Ian Michels, Sr., Technical Account Manager at Adobe, joins our host, Camela Thompson, Go-To-Market Thought Leader and B2B Insights Expert, in this episode of the Revenue Marketing Report. Ian shares which KPIs make the most sense at different stages, why marketers should embrace them, and how often to discuss them.
Ian, welcome back. Let’s talk about KPIs and establish a cadence around them. Maybe we should start with how those KPIs should look like.
“KPIs are a big one. It is interesting. I don’t know if you have ever run into this, but as we are rolling out different measurement tools and I am working with different clients, I would always ask them, what are your KPIs? I would say that 50% of the time, they didn’t have them. It just wasn’t a thing. I don’t know if you ran into that or not as you worked across different teams, but it was always interesting.”
Absolutely!
“Yes, it happens. I think it is a great question because for those who are listening, this is pretty normal actually. This is something that teams struggle with. Part of the reason is that KPIs are typically viewed from an executive perspective. There are KPIs for the entire company, not for the marketing team. I think it is a good question since as we think about those KPIs, your KPIs need to align to whatever the overarching company goals are, whatever those may be. You have to start there. You have to look at that and say, okay, we want to increase our revenue by 25%. We need to build our different accounts out. We need to have a better approach to our account engagement.
“All of those are indicators of what you’re going to do to build your KPIs out. When I have worked for clients, we begin with the basics. Yesterday, we made fun of HBR metrics, but that’s what we start with. If you don’t have KPIs, we’re going to start with the basics. We are going to say, okay, how many leads do you need to create? How many ops are you looking for? How much pipeline do you need to be able to develop? If you don’t have those, look at the previous year. You need to look at your previous data points to know what you are measuring against. You can’t go blindly in and start building out these KPIs. But I would say most likely your key practical indicators are going to be based upon what you previously had and trying to grow those based upon what you’ve seen and push yourself a bit. The reason why you have those there is to push yourself. Don’t just say, well, year over year, we’ve 20% growth. No, go for 30%, and figure out how to push yourself within those things.”
It is risky to set goals for folks since if you set the wrong one, you can accidentally encourage the wrong behavior. I think salespeople and sales managers know this so well because a poorly defined comp plan, it’s chaos. However, I’ve seen it in marketing, and even as a leader, we had to start with qualified leads. The behavior I saw then compared to when we had visibility into the pipeline generated, the behavior shifted completely. We changed how we refined our targeting and how we thought about conversion rates and all things that are super-important. I think if marketers take one thing away from this, from me, I am sure they will get a lot more from you, but the one thing would be, your leadership team won’t be disappointed in a lower MQL number if your conversion rates and your pipeline is up. I think that’s something we don’t hang on to enough.
“That is so good. Yeah, I’m always cautious with pipeline, but you’re absolutely right. Pipeline is still an executive number. Executives report on it all day. It is probably because it is a magic number. It is just this elusive pipeline number and people still love it and yet it could completely go away the next day once sales closes something and it’s a closed loss, but it is a thing and it’s there. But you are right. If those accelerators are all there, that is the ending place. How do you build your KPIs off of that? That is typically how we drive qualified leads. How do we drive certain types of ops? Businesses have multiple types of ops. Even within your KPIs, don’t settle for just new opportunities or new business. Look at your current existing ops, your renewals will help. Tell you what, if you’re a marketer and you’re coming into the conversation and you’re saying, hey, sales, I’m going to help you drive 20% more growth and renewals.
“Okay, let’s talk. Let’s figure that out. Let’s do that. You are going to be transforming your marketing team since you’re getting into the right conversations. Marketers so often sit on new business and rightfully so because the business grows off of new business. But the business grows off new business because that new business begins to renew. That is how the business continues to grow. If it’s one-for-one where you get new business and then they don’t renew, your business doesn’t grow. So get into those conversations as well. Start building your KPIs out of your existing business, and your renewal upsells. Get a part of those conversations and start building out KPIs along those. It’s okay. I am curious to get your thoughts on it, but my approach with KPIs too is to have KPIs within different aspects of the business. It doesn’t have to be, here’s all of our KPIs. Just set up three KPIs for new business, set up three KPIs for a renewal. Set something up where it is a little bit more manageable. It’s pierced out to where it is easier to understand and start approaching it.”
