The B2B Marketing Performance Index

Drew: Hello, Renegade Marketers! If this is your first time, welcome. If you’re a regular listener, welcome back. You’re about to hear a Bonus Huddle where experts share their insights into topics of critical importance to our B2B community, CMO Huddles. In this Bonus Huddle, Huddler, Grant Johnson, shares his marketing performance index, an awesome and simplified way of measuring what really matters. If you want to follow along with Grant’s screen, make sure you check out the index linked in the show notes on renegademarketing.com or watch this episode via our YouTube channel. If you like what you hear, please subscribe to the podcast and leave a review. You’ll be supporting our quest to be the number one podcast for B2B marketers. Alright, let’s dive in.

Narrator: Welcome to Renegade Marketers Unite, possibly the best weekly podcast for CMOs and everyone else looking for innovative ways to transform their brand, drive demand, and just plain cut through. Proving that B2B does not mean boring to business. Here’s your host and Chief Marketing Renegade, Drew Neisser.

Drew: Hello, Huddlers. We all know that pipeline, revenue, cost per acquisition, and lifetime value are important metrics because your PE firms and your VC firms will never let you forget that, but they’re lagging metrics, and they don’t capture marketing’s full impact on the organization or any momentum you might have generated. To solve this challenge, five-time CMO Grant Johnson created a dashboard that captures the bigger story, and he’s used it in his last two positions. Today we’re going to actually walk through it. It’s kind of a big premiere, at least as far as this show goes, so I’m excited to share it with you. For those of you who are not watching this on YouTube but are listening via podcast, we’ll do our best to explain the charts that Grant is going to share. Alright, Grant. Hello. How are you and where are you?

Grant: I’m doing great. Drew, thanks for having me. I’m in sunny Southern California, in San Clemente.

Drew: I know it well, and I can just imagine that sunshine and the tennis courts that go with it. Alright. So just in case, we love to do this on this show and with the Bonus Huddles, in case our audience has to leave early, or we need to persuade them to stick around. Can you offer three things that many marketers get wrong when it comes to metrics, tracking, and dashboards?

Grant: The first thing is they track far too many, and we’ve heard the terms vanity metrics – metrics that only matter to marketing. The second thing, and I think it’s probably the most important thing, is they don’t get agreement on which metrics that the CEO, the CRO, the CFO, the C-Suite care about, or the board of investors, and they get hung up on other metrics that they think are important or maybe show great momentum nobody cares about. And really, the third thing is to set a baseline. Those are the 1-2-3, if you don’t listen to the rest of the podcast, although I hope you do.

Drew: I want to go through those one at a time, and this is really tricky. Maybe I’ll start with the second one first, just because I know we want to get agreement on the metrics, and I know that there’s no problem. Nobody’s going to argue with you about CAC and lifetime value and pipeline and revenue, and that’s all they want to talk about. But the whole purpose of this dashboard is to broaden the lens and say there’s more that you can care about. So walk this fine line because, look, they don’t understand necessarily, because they have no training in marketing, why these things matter, and why you can’t just spend $1 and get $1 output. So walk us through this, getting agreements on metrics and getting it a little bit broader aperture, if you will, than just revenue and CAC.

Grant: Right, and it takes a long time, in many cases, to get understanding and agreement on why these other metrics matter as well. So let’s start, and we’re going to go through the market performance index. We’ll start from left to right with market presence. Market presence is really about being there, being found when prospects are searching, looking for alternative solutions, loosening the status quo. Nothing new. And so it measures each of the three areas: market presence, brand strength, and pipeline health, which you say many execs only care about. The third one, each of these has basically two performance indicators and six-four metrics each, so 24 total metrics.

So you think about reach – your media, your social media, your site visitors. If you’re getting less than your competitors, that’s always in the context of your competitive set, your competitive dynamics. That’s less likely a customer is going to find you, don’t even have an opportunity for BDRs/sales to present why they should care, what your value prop is, why you should be in the running. So that’s market presence.

Then brand strength measures both the engagement with customers and prospects and the loyalty. Almost every company, and I’ve mostly been with B2B SaaS companies, you have to land, and then you have to expand. You have to grow those customers. And if they’re not engaged with you, if they’re not looking at your customer communications, your website, your product announcements, if they’re not loyal to your brand, they won’t defend you when somebody tries to undermine you, then you’re going to lose share of wallet. So that’s why these two work together, so that when you create $1 of pipeline, you have a better chance of converting to closed-won revenue. People forget that not all things are created equal. Not everybody’s perceived for the same competitive stature, and so if you’ve got market presence going well, brand strength going well, your pipeline is going to be more productive.

