In today’s B2B business landscape, effective marketing performance management (MPM) has become an essential practice for companies seeking to achieve sustainable growth and a competitive advantage.
MPM is a process (not to be confused with Mental Performance Mastery or Manufacturing Project Management!) that uses technology, typically a combination of software programs, to help marketing teams collect and analyze data, predict trends and optimize campaigns. The framework provides companies with the tools they need to evaluate and alter marketing campaigns honestly and accurately. Using MPM helps increase the quantitative or numerical data available to you for each campaign.
By providing insights into the effectiveness of various marketing initiatives, MPM empowers B2B companies to allocate resources efficiently and maximize their return on investment (ROI). Also, there is a reason marketing is always the first budget to get cut in a crisis: This is the department that usually has the most trouble justifying its expenditures. MPM turns that upside down, combining the rigor of a performance driven organization with the precision of business development budget expertise.
Let’s look at the key aspects of marketing performance management for B2B companies, its benefits, challenges and best practices.
The Essence of Marketing Performance Management
Marketing performance management centers around the rigorous tracking and assessment of marketing activities to gauge their impact on business outcomes. It entails setting clear objectives, selecting appropriate metrics, collecting relevant data and analyzing the results. Through this process, companies and businesses can identify what works and what doesn’t, which enables them to refine strategies for effective results.
Benefits of Marketing Performance Management
Informed decision-making: MPM provides valuable insights into the effectiveness of different marketing initiatives, which allows organizations to make data-driven decisions. It helps marketers allocate resources where they will have the greatest impact, leading to more efficient spending and resource allocation.
With the help of data visualizations and dashboards, MPM helps you track your B2B marketing performance in real-time. You don’t need to wait until a campaign is over to see what it accomplished. With MPM, you can see what a single effort is performing at any time.
When you can track in real time, you get a level of transparency that may not be available with all analytics frameworks. Numbers are what they are—without sugarcoating. You’re either meeting your goals or not. What do researchers say? Data doesn’t lie.
Alignment with business goals: MPM ensures that marketing efforts are aligned with overarching business objectives. By measuring the contribution of marketing activities to key performance indicators (KPIs), companies can ensure that their strategies are driving the desired outcomes.
Maximized ROI: Through continuous monitoring and analysis, MPM helps B2B businesses identify underperforming campaigns and make necessary adjustments. This iterative process ultimately leads to better ROI because marketing efforts become more focused and effective.
Enhanced accountability: MPM establishes a framework for accountability within the marketing team. By setting clear goals and measuring outcomes, it becomes easier to assess individual and team performance and make improvements as needed.
Adaptability and agility: In a rapidly changing market landscape, MPM allows B2B companies to quickly adapt their strategies based on real-time data. This agility is crucial for staying ahead of competitors and capitalizing on emerging opportunities.
Think of it this way: Your marketing and operations do not have to clash constantly. In a traditional company, the operations side is always trying to reduce the budget for noncritical expenditures or cash outlays without a direct revenue return. Marketing is always trying to expand this budget, because all revenues that could be attributed to marketing are not necessarily direct, and it is quite easy to frame any expense from marketing as noncritical.
By combining financial expertise, experience with analytics and IT under one discipline, MPM finally brings together the creative aspects of marketing with the justification for the existence of any creative outlay. By placing IT, finance and analytics under the same department umbrella, you also reduce bloat in your company that would come from trying to coordinate these three disciplines.
Challenges of Marketing Performance Management
While the benefits of MPM are undeniable, implementing an effective MPM strategy can be challenging due to several factors:
Data quality and integration: MPM relies heavily on accurate and comprehensive data from various sources. Ensuring the quality and integration of this data can be complex, particularly when dealing with disparate systems and platforms.
Defining relevant metrics: Selecting the right metrics to measure marketing performance is critical. Organizations must determine which metrics directly relate to their business goals and avoid being overwhelmed by irrelevant data. Also, with MPM, you can limit data analysis to specific team member roles.
“One of the most helpful components of MPM is how it breaks down what analytics your team needs to see by role. Every team member doesn’t have to have access to every dashboard or data set. You can set it up so that they only see the information they really need, rather than being overwhelmed with too much data,” according to CopyPress. “Role-based data access is a strategic element for two reasons. First, MPM doesn’t give every marketing employee the keys to the kingdom. A contractor or an intern won’t have the access to go in and potentially change or blow away large data backups as they could without unrestricted access.”
