Welcome back to another episode of Funnel Lab Fridays! If you’re just tuning in, Funnel Lab Fridays is our weekly LinkedIn Live series where we dive deep into the challenges and innovations facing data-savvy marketers today. I’m your host, Eric Westerkamp, CEO at CaliberMind. Joining me are Doug Bell, Chief Marketing Officer, and Misha Salkinder, Director of Data Strategy & Customer Data Strategy.
Today, we’re tackling a topic that’s near and dear to every marketer’s heart (and perhaps their blood pressure): measuring marketing ROI. We’re pulling back the curtain on the age-old question: is my marketing budget actually doing anything?
Setting the Stage: The ROI Conundrum
An important component of the martech stack is taking data, integrating it, and analyzing it to make really good decisions. Given how much pressure marketing is under these days, especially in SaaS, measuring ROI is a critical step toward showing results.
The Holy Grail for marketers has always been to consistently go back to the CEO and say, ‘If we spend this much, we’re going to get this much back in bookings or pipeline.’ CaliberMind helps organizations determine not only the channel-level ROI but also the total mix.
As Doug explains, “What you’re trying to do is measure the impact of each channel as it applies to different roles across the funnel. It’s about recognizing the role of each channel and then optimizing that channel towards the final goal.”
Misha works with CaliberMind customers that generate anywhere from $40-$50 million to $40-$50 billion annually and he’s noticed a commonality: most companies never tackle the challenge of measuring marketing ROI.
Organizations typically don’t have a very clear mapping of their channels or standardized, normalized data sets that enable them to identify when a touch can be linked to a numerator of return and a denominator of spend.
Current State: The Attribution Approach
Today, organizations are trying to match their budgets and figure out how to hit their goals. They have some data and information coming in about what’s working and what’s not. Eric poses the question, “When someone like the CEO or the CFO comes in and says, show me where you’re spending the money and what I’m getting as a return, how is marketing answering those questions?”
The companies that calculate ROI better use strategies like multi-touch attribution because they think of it in the context of a full buyer journey. Still, many companies are doing simple math. Misha frequently hears, “What companies have we touched? What’s their revenue? And we sum that up and compare it to the cost. It’s somewhat anecdotal.”
While these companies use attribution to measure all their tactics, they’re really only taking slices of that information and applying it to specific cost centers to see how it’s performing. They’re not able to holistically compare digital campaigns to events to sales outreach.
The Evolution of Marketing ROI
Over the last few years, there’s been a shift in how marketing is treated within organizations. Doug says that “there’s a tremendous amount of pressure on marketing and they’re typically the first organization to experience some sort of pullback or cut when things are going poorly. I think that’s a reflection of a lack of understanding of the value of marketing broadly.”
The idea of marketing leaders abstracting from the end result of growth, especially in SaaS, is almost completely gone. Today, instead of waiting until the end of the quarter to determine performance, organizations are monitoring a dashboard to see if their investments in their channel mix are working out.
Misha adds that marketing analysis is moving from a really high-level conversation between a CMO and CFO to actual campaign managers measuring results immediately. Is this event performing compared to the same amount of return I had for it last year? Do we need to adjust some things? Measuring marketing ROI is becoming much more tactical.
There’s a need to be more connected to the CFO. There are still many organizations where marketing is treated as an art as opposed to a scientific function. ROI is helping to elevate that conversation.
Tool Time: Introducing CaliberMind’s ROI Module
CaliberMind’s Channel-Based ROI Module allows you to take attribution by channel and roll in your budgets. The key to a tool like this is that you need to have your whole budget in here. You need to be able to show all the costs that marketing is responsible for, potentially even sales. Then you start to figure out how that breaks out over time.
Doug shared his 50,000-foot view of measuring ROI saying that, “the starting point for me, especially when planning with a CEO, is to ask, ‘What’s the history of our ability to produce pipeline from a ratio standpoint?’”
In CaliberMind, you can see your pipeline ROI. This tells you that, for each dollar spent, how much pipeline did you get back? Viewing last year’s data can serve as an anchor for this year’s marketing campaign planning because you can understand which channels are going to contribute to an improved ratio.
The CaliberMind team uses this data to present to their board. They were able to answer questions like, what return will we get on these strategies? Which campaigns are we leaning into? Which are we leaning away from? The conversation was productive because it was data-based, not anecdotal.
Analyzing annual marketing ROI with CaliberMind was a great experience for Doug—but it doesn’t stop there. “This is great for an annual budget but what about every month and every quarter? How are you adjusting and tweaking?” he asks.
Closing Thoughts
Thanks for joining us on this journey to demystify marketing ROI! Another big thank you to Doug Bell and Misha Salkinder for joining. Stay tuned for next week’s episode, where we’ll dive into the world of intent data.