Drew: So I know that, and you know that, and you’ve seen this, but I’m going to push back on a little thing. You’ve described – almost an educational progression where say, hey, “If they haven’t heard of you, you’re not going to get on the list. If you don’t have strong customer relationships and brand strength, you’re not going to stay on the list.” And then eventually we can talk about revenue and pipeline. We know we’re going to have those, but those first two, those are the parts that I feel like often get lost in the conversation. “Oh, you’re just talking marketing speak now.” Help us get to how did you sell this in to a CEO whose, look, their board is always going to say to them, “more revenue, more revenue, more revenue, more customers, more customers, more customers.”

Grant: Well, there’s a couple of ways. First of all, there are certain CEOs that have more of a general manager [perspective], maybe less of a technologist or financial bias. They have more of a general view, and they understand that customers, whether B2B or B2C, are influenced by intangibles and their perceptions, not just by something that’s purely functional and concrete. And so I was fortunate in my journey as a CMO to have the CEO, and we’ll discuss it today, Emburse, over three years, Eric Friedrichson, understand that marketing is an equation, and it’s comprehensive. Marketing ultimately touches all aspects of the buyer’s journey. They may not be the lead source or the origination of the opportunity, but they’re going to touch it. And so he and I agreed that I would measure 24 various metrics across these three areas, so we could look at if something went up and something went down, on the whole it went up, it was good. Sometimes they’re all moving in one direction in a positive way. Sometimes you have market disruption. And so I still think that it’s very unlikely – if you raise your hand if you’re one of those super fortunate folks, I think you blogged about this recently, Drew – that you’re allowed to do everything and not questioned on anything. He understood it. I gave him objective quarterly reports on how we were doing, and so we had an ongoing dialogue, but almost always, you’re going to have to do some level of education. And if you set the baseline, you can show that, hey, these two numbers went up, and see how we got more efficient in pipeline. There’s no substitute for just showing the numbers because that’s the language of business that everybody understands.

Drew: So, alright, the post you’re referring to is my tongue-in-cheek “There ought to be a list of the luckiest CMOs in the world,” because what you’re basically saying is, if you are fortunate to have a CEO who can think that there is an equation, that this is not a spend $1 get a customer world, then you are likely to be able to sell this broader framework of measurement. So I’m going to go back to your – so we’ve covered basically baseline and agreement. Before we get to the chart and the index, you talk about too many metrics, and you’ve narrowed it down to 24, but what I like about your index is that it’s really – you could ladder up to three buckets and two KPIs, so you could get it down to just six if you really wanted to. I think that’s right because if you actually had to talk about 24 metrics to a board, they’d be going, “What are you doing?”

Grant: Well, or just three, like I’ve had a board say, “How are we doing with analyst relations?” Well, that influences – well, like they know who we are. Our brand strength helps us. “Oh, we need to be in the upper right.” Of course, you do. You’re marketers. They don’t – they look at your website, they look at – if you’re at a Gartner event, for example, all these things influence the influencer. So you’re right. I think you could reduce it to three metrics. But as I’ve said to others, and you know, I’ve had a number of Huddlers – thank you all who tried this out, and anybody can try it out – we’ll talk later about that. What matters is, like, there may be five or maybe 15. You need to get agreement on what matters, and you can measure anything you want. I had 100 at my last company, but I didn’t report on more than just a couple, right? So that’s exactly right, Drew.

Drew: Let’s put up the index so we can talk about it and where the variables are. But what’s important in this dashboard – we’ll call it that for the moment.

Grant: Yeah, that sounds good.

Drew: Alright. So hopefully those of you watching this – so what we’re seeing is the marketing performance index and the three big, broad buckets that Grant talked about: market presence, brand strength, pipeline health. So let’s do it one at a time. Let’s go back to market presence. And what are we really resolving here? I see some copy under market presence, but what are we actually measuring?

Grant: Well, customers are exploring, and just out of intellectual curiosity, they’ve got a problem that they need to solve. They’re trying to see if there’s a better solution to the one they adopted two or three years ago. I just picked these four because I think, as you mentioned at the outset Drew, that they’re more directional as to how well you’re doing comparatively. Like earned media and social media don’t exist in a vacuum. You either get coverage over your competitors or you don’t. You either are building followership engagement or not. You either have a dynamic site or you’re lagging behind your competitors. And the same thing with events. Events reach is really about your industry – there may be 5, 10, 15 events that most of the customers or prospects go to. Are you there? Like I’ve had what I call intercept marketing – they didn’t know we existed, we hadn’t invested in their brand, but they saw our tagline, they saw our value prop. They talked to somebody at the show floor and said, “Hey, you know, you might be someone I should consider.” So that’s the market presence reach. Then share is related to that. It’s really about measuring your share of voice in the media. Let’s measure what percentage of indirect sales, what sort of search you’re getting with SEO, with your names. Some companies do well with SEO because they’ve got a dedicated person, but nobody knows their brand.

Drew: So stop for one second. I want to stay on reach for a moment. One: I just want to answer a quick question. What do you mean by events reach?

