When you run an advertising campaign, you will end up measuring the results. But unlike B2C with nearly instant ROI after launching, the B2B sales cycle is much longer, so it's unrealistic to expect quick results when targeting B2B customers. To know the perfect time for measuring ROI in B2B business, we should go through the misleading that marketers meet when measuring ROI metrics.
Why is measuring ROI harder than it looks?
LinkedIn surveyed around 4.000 digital marketers worldwide and reported that most of them are struggling to measure the outcomes of their marketing efforts. Many of them are measuring this impact way more before a sales cycle has concluded, so they received unrealistic results. One of the key findings from this survey is that marketers are measuring KOI way too soon, regularly within 1 month after the campaign, whereas it takes 6 months to sell. Most marketers know how long the typical sales cycle length is, but this situation happens because they are under pressure from stakeholders and the broader business, to deliver results or their performance quickly and more other reasons. Let's go through 4 key marketer behaviors identifying from LinkedIn research about measuring KOI and conclude with best practices for you to consider:
1. Measuring too soon:
LinkedIn research found that digital marketers are trying to prove ROI in the short term than an average length of the sales cycle, which can last for 6 months or more, especially when your firm needs to go through brand-building marketing objectives from starting stage.
More than three-quarters (77%) of digital marketers say they measure returns in the first month. However, 52% also say the sales cycle takes more than three months.
Only 4% of digital marketers measure ROI over six months or longer, which is the duration we know to be more in line with the length of a typical B2B sales cycle.
We can notice that marketers are using KPIs and other success metrics to report as ROI, and this trend is irrespective of marketing purpose - whether the marketers concentrate on initial branding or customer acquisition.
2. Mixing metrics:
When digital marketers think about ROI measurement, they naturally gravitate towards readily available metrics such as traffic or clicks. These numbers are actually key performance indicators (KPIs), which should be used to optimized and hence aren't really measuring ROI. KPIs allow marketer access the short-term impact of a marketing campaign, whereas KOI show you the whole story of the value that campaign is driving. It would help if you kept in mind the purpose of ROI is used as a backward-looking informer for future budget allocation decisions.
3. Marketing under pressure:
We did mention the awareness of the sales cycle length of marketers and the purpose of ROI measurement, but why are digital marketers measuring KOI too quickly? Two reasons behind the curtain are that marketers suffer from intense pressure to prove ROI as their performance to secure additional marketing budget and earn recognition.
Collecting positive ROI enables marketers to have budget allocation discussions in the short term. But it will lead to negative impacts when budget allocation decisions are made based on short-term performance; marketers will spend more money on their marketing campaigns that show the initial lift without the longevity of impact.
"With 58% of digital marketers telling us that they need to prove ROI in order to justify spend and get approval for future budget ask, it is no surprise that there is a rush to measure ROI." - reported Trivedi.
The other reason is proofing their marketing efforts for recognition. The sense of unrecognized turns digital marketers have the need to quickly demonstrate their achievement rather than waiting until the end of the sales cycle for highlight performance. They better need to report long-term ROI while identifying the short-term timeframe to calculate and report KPIs for optimizations.
4. Missing out on self-promotion
Marketers play an essential role in the growth of a business, but they still struggle to communicate the value of the contribution. Sometimes, sales teams are skeptical about marketing efforts, especially in the healthcare industry, but it does not mean the marketing team lacks trying. The majority of digital marketers measure ROI, but only two-thirds describe themselves as very confident in their ROI metrics, so this is understandable why they are reluctant to share.
So, when can you effectively measure the ROI?
The LinkedIn survey considered KOI as a marathon of marketing metrics, and they recommend B2B business should calculate KOI over the sales cycle. Ultimately, when it comes to ROI, marketers must slow down and measure the return on their firm investment over a long period, which help marketers are more inclined to share ROI metrics within their organization for better investment.
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