graduate School of Business.

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From Marketing to Business Metrics: a Thought Leader Interview with Susan McKittrick

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