This feature can keep team members from being distracted by data that doesn’t directly affect them.
“Instead of getting distracted by data that are irrelevant to their part of a campaign, they can only see what they need to see. Then, they can collaborate with other team members with different access to get the full data picture,” according to CopyPress.
Attribution complexity: Assigning credit accurately to specific marketing activities for driving conversions is a common challenge. Multi-touch attribution models aim to solve this, but they can still be tricky to implement. For a deeper look at attribution, consider what Adobe and Salesforce have to say about it.
Real-time analysis: As marketing efforts increasingly rely on digital platforms, the need for real-time data analysis has grown. Implementing systems to gather and analyze data in real time can be resource-intensive.
Organizational alignment: MPM requires close collaboration between marketing, finance and other departments. Achieving alignment and a shared understanding of goals and metrics can be challenging.
Best Practices for Effective Marketing Performance Management
#1 – Set clear objectives
Clearly define your business goals and how marketing contributes to achieving them. This clarity will guide your measurement efforts. Remember, marketing does not grow your revenue or market share. Both of those are complex outcomes dependent on myriad elements, many of which aren’t related to marketing.
“Before you can invest in MPM, you must establish your marketing objectives. These objectives can include anything from growing your brand awareness to earning more conversions from your website,” according to SEO service provider Webfx. “Your objectives make it possible to track and adjust your performance with the MPM software. They will also be part of choosing your software and setting up tracking through different channels. For example, say your goal is to earn more purchases through paid ads. You could look for ecommerce-specific software that tracks your buyer journey and see how people come to your website via marketing channels.”
#2 – Choose relevant metrics
Select metrics that align with your objectives and provide actionable insights. Avoid vanity metrics that look good but don’t provide meaningful information. You know what they are because you only look at those when you want to feel good about your marketing efforts, but don’t really want to measure results. Vanity metrics include these examples from the Content Marketing Institute.
The software you select should give you access to various metrics that help you accurately evaluate your approach. Conversions, traffic and acquisition, abandoned cart (key for eCommerce B2B sites!), session duration and bounce rate are among the metrics that fall under an MPM framework.
#3 – Implement technology solutions
Invest in marketing analytics and automation tools that streamline data collection, integration, and analysis.
#4- Regularly review and adjust
Continuously monitor your marketing performance and review your strategies. You should make adjustments based on insights to optimize your campaigns.
#5 – Foster collaboration
Facilitate communication and collaboration between marketing, finance, and other relevant departments to ensure everyone is aligned with goals and metrics.
#6 – Test and experiment
Embrace a culture of testing and experimentation. A/B testing and pilot campaigns can help you identify what resonates best with your target audience.
#7 – Educate and train
Ensure your marketing team is well-versed in MPM concepts and practices. This knowledge empowers the team members to contribute effectively to performance optimization. This is a key step, as a MPM is only as good as those who understand its value and implement it well.
Marketing performance management is a vital practice that enables organizations to enhance their marketing strategies, align them with business goals and optimize resource allocation for maximum impact. While challenges such as data integration and metric selection exist, the benefits of MPM far outweigh these hurdles. By implementing best practices and embracing a data-driven approach, B2B businesses can navigate the complex marketing landscape successfully and position themselves for sustained growth and success.
If you’re interested in greater specifics on marketing performance management, call or email. Let’s talk.
MPM is a process that uses technology to collect and analyze data, predict trends, and optimize marketing campaigns for B2B companies.
MPM empowers B2B companies by providing insights for informed decision-making, aligning marketing efforts with business goals, maximizing ROI, enhancing accountability, and enabling adaptability and agility.
Challenges include data quality and integration, defining relevant metrics, attribution complexity, real-time analysis, and achieving organizational alignment.
Best practices include setting clear objectives, choosing relevant metrics, implementing technology solutions, regularly reviewing and adjusting strategies, fostering collaboration, testing and experimenting, and educating and training your marketing team.
MPM allows real-time tracking of marketing performance, providing a transparent view of campaign effectiveness and ensuring data accuracy.