It pained me to learn that 64% of B2B marketing leaders responding to Forrester’s Marketing Survey, 2024, acknowledged that they don’t trust their organization’s marketing measurement for decision-making.
Let that sink in for a moment: Marketing is a discipline with credibility that depends on data, facts, and insights, and marketing leaders know this. In that same survey, improving the use of analytics to measure marketing contribution and enhance decision-making ranked among the top needs of marketing organizations in support of their business priorities. But nearly two out of three marketing leaders don’t trust their measurement. It’s cause for alarm.
Our data points suggest that multiple failures are undermining this trust, including poor data, inadequate technology, and inadequate levels of user support. Yet the shortcoming that stands out to me most is a lack of alignment. Sixty-one percent of marketing leaders acknowledged that they don’t believe their measurement and analytics are well aligned with organizational objectives and/or strategies for growth.
So what are marketers measuring, and why isn’t it in line with organizational objectives?
I believe the answer begins with where B2B revenues come from. Seventy-three percent (73%) of B2B revenues comes from existing customers in the form of renewals, cross-sell, and upsell, and the remaining 27% comes from new business. While growth from net-new customers isn’t insignificant, the bulk of B2B revenues come from an existing customer base.
But when we look at what marketing organizations measure, we can see that marketers continue to focus on sourcing — or showing that marketing originated the pipeline and revenue associated with (largely) new business. It’s among the most commonly used metrics appearing on marketing leadership dashboards. As of early 2024, 59% of CMO dashboards were tracking some type of sourcing metric (pipeline or revenue).
I’ve written extensively about why it’s time for B2B marketers to ditch sourcing metrics — making the case that they don’t adequately reflect what business leaders expect marketing to accomplish, don’t accurately show how demand originated, and don’t align with the realities of how B2B buying works. And even if your organization demands that marketing focus the bulk of its attention on growing new business, the act of making that first point of contact with a buying group member represents only the tiniest portion of helping that buying group buy — buyers tell us that, on average, they found 18 purchasing interactions valuable when they made their last successful purchase.
When we misplace our measurement focus, it forces us to concentrate on improving the wrong things and investing in the wrong things. And it’s unsurprising that when marketers misplace our focus, even if we move the needle on growing our sourcing metrics, business performance fails to improve. Ultimately, that undermines the trust we as marketers have in our measurement.
I’ve repeatedly heard marketing leaders lament their reliance on sourcing metrics but still believe that there are no better options. If you’re in this camp, I’ll ask you to check out Forrester’s new resource, Capture The True Value Of Marketing: A B2B Marketing Leader’s Toolkit (available for download). It summarizes recommendations surrounding a new set of marketing performance metrics introduced in the Forrester report, Beyond Sourcing: Evolving Marketing’s Performance Indicators (subscribers only).
I’ll be talking more about this issue at Forrester’s upcoming B2B Summit North America as I present sessions on “What’s Undermining Insight-Driven B2B Marketing? Debunking Myths And Misconceptions” and “Don’t Allow Poor Measurement To Block Revenue Process Transformation.” If you’ll be there, I encourage you to say hello and check it out.
