To be able to calculate your marketing ROI with Marketo (return on investment) in one click… The dream of every marketer… Well, this dream came true this morning during our Coffee, Croissants, Marketo where Cecile Feroldi came to present the way she pilots her marketing on a daily basis using the Marketo module “Revenue Cycle Explorer” (whose new name is “Advanced Report Builder”)

The challenge: to demonstrate the contribution of marketing

Today, all marketing departments are faced with the need to prove their contribution, to defend their budgets, to convince sales of the interest of working together.

It’s impossible to present yourself to your management with data on email openings or on the click rate! For this we have already shown you the basic reports of Marketo.

Now you have to calculate your marketing ROI, profits, marketing influence, but above all you have to come up with figures.

Cecile tells us: “We can no longer accept to invest several thousands of euros or tens of thousands of euros on an event just on the faith of the sales people who think that this event is important. You have to prove that in the past an event of this type has positively influenced sales over the following 12 months”.

It’s time to measure, to optimize, to stop what doesn’t work and to reinforce the campaigns that do.

OK.

But how do we actually do it?

Calculate your marketing ROI with Marketo: Marketo Revenue Cycle Explorer or the solution to your impossible ROI calculations in Excel

The first time you sit down in front of your white sheet of paper with the firm intention of calculating an ROI, you usually come to these conclusions:

• I know my costs easily enough: that’s what I spend on my events, my contact list purchases, my webinars… Should I add the costs of marketing personnel? Maybe not at first, it might be complicated… Nevertheless, my website and my blog on which I have continuously invested, how can I take them into account?
• For income, I have my CRM, with opportunities, and another difficulty, I have to link these opportunities to one or more marketing campaigns in order to dispatch the income on these campaigns. We come across the topic of “Revenue Allocation” which I cover just below.
• I try to build a conversion “pipe” or “funnel” by putting end to end the campaigns through which the contacts are supposed to pass, but you quickly come to the conclusion that 1/ your contacts have participated in a lot of campaigns, and not all in the same order 2/ in the same company, generally more than one contact is touched by your campaigns. And there, in Excel, it becomes impossible to model.

If you have the Marketo solution, connected with your CRM – especially at the level of opportunities – no problem! The costs and periods of your campaigns are managed in Marketo and Marketo will constantly read the opportunities of the CRM, and dispatch the income of these on the marketing campaigns in two modes:

• Either the explicit mode: Marketo reads the opportunities, and the contacts attached to these opportunities. It then looks at which marketing campaigns have successfully reached these contacts and makes the link: opportunities > contacts > successful campaigns.
• Or the implicit mode: Marketo reads the opportunities, goes back to the account, and will dispatch the revenue to all the contacts – of this account – touched by successful campaigns.

Marketo then makes the automatic calculations of revenue attribution and gives you a “First-Touch” or “Multi-Touch” vision.

Note: for these calculations you must have Marketo and its option “Revenue Cycle Explorer” which is a dedicated “Business Intelligence” brick, natively connected to Marketo and which incorporates these attribution logics without you having to configure anything.

Attribution (of income) in Marketo

What is attribution?

Attribution is how Marketo attributes revenue to programs that have influenced opportunities and sales.

What is the meaning of First Touch / Last Touch / Multi touch ?

• • First Touch (FT) attribution answers a simple question: which programs acquire the most qualified new leads?
    • All credit goes to the programs that generated the lead 
  • Last Touch (LT) attribution answers another simple question: which programs trigger the most conversions (opportunities or sales)
    • All credit goes to the programs that precede the opportunity creation
  • Marketo does not support Last Touch
• Multi Touch (MT) answers a complex question: which programs are the most decisive to move the lead to the Sales stage.

   

The attached powerpoint gives you examples of First Touch and Multi Touch calculations (slides 13 to 16).

Concrete examples from Kaspersky

Cecile Feroldi then showed us the reports she uses. The presentation below shows them, without the data for obvious reasons of confidentiality.