Grant: What I mean is you pick – again, there’s a definition for all these, I’ll share that later – but you pick the events that you think are most influential in your industry, whatever vertical or verticals you serve, or whatever type of industry customers will go to those events. So you want to be present when they’re exploring new solutions, or they’re trying to decide if they should stay with existing solutions. So that’s what I mean by reach. It’s basically a simple metric of, are you increasing your reach by 10% a year, by 20% a year, 30% a year? It’s based on your increase of your presence.

Drew: Got it. So we baseline, say 2023, and we say we went to five events, right? And we’re just going to ladder that up to 100, and then next year, we go to six events, and now we’re at 10% over what we were the year before. Is that sort of how you get to some kind of index per quarter?

Grant: Yeah, exactly. And when I’ve talked to numerous Huddlers, Drew, I felt like, “Hey, if you don’t measure one of these 24 or three of the 24, you know, what do you measure that matters to your business? That matters to the C-suite, that matters to your investors,” right? In the things that they’re talking about, so you can substitute anything. But if you’re going to substitute events reach, it ought to be something that talks about where customers can find you. It could be a review site. You could put that in there if you wanted to.

Drew: What’s interesting with this is because you could also try to measure event-like absolute reach, like how many people went to the trade show, or how many people actually came to your booth, right, and signed in, which may or may not be an accurate measure. Some people would be there with a clicker or something, but one way or another, the point is, it’s more about the trend than it is the absolute in almost all of these, right? So even if we looked at earned media, which is the amount of press coverage that you get, you could look at it if you wanted to ,you could look at it on impressions, total impressions gained, or you could do it on a just stories written basis. But either way, you’re looking for an upward or downward trend. And you’re going to index with your baseline, right?

Grant: That’s exactly right. And since this is a Bonus Huddle, I’m going to offer a bonus, I figured out the absolute equation for events. Because events, especially physical events we’ve all returned to, those are costly, because you want to measure not just increase. You want to measure coverage and composition. And what I mean by that is, we all have certain segments we sell to. And so are there more people from those segments? Small, medium, large, healthcare, financial services, government, going to the event or not. And composition is about your personas, what are the decisions, what are their titles? If you’ve got a bunch of low-level tire kickers, to use a phrase, you could increase by 10% but you’re not getting decision-makers. So you can always get more sophisticated. It’s an overall growth metric. But with events, you can take it to the next level deeper, to make sure you get the right people going to your booth and having good, productive conversations.

Drew: One of my favorite expressions when we covered events for a whole month in CMO Huddles was “revenue in the room,” and we talked about that where the sales guys have to book meetings as a result. And you could look at it, and you could say revenue in the room could be another way of looking at it. And you baseline that. Well, in Q4 the revenue in the room at these trade shows was X. A year later, it was Y. Did it go up? Did it go down? Did it go sideways? Because this is as much about forward progress as it is about the absolute, and if you get stuck in the absolute, you’re going to hurt yourself in this thing. You know what’s really hard though, with earned media – and I think some folks will take look – one article exposure in the Wall Street Journal could be worth 1,000 in a little trade pro or vice versa. Sometimes that trade pub could just be the one. So some of these are trickier than others, right?

Grant: Right, and that’s why you can put weighting on these. You might have scores and weighting factors. You just have to figure out again the baseline that matters to your business and go from there.

Drew: So we’ve done reach. Now we’re talking about share, and I’m just gonna – there’s four segments under share: share of voice, indirect sales. So let’s stop with share of voice. Do we need to have a Meltwater or Muck Rack to measure that share of voice?

Grant: Ideally, if you have automated measurement systems, it’s better, but you can count them up, right? You can certainly base it on your search mechanisms, and you can just compare that way. But yeah, it’d be better to have one of those services that way. You’re presenting objective, accurate, comprehensive data.

Drew: But we are talking about essentially digitally tracked impressions, right, for share of voice?

Grant: And you could get qualitative, but what’s the value of a feature versus a mention versus somebody actually using your value prop? You know, on message, that’s even more valuable. But it’s a raw measure. Share of voice is a way to start. And in most companies that I’ve been at, you try to increase that share little by little.

Drew: Right. And what’s funny about that one is, if we did it based on just – we index it, you could have a really low share of voice, and you’re making progress, but you still have a really low share of voice. And so it would be nice to see that in that particular case, if you have a low share of voice because you’re underspending, it would be nice to be able to have that show up. Okay, then we have indirect sales percentage. What do you mean by that?

Grant: I mean, how much of your sales are from partners, resale, referral partners? It’s not required. There are many companies that get to a billion and beyond that are all direct. But in my experience, 20 years of doing this, if you’ve got these channels, these OEMs, partners or referral partners, they’re going to be telling your story, they’re going to bring leads, they’re going to reinforce your position as the vendor of choice within a competitive battle. And so they just – it’s an indicator of your presence because other people know you exist, that maybe they’re part of your ecosystem. And I just think it helps you. Where I’ve seen companies grow in indirect sales, they’ve generally grown revenue. If you think about the levers of the business, there’s product, there’s channel, there’s geography, things like that, share of wallet, and this is one of those that really, if you can build – which I’ve been fortunate – good indirect systems, they’re going to be part of making your number will come through channels.

