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Measuring Success: Tying
Metrics are a part of our everyday lives: from our heart rate to our salary ranges; from earnings per share to market share. They are an indicator of effectiveness, serving as a way to ascertain what has the greatest impact. However, if a company has no structured way to apply metrics, their usefulness is limited at best.
Tying metrics into the buying pipeline allows marketers to focus their efforts in a measurable, meaningful way. The buying pipeline refers to the incremental behavioral commitments buyers demonstrate that indicate whether they are moving from suspect to prospect, and ultimately to customer. The buying pipeline provides marketers with a view into the buying process enabling marketing and sales to be aligned accordingly.
A solid pipeline tool details the many steps and the consequent time involved in each phase. At each step in the process, metrics can be established and monitored to help measure progress and steer efforts in the proper direction. Over time, a company can assess how well its efforts are moving targets from one stage to the next and begin to fine-tune its efforts, propelling more opportunities to conversion faster. There are five steps to developing the tool and associated metrics:
The first step in constructing the buying pipeline is to define and map the incremental behavior commitments. This can be different by industry and by buyer. An example of an incremental behavior commitment is when the target provides information about the size of their problem, degree of interest in solving the problem and asks for a follow up conversation. Another example might be a request for an RFP. It is important that the marketing and sales organizations agree upon which behaviors are desired in the target and demonstrate increased consideration.
Once all the incremental behavior commitments are defined and mapped, the second step is to determine which behaviors fall into what stage in the pipeline: contact, suspect, lead, qualified lead, prospect and customer. Using the previous examples, the first behavior might establish the target as a suspect and the second as a prospect in the pipeline. A key advantage of this step is that both marketing and sales will be able to agree on exactly what behaviors indicate the stage a target is in.
The third step is to establish the metrics for the buying pipeline. These will include conversion ratios from one stage to the next, time to sale, and cost to acquire. This step may require gathering historical or industry data.
The fourth step involves developing the marketing and sales strategies and tactics that will be used to motivate the targets to take the appropriate behavioral steps that will move them through the pipeline. Effective marketing that capitalizes on buying motives and helps the target understand how your offer addresses their needs will be critical to moving targets through each stage.
The fifth and final step involves tracking the effectiveness of each strategy and tactic in moving the target through the stages. Without this information, the company cannot know what is working, whether the goals are being met, and what adjustments are required.
In today's uncertain economic environment companies cannot succeed without appropriately measuring and benchmarking their business performance over time. More than ever, marketing organizations within companies are coming under scrutiny to show and substantiate their revenue and lead generation effectiveness through metrics. These statistics provide valuable data points against which the marketing organization can track its progress. Ultimately, metrics help companies successfully navigate the uncharted territory of the buying pipeline. Hopefully, these five steps will help you better define your buying pipeline and develop metrics more meaningful than click-through rates, show lead cards or ad response rates. This approach encourages marketing and sales to work together to understand where each opportunity is in the pipeline and who has the primary responsibility to move it forward.
For more ideas on marketing metrics, consider a new framework based on the four Ps of metrics: perception, production, progressive, and prognostic. These Ps introduce a new approach to marketing metrics beyond tracking activities and marketing outputs.