I was kindly invited to appear on the excellent podcast series hosted by the Business Marketing Club. The conversation was around a topic that is actually a major challenge in B2B marketing – objectives, outcomes and outputs.
The reason it’s a challenge is because they get mixed up far too often.
Let’s start with objectives
Looking at objectives, as an industry we just need to do the basics well. Long-established marketing theory still holds true here.
Objectives need to be SMART:
Specific
Measurable
Achievable
Relevant
Timed
We all know that, right?
The ‘R problem’
The biggest challenge in B2B is to ensure objectives are the right objectives. I suppose you could say that this is the ‘R’ in SMART.
In other words, we need to be super clear and concise about what the business is trying to achieve, and from them create the objectives that align to this aim.
What problem are we trying to solve?
In B2B marketing, our job is to ask this question – incessantly. Revenue is a classic answer that a business will give. Most businesses typically want to grow revenues. But the real question should be, ‘Where can marketing actually provide most value and impact here?’
Sadly, the usual response here is ‘lead gen.’ But what if there is actually a fundamental brand awareness problem, which is resulting in a low level of inbound enquiries? Plus, are sales people having to spend a lot of time explaining the ‘who are we and what do we do’ topic?
If the above is the case (and let’s face it, that’s a pretty common scenario), then shouldn’t one objective actually be more about achieving measurable uplifts in brand awareness? And the other to ensure our proposition is clear, and that customers and prospects (and salespeople) understand it?
Relevance is about working out what the actual problems are, prioritizing them – and from that the marketing objectives should naturally fall.
Quantifying objectives
Putting a number on objectives can be challenging. Annoyingly it’s not as an exact science as it should be. I do think we must get hold of some critical bits of information/data to help on objective setting.
I think there are five numbers we must all know and be able to recite (and start with revenue and work ‘upwards,’ if that makes sense):
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Target growth rate for the business – 10%, 20%, 40% – what is it? And what is this in revenue terms?
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Average sale value – i.e. how much is a customer actually ‘worth?’
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Sales closure rate: from qualified lead to closed business – i.e. what’s our win rate?
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From website traffic to lead (form fill) – how many unique visitors and how many forms are filled?
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Of the forms filled – how many are ‘sales accepted?’
If you’ve got these, then you’ve got the fundamentals of an ROI model.
Outputs and outcomes
A particular area of confusion is outputs v outcomes. They are not the same.
Marketing is too often measured by outputs (“Are we putting a lot of stuff out there?”) v outcomes (“Does what we’re doing actually make an impact – and if so, what is that measurable impact?”)
Marketing outcomes: time to expand our horizons?
My personal view is that marketing urgently needs to broaden its remit on outcomes. Marketing is not just a lead gen function. Why don’t we get our arms round some other outcomes that often move the needle much more than just leads?
Customer satisfaction: I strongly believe marketing is the voice of the customer, so let’s champion them in the business and spot opportunities to improve their experience and therefore customer outcomes.
Customer advocacy: I would deliberately separate this out from the above, as really we’re talking about a sustained program that generates customer case studies, testimonials and references. We all know how hard it is, but it’s usually sales telling us that, and when you talk to a customer yourself you’ll often find it’s not nearly as hard as you were told. Just ask. Marketing should own customer advocacy – and in terms of ‘outcomes,’ it will be significant.
Profitability: B2B marketing can and should have a profitability outcome on its list. We should be involved in pricing. We should be looking at product – and how we can bundle, create recurring revenue, design product/service add-ons and so on.
The value that marketing can add here is exponential – if a business runs on 20% EBITDA, then adding 20% to EBITDA is equivalent to adding 20% to revenue but without adding net new customers, without adding to marketing budgets necessarily. That’s a big win for the business.
Chris Wilson, managing partner at Earnest.
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