Is your method of measuring ROI holding back your long-term growth?
If you were trying to assess a diner’s satisfaction with a three-course meal, it wouldn’t make sense to poll them for their opinion when they’ve only eaten the starter.
If you are communicating with your executive team, it’s important to focus on where you are relative to the goal
And yet, when it comes to measuring ROI of their B2B campaigns, many marketers are making a very similar mistake by failing to take the full length and complexity of the customers’ buying journey into account.
Research by LinkedIn found that 77% of marketers measure the ROI of their campaigns after one month – despite having a typical sales cycle that is longer than that. Of those, 55% admitted to having a sales cycle of more than three months and only 4% of respondents ever bother to measure ROI over a six-month period or longer.
The reality is that the length of the average buying journey in B2B purchasing has been trending upwards in recent years as more millennials (who tend to research B2B purchases more rigorously than their generation X and baby boomer counterparts) become decision-makers and budget holders within their organizations.
LinkedIn thinks it’s time for B2B marketers to think seriously about slowing down the way they calculate the ROI of their campaigns. While more intensive and diligent research might mean longer sales cycles, the flipside of this is that more time provides more potential opportunities to reach buyers with helpful content.
The long and short of it
Research from CSO Insights shared in 2019 found that three-quarters (74.6%) of B2B sales to new customers take at least four months to close, with almost half (46.4%) taking seven months or more. The general trend of lengthening sales cycles was heightened further by the onset of the global pandemic in 2020, along with the resulting economic impacts.
According to the LinkedIn States of Sales Report 2020, 44% of B2B organizations have seen their sales cycles increase in the past year. Despite this, marketers exist in a world where they are under serious pressure to deliver results fast and often require concrete proof of ROI to secure continued investment in their campaigns and strategies. This makes slowing down the measurement process a task that is easier said than done.
However, taking a longer-term view of ROI measurement isn’t the marketing department deferring accountability. It’s about getting a more accurate, reliable picture of marketing’s true impact. How can you convince your senior team to start thinking about the bigger picture in relation to ROI?
The research referenced earlier is pretty compelling evidence that, if you insist on measuring the ROI of your campaigns too soon, not only do you fail to determine the full value of your marketing strategy, but you base your future decisions on incomplete data that could lead your marketing strategy down the wrong path.
We’ve become accustomed to instant answers, when often the proof of performance is still stuck in the pudding. Acting upon those half-baked findings can do damage to a business.
This is a key point to get across to your executives. Show them the statistics and explain the circumstances behind them. When trying to influence change, it’s always important to illustrate the downside and danger of sticking to the same old short-sighted strategy.
Not all marketing ROI is the same
Another point that can be difficult for marketers to get across is that measuring the ROI of a display ad campaign is not the same as measuring the ROI of, for example, a content marketing campaign, which would tend to have a more complicated and indirect connection to revenue.
If you are communicating with your executive team, it’s important to focus on where you are relative to the goal, with just enough detail to show progress or explain unexpected pivots.
Even if it’s unwise to measure ROI before your efforts have a proper chance to play out, that doesn’t mean you can’t measure anything. Key Performance Indicators (KPIs) can be established to track the journey, show progress, and validate milestones. These KPIs act as checkpoints on the way to your eventual destination: strong ROI.
For more guidance on modernizing your marketing measurement strategy, explore LinkedIn’s resource page, The Long and Short of ROI Why Measuring Quickly Poses Challenges for Digital Marketers, and check out its recent Live with Marketers episode on What Marketers Should be Measuring Now.
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