Drew: So, when you say indirect sales as a percent of total, what’s interesting there is you could have that number go up because everything else is down. So how does that work?

Grant: Look, there’s always going to be something that you have to look at in the context of all the metrics. You could have that go up, but if you look across the board, your NPS is going down because you cut customer support by 30% and it’s taking you two days mean time to resolution for a ticket. So your customer satisfaction goes down, and you’re losing more customers. These other factors are why you look at whatever you feel is the cohesive set. For me, it’s 24, and if that’s going up but nothing else is going down, you’ll probably be surprised if your overall revenue and bookings are going up. Something’s driving it there, and this helps you figure out the complementary factors. I think this is one of those that has an outsized impact. If you’re 10% indirect and you go to 40% indirect, your share of the potential market you can get to is probably going to be bigger.

Drew: Unbranded search, that’s just people typing in your name or your category?

Grant: They’re typing in the problem they’re trying to solve, like “don’t get hacked,” and then branded is the name you use for your product. You could use a descriptive term, or you could have a proprietary term. It’s just a couple of different ways of seeing what people know about you and how often you show up.

Drew: So, I get with branded search because it’s like of the total times people are searching, how many times are they actually searching you by name? And that one, if people are searching by name for you more, clearly your awareness is going up. It is a great thing. I don’t quite understand unbranded search, because someone else could be driving the category and saying, “Hey, we’re creating a new category.” They’re doing a great job with it, and you’re not getting any of that because it’s all associated with their brand. How does that one work?

Grant: I would use Google Analytics or something similar where, SEO, if you’ve optimized your web property, your web pages, your landing pages, your key terms, and those are the terms that are looking to solve the problem. You know, “optimize cash flow,” and then they come to your website, it will show up on your research reporting that you got an unbranded search. There may be different sub-terms they use, but you’ll know. They weren’t looking for Inburst CRO River, which is one of the companies. They weren’t looking for a CRO River Travel and Expense solution. They were looking to lower their travel and expense costs.

Drew: So we’re really talking about keywords owned and keywords.

Grant: Exactly, and you define those keywords that you track. 

Drew: I got it. So there might be 30 keywords in the category that really matter. You rank in the top five for three of them today, but if you get eight of them tomorrow, you’ve made headway. I get it. Okay, so you’ve created some sort of number for each of those, and at the end of the say reach one, you have a score for reach, and that adds up, and then you have a score for share. And on the chart we’re looking for, we see that in this particular case, it needs improvement on reach, but you’re doing great on share.

Grant: This is actually—I’m going to show you after this. This was trying to land on one page. This was not scored. That’s why those were all blue. You can either be “needs improvement” if you’re below 60, you’re 70 to 89 “good,” you’re over 90, or negative.

Drew: Got it, got it. Okay, we’ll get to that in a second. 

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Drew: So let’s move on to brand strength. And what are we really measuring when it comes to brand strength, not specifically, but on a general basis? What are we covering?

Grant: I put it into two parts: engagement and loyalty. Engagement is both for prospect customers, but it’s generally even more important with prospects. So your social media—I use the example: one company could have 10,000 followers, which I’ve been there. Another can have 50,000, and the company with 50,000 followers has less than 1% engagement. The company with 10,000 has like 9%—they love that they’re relevant, they’re meaningful, they speak to that particular prospect customer segment. And so engagement is something you can track, and it shows whether you’re gaining momentum or you’re losing it. So that’s engagement. There’s events that you do, customer round tables or regional events, community. I’ve talked in a number of Huddles where they don’t have an online community, but maybe it’s the customer advisory council that they just try to see if that’s growing or getting more fans, more influencers. Are we building a following? And then third-party events is really like where else you’re going to go. You can go to whatever your industry, whoever runs those events, or like the main analyst events, and again, that just shows how you’re doing there. So that’s engagement.

Drew: Okay. I want to make sure that social media, we’re tracking some form. Again, it depends on the brand and so forth, but it could be engagement per post. I’m not sure if you settled on a specific social media.

Grant: I just do month-over-month overall engagement. You set your baseline when you do five posts, or you do four posts—what’s your total engagement on those posts?

Drew: Got it. And then we’ve got owned events that people are showing up to and so forth. Hopefully your own event budget didn’t get cut, because that’s not going to be good, but you’ll see it there. Okay, community—what I love about that, it just reminds everybody you probably should be thinking about that. I mean, you just could be looking at it as user conference. You could be talking about customer events, something where you’re bringing your customers together, and then third-party events. How do we distinguish between third-party events and events reach?

Grant: It’s not owned. The events reach is just the total number of events as a percentage that you’re in. The third-party event is how you know what’s the total reach of all those audiences. So if you go to some little conference table top I used to do in cybersecurity, you get 100 people. Or go to Black Hat, you get 100,000 people. That’s more of a quantitative measure.