Absolutely, I think we know what those are. Lead volume is important. Like we said, it’s not the end all and be all, but it is important. I like to look at conversion rates from lead to opportunity and trend that over time, and what that tells me is some marketers need to know the different channels they work with at different points in the sales cycle. They don’t all lend themselves well to, let’s say, drawing someone in or an awareness play and they don’t all lend themselves well to converting someone from somebody who is considering things into actually talking to sales. There are different things that work at different times. We need to get to a place where we can measure that and look at the conversion rate by channel because that helps us understand if we are short on pipeline, which is something we should be looking at so we can see when we are behind, what can I do immediately to change this quarter’s outcome?
“That is right.”
It sounds hard, but if we set up campaigns well, we can get into that some other time. It’s going to be a huge dissertation and I am sure we will have slightly differing points of views but it’s fine. Yet, as long as you have the data in place, it is pattern matching which is something we do since childhood. It is how we recognize people’s faces and brands we like, and all of these things. We are looking at a prolonged period of time, hopefully, five quarters’ worth of data. We are looking at whether or not we are on pace or behind pace and just looking for things that jump out at us. That is kind of a superpower I think executives have to learn, but I think it’s a superpower anyone can get. It is looking for the thing that jumps out at you.
“Yeah, it’s pattern recognition. It’s spot on and such a great and simple way to break it down. What that also does for a marketer is with the proper infrastructure and that pattern recognition, when your executive does come to and asks, hey, we got an extra $10,000, where do we need to invest it? As Camela said, if you’ve got five quarters’ worth of data, you can immediately identify where you need to invest it to know what will help produce pipeline. If you have that properly set up there, that is ideal. That is key.
“Now, those aren’t I would say that so much as KPIs, but that is when you have proper KPIs in place, It sets you up for success, then those conversations you have when, hey, we had X number of budget allocated here that got shut down. We are going to move it over here. Now, you can actually make moves and you can be quick with it and you aren’t sitting there trying to figure it out. You can feel confident within those moves.”
As boring as looking at numbers might be, the reason why we suggest looking at several quarters and looking at it regularly, once a week or once every two weeks. The more you look at something, the more you will notice as things change and what’s normal. So when you fall out of normal, you’re much quicker to pick it up. It’s repetition like anything.
“Absolutely! It’s key. That is also I think a good point. I am a big proponent of getting a data analyst onto the marketing team. Don’t have a data analyst who lives on a separate team, on a data team, or IT team, or whatever. You need one in marketing. Through osmosis, They will start absorbing what is important, and what’s valuable and that will be crucial for you to help start telling a data story to understand what those patterns are for all of those things. It is critical to have that person living within marketing.”
That is a great call out since some people don’t like numbers. They are intimidated by them. Pair yourself with someone who loves this stuff. I think Ian is right. They need to be on the team because what makes a good analyst isn’t just the ability to crunch numbers. It’s the ability to understand the greater business context and where to look next. Their real value isn’t producing good reports. That is important. But their real value is saying, hey, I have noticed a change here, and here are the three channels we need to look at to determine why that happened.
“Amazing stuff because most marketers are creative naturally. I think even marketing ops roles have that balance of a more statistical mindset looking for outliers with the creative side. You see marketing ops roles ebb and flow between those two. However, having somebody who understands data and those outliers and is a little more statistically minded, the marketer can then do exactly what they naturally do best.
“Build a marketing team with different strengths, not all the same strengths. When you have that strength of statistics, they will live and breathe in that and they will excel and do great. And the guy and the individual who lives and breathes building out cool designs and what not for marketing will continue to do what they do without being bogged down by data. It enables the team to accelerate and move a lot faster.”
I have met a few marketers who have a block when it comes to numbers. That is fine. They were still good at what they did and we paired them with someone who could in a very–the other thing is communication skills with an analyst can be hard to find as a combo–but you could gently nudge them in the direction they need to go.
“That is why they have to be on your team since that is common. If they live on a separate team, it’s going to be even harder. I am a believer in that osmosis effect. Let them be on your team, and be on the calls. Let them hear what you’re saying. They are going to be much more introspective. They’re going to listen, and hear it and they are going to do it. They may not talk as much, but they are going to do those things. I think that is a good call. However, again, I’m an advocate for them being on marketing.”
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