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Expect More Than Leads From Your Marketing
by Laura Patterson, President, VisionEdge Marketing


Regardless of the size of your company or whether you are B2B or B2C, as the CEO you expect your marketing organization to demonstrate value, make an impact and wisely use the organization’s resources.  It’s understandable that you want to know how marketing is affecting the creation of new customers and the retention of and new business from existing customers.

Hopefully your marketers have embraced various approaches to measuring their effectiveness, program performance and ROI particularly when it comes to demand generation.  If you’re like many B2B CEOs, you probably expect your marketing team to at least monitor and report on three demand generation metrics:  cost per lead, lead volume and lead quality.  If this is the case, you may want to consider some alternative or additional metrics.

A study by Forrester Research study, Redefining B2B Marketing Measurement, found that “the metrics that most B2B marketers say they use — like number of leads generated and cost per lead” — rank in the lower half of the effectiveness list.”  In fact, cost per lead may actually work against a company if they don’t look further into the buying process.  Why?  While one program may produce more leads than another at a lower cost and therefore appear more efficient, what is really important is how many of these leads convert to the next stage in the buying process. If there is a higher conversion rate from the more expensive program, then it is actually more effective.  But if we only look at a marketing program in terms of qualified leads generated and cost, we could potentially be eliminating programs that actually help build the pipeline.

From this standpoint it makes sense to move beyond the lead as the key marketing metric and leverage metrics that will be more meaningful to your organization – metrics that more closely tied to revenue.  Revenue that is sales is for most organization one of the most important business outcomes.  Every company establishes a revenue goal.   This revenue target is generated by some amount of business or dollars from existing customers and some amount of business or dollars from net new customers.  These dollars represent the opportunity dollars the organization needs to generate. So while Marketing may not be directly responsible for closing these deals, you should expect Marketing to generate some or all of the opportunities dollars or opportunity pipeline that will close.  By looking at the opportunity pipeline from end-to-end we can see that generating leads provides only a partial view into Marketing’s contribution.

So what marketing metrics are more aligned with the opportunity pipeline?  We’d recommend that you explore using the following three categories of pipeline related metrics as a way to measure Marketing’s contribution in terms of opportunities:

  1. Pipeline contribution – how are marketing programs and investment positively affecting the number of leads that convert into sales opportunities and new deals?  How has marketing reduced the number of qualified leads that wither and die?

  2. Pipeline movement– how are the marketing programs and investments accelerated the rate at which opportunities move through the pipeline and convert into the deals?

  3. Pipeline value – what increase in the revenue in the pipeline have marketing investment generated?

By moving beyond the lead and by improving our effectiveness and efficiency in terms of these three metrics, you will realize better Marketing ROI.  Ideally over time by monitoring results and analyzing the data, your marketing organization can begin to create more predictable results in terms of contribution, conversion, and value.


The Author

Laura Patterson

Marketing Metrics in Action

Laura Patterson is president and co-founder of VisionEdge Marketing, Inc, a leading data-driven metrics-based strategic and product marketing firm located in Austin, Texas. Her passion and experience for connecting marketing to business results enables the company to specialize in consulting and learning services that help organizations improve and measure marketing performance. Laura’s newest book, Marketing Metrics In Action:  Creating a Performance-Driven Marketing Organization, has just been published by Racom Communications.

VisionEdge Marketing enables organizations to leverage data and analytics to facilitate marketing accountability and operations, measure and improve marketing performance, develop dashboards, and enhance marketing and sales alignment in order to accelerate revenue  and create a competitive advantage. For more information, go to

Many more articles in VisionEdge Marketing and Marketing Insight in The CEO Refresher Archives
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Copyright 2010 by Laura Patterson. All rights reserved.

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