Drew: Got it. Okay, let’s now go through loyalty and the four measures that you have there.

Grant: These actually are unique in the market performance indexes. And I’m not defining these. These have been defined for decades, certainly at least two decades, for sales. Net performance: if you’re below 30, you’re underperforming; 30 to 70, you’re good performance; over 70 is world-class. NPS has been around a long time—they define it. CSAT, same thing. If you’re above 90, it’s good. If you’re below 90, it’s average. You’re below 70 or so forth, you’re in trouble. Gross retention is basically of 100 customers, how many do you retain year over year? And net retention is what’s the net retention dollar? CFO partners of ours love this—is like even if you only retain 95, which by the way is good, if you grow each customer 10%, you’re actually at 105%. You have the 95 plus they’re at 110%—you add that to the 95, you get to 105. Again, some companies aren’t SaaS, maybe they’re on-premise, or maybe they just don’t track it that way. You can substitute other loyalty measures. But if you’re getting more of your customers’ wallet, that’s a good thing.

Drew: Right. I have such a problem with the NPS because it is such a moment-in-time measure. It’s like if you just talk to customer service and you had a good resolution, you’ll give a high score. If you’re about to call them, you’ll give a low score. And you won’t really know what the issue is.

Grant: Well you won’t know but I think, just like anything else, if you start looking at quarter over quarter, month over month, year over year, there’ll be causality as to why did this go down or why did it go up. You can figure that part out. You’re right – point-in-time metrics are crazy to just make judgments on.

Drew: Right. Okay, then we get to – So that’s loyalty. And again, I think you may find that customer satisfaction is a better measure for you than net promoter, in which case you can find another one in there to help you assess loyalty. But I like the distinction between gross retention as a percent of customers and net retention as a revenue scenario. Because if you keep all your big clients and you grow them, life is pretty good, even if you lost some of the smaller ones.

Grant: Most of us assess experience that deal at risk. And we’re not putting the $1,000 a month customer – we’re putting the 10 or 100,000 a month customer that’s going to make a difference in the business.

Drew: Right, exactly. Okay, so now let’s talk about pipeline health.

Grant: Yeah, for me, pipeline health is probably where I have 100 metrics, or dozens, for a lot of people, and I just picked four that I’ve seen. Like, if these are going in the right direction, if you’re growing the number of top of funnel leads, you may not be efficient in converting them, right? You may need to score them better. Conversion is basically if somebody comes to your website and gives you their name – they could be “allow contact me,” or they want to contact sales, or they want to download gated content. But I was talking to Bryan Law, in our group here, and we all know Bryan at ZoomInfo. And he said, “Hey, for me, it’s like they do the demo, right?” Or somebody else, it might be the trial. You decide what’s the most important conversion that shows you’re getting to opportunities, right? It’s the path to opportunities. Hopefully the path to closed-won business. Pipeline multiple is going to vary by every business. I’ve generally found in 20 years of monthly enterprise mid-market sales that you’ve got to have the 3-4x. If you’re above five, it’s easy. If you’re below two, it’s going to be hard. I know some companies where they’re not even 2x and they’re struggling every quarter because you think about a 2x sales – sales has to win almost 50% of the deals, right?

And then ROI is however your CEO or board wants to measure ROI. You could measure it on an absolute basis of all dollars, marketing people, programs, and tech stack – how much revenue does it produce? I actually love the subcategory of ROI program dollar, meaning that I’ve already covered ROI for the overall team and technology. If you give me another $100,000, how much revenue can I produce? And if I can produce $400,000 closed-won business, I’ve had CEOs and boards tell me, “Just ask for the next $100,000 once you’ve proven it.” So the first time is going to be hard to do the business case, but if you can prove it and you can show how you did it, then ROI could be a difference maker.

Drew: Yeah. It’s such a tricky one, and I believe you have to work with your CFO to get that number believable, right? Because they’ve got to fully load it and decide what costs go in. And I also imagine it’s really hard from a time frame standpoint if you have a long 18-month sales cycle – that gets tricky. But before we go to that, because I want to come back to leads for a second, it’s funny, we’ve sort of all over the course of the last two years said pooh-poohed leads, because leads – you can’t eat leads, as they might say, and they’re not really anything until they actually become an opportunity, right? Because there are lots of ways that drive beefing up your lead number and then watching your conversion numbers just tank because they’re not really leads. They’re just people who might be in the market five years from now. So why did you keep leads in here?