Among the most interesting reports:

Which campaigns or channels generate the most new leads ? (slide 8)

The campaigns in Marketo are grouped into channels and Cecile can see in two clicks which campaign or channel is generating the most leads.

How does Marketo calculate this? Each time a lead enters the database, we trace the campaign through which it entered: the blog, a webinar, a content download, a forwarded email, or sales if the CRM is connected to Marketo…. Markto relies on this data to make this type of report.

Which campaigns or channels generate the most pipeline ? (slide 13) and the most revenue ? (slide 14)

It’s good to generate new leads, it’s even better if those leads generate opportunities and then revenue. These reports allow you to see which campaigns are the most effective in triggering opportunities and then revenue.

How does Marketo calculate this? For the generated pipeline, Marketo will dispatch the amount of opportunities created during the period considered on the attached contacts, then on the successful campaigns before the creation of the opportunity.

For the generated revenue, the same logic: Marketo will dispatch the amount of opportunities won in the period considered to the attached contacts, then to the successful campaigns before the closing of the opportunity.

How much of the total business does marketing influence ? (slide 15)

The success of an opportunity relies on teamwork (right Cecile?) between marketing and sales. It’s not one or the other that won, it’s both.

OK, that’s nice, but can we prove it? Here again, Cecile demonstrated: on the one hand, the number of opportunities that were not influenced by the business, their amount, and the size of the average opportunity, and on the other hand, the same indicators for the opportunities influenced by marketing.

Conclusion (I’ve seen the numbers): even though there are more non-influenced opportunities than influenced ones, the amount generated is twice as large when the opportunity was influenced by marketing! Quite an argument to convince the sales force > let’s work together, it will generate bigger deals and you will get more bonuses !

What is the ROI of marketing over the past years ? (slide 21)

What better argument than to arrive at the board meeting with your ROI figures calculated by year, showing results between 300% and 4000%?

This report shows the amount of marketing investment in a given year and the total revenue attributed to the campaigns in that year, and is thus able to calculate the ROI.

The opposite logic is presented in slide 22: for an amount of business influenced in year n, what are the associated costs?

In conclusion, you build your reports in a flash by dragging and dropping the indicators and filters that interest you, and Marketo does it!

Some prerequisites to calculate your marketing ROI with Marketo

This impressive demonstration requires a few prerequisites, Cécile warns us:

Marketo / CRM synchronization

As you can see, if you can’t connect your CRM which contains your generated and earned business, and Marketo which contains your campaigns, there will be no magic, you won’t be able to benefit from Marketo’s computing power.

Data quality processes respected

A certain amount of rigor is required if the numbers are to be correct:

• • defined and respected program naming rules to easily identify and filter campaigns
• • systematically put costs and periods on your campaigns
• • define precisely what is a success for a campaign, because the attribution of revenue to a campaign is based on the fact that a lead was successful in this campaign (for example the lead attended the event, downloaded the white paper, consumed an online webinar …)
• • Put all your campaigns in Marketo in order to have an exhaustive vision.

• Check, check, check because your figures can always be distorted by duplicates, marketing or sales processes not respected, errors in period entry…

Obstacles to the proper functioning of the NCE

My CRM does not contain all the income.

This is quite often true for the “SMB” business where an order is signed directly, especially if your company has off-the-shelf offerings, with an ecommerce site. The sales process is then simplified and fast and does not require the creation of an opportunity. This can also be true sometimes for renewal, or for business that goes through the indirect channel. A solution can -sometimes- be to recreate an opportunity for each order of this type.

Unrealistic opportunity amount

The amount of revenue on the opportunity doesn’t really match what was signed at the end or the amount of revenue actually generated over time, which is especially true in service. The solution is to set up a “Close the Loop” in the CRM, i.e. to bring back the billing data from finance and regularly update the opportunities with this information (I didn’t say it was easy :-).

Conclusion:

Looking at Cecile, we think that all this looks easy. It is in fact the culmination of a journey in terms of marketing automation maturity that lasts several months, a journey that we tell you about succinctly in our diagnosis.

Would you like to have your campaign ROI at your fingertips too?