Grant: Well, I mean, the reason I kept it is, look, you – I’ve met at BDRs, a lot of us have many times – you’ve got to have contacts, and you have to have calls, and you have to have conversations that eventually convert them to somebody who wants to talk to sales. You still really haven’t converted them, right? But just using those four Cs, and I think if you want to get precise, use MQA, or whatever other terms you want to use. And like that, it’s got to score 100 – it’s got to be somebody who’s a decision-maker in your personas, and then that’s a lead. It’s not just somebody who responded or they opened an email. You have to determine leads where it’s going to be meaningful to your business. And for me, I’ve looked at qualified leads, I get a very good conversion. If you see on the right under progressing. If they don’t make it to NQL, maybe you just put MQL in there. You have to decide what leads, but if you don’t get top of funnel growth, I don’t care how efficient you get – you can’t just get efficient and grow. You can’t cut your way to growth. You’ve got to ultimately grow the total pie.

Drew: Wait, you can’t cut your way to growth?

Grant: Ah, well, tell PE that. 

Drew: Yeah, exactly. We’ve had that conversation before. Okay, so I appreciate the fact that that could be MQLs, and what I also appreciate is, and this is, I think, really important – you’re not leaving that one to just stand out there on its own, because you are immediately going from the next column. You show MQL to SQL, which is really important, and you’re also showing MQL to conversion, which is really important. So, and you can’t get to either of those without, as you said, there’s got to be somebody who’s actually talked to somebody who said, “Yeah, I’m interested.” These days, marketing should be really, really good at qualifying what looks like an opportunity. Okay, so we’ve got – we’re gonna call it – I can’t use the leads. I’ve just too many times that people – So we’ll call it marketing qualified leads. Then we have conversion. And what we’re talking about conversion there is that they actually became a customer, they signed a deal?

Grant: Somebody who gave you permission, quid pro quo. You gave them content to follow up with you. They’re added to your database. They want to talk to – maybe you’ve got a conversational agent, and they want to have a conversation with the BDRs, SDR, and so they’re willing to engage.

Drew: Yeah. It’s like, they want to see the demo, talk to a salesperson. Whatever you decide conversion is, but it’s not, they’ve signed a contract?

Grant: No. On the far right, you know, closed-won business.

Drew: Right, right, okay. And then we have pipeline multiple, which is essentially another way of saying coverage for salespeople.

Grant: Yeah, exactly. It gets really tough when you’ve got multiple sales teams that – like every sales team needs three to 4x. It’s hard to uniformly create pipeline. There’s ways you can do it with ABM. But enterprise sales are going to tend to take longer. They’re going to need more multiples, and more transactional SMB businesses – maybe you could have an e-commerce site, they can make the decision on the web. You probably need a lower multiple. It’s the multiple of your bookings target. If your booking is 10 million per quarter and you need a 3x, you need 30 million in pipeline, and that could be realized within a given quarter.

Drew: Okay. ROI, we’ve already talked about. Again, working with your CFO to define what that is. And then progression, we’ve got MQL to SQL, so just turned over a bunch of marketing qualified leads to sales, and they said, “Nah, these are no good.” 

Grant: Yeah, that does happen. 

Drew: It does happen. But still, we’re looking at that ratio right, and we’re tracking that ratio, and ideally, that ratio is getting better, not getting worse. Okay, then we have SQL to, I’m a sales qualified one or sort of..

Grant: Qualified Opportunity. MQL, also call that sales skeptic lead. I call it sales qualified lead. BDR touches it. But again, you may only have two stages. You have three stages. It’s all the funnel. You need to show the progression in velocity. And so you need to look at how these things are going. And you can look at them by team, by geography, by product line.

Drew: Okay. And then close rate. We’re talking about now we have sales qualified opportunities. How many of those did they close?

Grant: And that’s when they first enter the pipeline. So let’s say the five-stage sales process. Stage one sales is a qualified lead SQO. And so how many actually get to close-won contracted business.

Drew: Right. Okay, and obviously, we want that number to get better, not get worse?

Grant: Right. You did a survey recently, Drew, on your blog, and I was a little concerned to read it as well, because I had not experienced quite that. I know the average is like 17%. Let’s say it’s even 20% – you’ve got to have a 5x multiple, right, to make the number. So you’ve got to really watch that one closely. You have to figure out, like I do, win-loss analysis. Was it price? Was it engagement? Was it features? You know, was it just we’re making slow decisions because of the economy? You understand why it’s changing.

Drew: Right. And so your last one is win rate. What’s the difference…

Grant: You could substitute close rate for something else. I picked win because what I found is, in looking at a lot of win-loss analysis over the years, is you generally have certain head-to-head that you know you’ve got to win against your top two competitors. And let’s say you’re winning against a bunch of upstarts and other people that aren’t proven, and you know you’re celebrating probably too soon, but you’re losing somebody else’s gain remarkable momentum. So it’s a sub of close rate. It’s a subset, and it’s when I track head-to-head against competitor A, competitor B, my fiercest competitors – those are the ones I want to beat. So that’s why I like to look at it, and sales likes to look at it, and it helps. Hey, I remember when I was at one company, says, “You know, we were beating IBM 50% of the time, they bought us.” That was filed up. By the way, it was true. So that’s why win rate is key.

Drew: Alright, let’s go to the next slide and look at this with numbers or with the color coding. 

Grant: Let’s look at the score. First off, thank you Drew and thank everyone listening and participating. I know it’s a lot to get through. We’re now going to do the speed drill. It’s really easy to do. Takes about 30 minutes. I can just walk you through it, and it’ll produce a score like this one. So let’s go through the scores. I’m not going to go through the individual scores, but it’s color-coded to make it a little bit easier. So this happens to be a company that was doing fine in reach, engagement, loyalty, pipeline progression – they’re all just solid yellow. But it kind of catches your eye because you know you can improve but in share, they just really weren’t… they didn’t have PR, like they weren’t invested in PR. And just like social media was anemic, and it just means they’re kind of losing momentum. So they kind of point out like there’s a couple areas that they could easily, you know, you don’t necessarily have to have a full-service agency, right? You can pay per article, or you can have freelancers, but you’ve got to be in the conversation. So when you do this, you start to see, and I’ll go to the next couple, you start to see like there’s some… every company is going to be unique in what they can do where they have budget resources, human staff resources to pay attention to something. Some things say, “Hey, I can’t deal with that now, this is more important.” So that’s one score right there, and then some quick diagnosis on what to do.

Next one. So here’s the company. These are all companies, let’s say between 25-250 million, because I can’t name who they are. I always promise anonymity, but it’s something that you can certainly see parallel in. This is a company that was really good in a lot of areas, but in their engagement, oh man, the customers – they always show up to their events. They comment on the post, well-written post, took value from it right away and so forth. And they were like the top score you can get – 100, right? It should have been flashing green. However, the red slash this progression, if you look at the scores, you can get 10, 15, or 25 if you’re listening. It’s just how do you get to 100, right? I won’t do the math in my head, but trust me, the best you can get is 100. And so if you look at what they are doing in their MQL to SQL, that first number of 10, they just… maybe they’re not qualifying. Maybe they’re going too wide of a net. Maybe they need to narrow do what it’s called the happy path. You know, who progressed from MQL to SQL, SQO to won, and why and what period of time, and what do we do? You can look at the buyer’s journey. What touches, how many touches do we have, right? And so, and their win rate was terrible too. It was like 14%, and so these are some of the things that they can do to try to bring the win rate up. Certainly, that’s why, partly, you’re going to have to have enough at-bats, but they’ve got to do better progressing to get more. Otherwise, they’re going to have to build 8x, which is.- I don’t know who has the budget for that anymore.

Drew: Let me stop you on this one, because in this particular scenario, this is my worst scenario, right? Because this is, “Hey, you’re doing okay with market presence. Hey, you’re doing really pretty well with brand strength, but your pipeline is a problem.” So why are we even bothering measuring these other two areas when pipeline is a problem and the solutions that you know to pipeline are qualifying better or something, because you can’t point to these other ones, necessarily.

Grant: They could have had a 40 instead of a 50, and it could be worse, right?

Drew: My point is simply all eyes on the board and the C-suite and the CFO are always going to go to pipeline health first, right? And as marketers, what we’re trying to say is there’s a whole story here. There’s a whole progression. And so what we’re basically saying at this point in time is we’re doing pretty well in market presence. We’re doing really well in brand strength. Pipeline is a problem. So either we’re selling to the wrong people, which means we’re marketing to the wrong people, or our salespeople aren’t very good, or our product pricing is a problem, or some other thing, right? Which, again, it’s not a marketing problem.

Grant: In this case, it’s more of a sales problem. It could be the 80/20 rule – only 20% of sales folks are hitting the quota. Productive could be a sales discipline. I’ve been at companies where we determined that because of the desire to make flow, to make the numbers show book points to the board, they were progressing stage to stage too fast. So you just have to do the diagnosis and say what do we correct. In this case, because the engagement of pipeline was healthy to your point, Drew, they probably should narrow the set a little bit. Because when you start looking at the opportunities which they closed and the wins they didn’t get, there are certain areas where they really didn’t stand a chance. Maybe it’s competitor C – they do fine against competitor A and B, but avoid competitor C because they’re locked into the financial services vertical. They’ve gotten 80 of the top 100 or whatever, you know, 70 of the top 100, and long if they’re legal or something like that. So you’re right, they’re still going to over-rotate on sales in this case. And there are some things Mark can do with this case – progression really was a sales execution challenge.

Drew: Okay, which, of course, we all know that marketing doesn’t win regardless. But the other thing I’m wondering about is, because these other areas are healthy, is it possible that in the moment of time, this was just a bad quarter, but in two quarters from now, things are going to be better?

Grant: Yeah, exactly. I’ve seen quarters made by whales, and in every company I’ve been at, you know, new products suddenly they’re adopting that one. And there’s no single factor. They’re all interrelated. So long as you’re looking at enough, you can determine the reason why and what to correct about it. But yeah, this could have been just a bad quarter.

Drew: Okay, let’s go to the next example.

Grant: What I thought I’d do here is just jump into a two-year view. And again, it’s a bit of an eye chart. But what’s instructive – this is what was done when I was at Emburse. When I started doing this in Q1 of 2020, I looked at it quarter by quarter. I mentioned the aggregate score’s top score is 100. We started at 62 in the first quarter of 2020 – see that the graph on the top, the numbers are right. But I also looked at what was happening externally. COVID hit in 2020, right? And then we put an inbound system in that got us 5% lift there and re-platformed the website. We were on spaghetti wire and whatever – baling wire and spaghetti code or something. Then we finally implemented a cross-sell system. Then there was a market pullback and a new product launch. So part of what’s good is trying to determine what were the leading causes of improvement or where you fell short.

Drew: But you know what you see is the score is getting better over time. And so in theory, the business was better over time.

Grant: Yeah, and that’s exactly right. Business was better over time. The company was doing better. I think most businesses try to improve across the board. Every function tries to say, “Hey, that’s why you have QBRs and key KPIs.” And we were just executing better as a team, better as a company holistically.

Drew: And of course, obviously this marketing performance index includes some measure of sales, so it’s not independent of them, but it would be interesting to just overlay sort of either both net new revenue and overall revenue on top of this thing, and to show either the lagging correlation or something because it’d be really interesting. Ultimately, you know, these numbers can’t stand alone, right? You still are going to have to show that trend, what had an impact.

Grant: That’s exactly right. And look, I can tell you that in year one to year two, I worked very closely with the Head of Install Base, Cross-sell, the Head of Customer Success, and my marketing team. All three of us – it was well orchestrated. We grew 100% year one to year two. In cross-sell we grew 50%. We would never have done that if we weren’t all working hand in hand, if we didn’t have the product innovation and higher product adoption, right? And products that worked well as advertised, if you will. And so it took all these things working together. It wasn’t like some miracle marketing tactic or some silver bullet, or some sales hero that made the entire year. They may have made one deal, but this was the cohesive set of cross-functional go-to-market team working together – product, sales, marketing, customer success – to get to that outcome.

Drew: So, and I think if we sort of wrap this up, I mean, the thing that really, it gives you, once you get buy-in that I’m going to track these things, and you start to show this over time, it gives you something else to talk about rather than just revenue, right? And because it is this journey, they know it. And you know, I mean, you also shared at one point the journey map that you did, at least privately with me. And it was like, “Oh my God, look at all those touches.” So I feel like this strengthens – So before we wrap up, I think it would be helpful just when it comes to creating a metrics dashboard, give us two do’s and one don’t.

Grant: Well, the first thing to do is you’ve got to have measures that will stand up to scrutiny, right? That you’re not making these numbers up. I had instrumented from Salesforce reports, which is the source of truth that most companies [use], is a Power BI dash. You could do it with Excel yourself. And so you go check the numbers – I’m not making this up, so that’s the first thing to do. The second thing is you have to get positive affirmation that these metrics matter, or these metrics matter most, and those are the ones that you’re going to communicate. You may still track the other ones, you still make changes. Nobody cares about your bounce rate or your time on site. Probably, they care if search terms don’t show up on page one, right? What you don’t do is you don’t read the audience, you don’t ask for feedback, you don’t talk to a board member before the board meeting to say what they want to hear. Don’t review it with your CEO, right? And you also don’t drive your team crazy. Don’t just measure stuff because you can – measure what you think is going to make a difference, because we all got a lot to do. Put GenAI to work, do some of it for you.

Drew: So, alright, I know you’re still looking for some beta testers, right?

Grant: Yeah, exactly. You just reach me through the Huddles or grant@cmomentor.com. I’ve done it with a few folks. Whoever wants to do it, just book 30 minutes and I’ll walk you through how to do it, and then we’ll do one more call. Could be 15 minutes, and I’ll send you a PDF, I’ll send you the Google Sheet, and you can set your own baseline, figure out what your right metrics are. And I just added to the databases. They’re all anonymized, and that way I can, if I need to tweak a number to represent best practices over time, I can do it.

Drew: Awesome. Alright, thanks, Grant. This was a fantastic Huddle. I hope you all enjoyed it. Thank you.

Grant: Thank you. 

If you’re a B2B CMO, and you want to hear more conversations like this one, find out if you qualify to join our community of sharing, caring, and daring CMOs at cmohuddles.com.

Show Credits

Renegade Marketers Unite is written and directed by Drew Neisser. Hey, that’s me! This show is produced by Melissa Caffrey, Laura Parkyn, and Ishar Cuevas. The music is by the amazing Burns Twins and the intro Voice Over is Linda Cornelius. To find the transcripts of all episodes, suggest future guests, or learn more about B2B branding, CMO Huddles, or my CMO coaching service, check out renegade.com. I’m your host, Drew Neisser. And until next time, keep those Renegade thinking caps on and strong!