Money

3 Metrics Every B2B Marketer Should Know

Razzled-but-not-dazzled“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind: it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science.”
– Sr. William Thomas, Lord Kelvin

The number one thing that has set me apart from other marketers throughout my career is my ability, and willingness, to do math.  It is not enough to make things look pretty or budget for events.  You must be able to express very clear and useful metrics that drive a business forward.  Here are 3 that I believe every marketer should know off the top of their head if ever asked.

ROI: Return on Investment

ROI

This is the basic of the basic.  You should be able to rattle off exactly what your ROI is for major initiatives and for your year overall.  Although we all know this is very basic, most marketers don’t actually bother to calculate it or share it.

If you have a negative ROI it could lead to negative consequences.  However, if you can get ahead of the question, report your negative ROI, and outline causes for this you will, most likely, be viewed as a professional in the eyes of your management.  Entry level marketers hide bad metrics.  Professionals address them head on.

Equity Value Creation

This equation literally tells the business how much more valuable you’ve made it.  Not how much money you’ve made it, but how much you’ve increased the company’s value.

This is a tough concept for many marketers.  We focus on the bottom line and how much deals are worth.  But how much is the company worth?  If you CEO decided to put the company on the market, how much more valuable have you made it?

This is a critical metric for marketers for two reasons:

  1. You’re communicating how your influenced deals affect the attractiveness of the company directly
  2. You’re communicating how your more fluffy work, like brand awareness and sales enablement, are contributing to the overall value of the company – if not the quarterly sales directly.

Equity Value Creation Formula

Let’s break this down:

  • Monthly Revenue – look at how much your influenced deals bill on a monthly basis.  If you’re measuring something like “brand awareness” look at your monthly revenue a year ago and compare it to now.  Calculate the difference.
  • Expense Ratio – What percentage of your revenue goes to cover expenses?  If you don’t know, a good estimate is 50-60%.  Expenses cover keeping the lights on, employees’ salaries, paying contractors, etc.
  • Multiplier – A multiplier tells a potential buyer of your company how much more than your annual profits they need to purchase you.  This one is tricky.  If your company is not publicaly traded, you likely don’t know what your multiplier is.

    Here are a few good rules of thumb I got from BusinessTown:

    • An extremely well-established and steady business with a rock-solid market position, whose continued earnings will not be dependent upon a strong management team:
      a multiple of 8 to 10.
    • An established business with a good market position, with some competitive pressures and some swings in earnings, requiring continual management attention:
      a multiple of 5 to 7.
    • An established business with no significant competitive advantages, stiff competition, few hard assets, and heavy dependency upon management’s skills for success:
      a multiple of 2 to 4.
    • A small, personal service business where the new owner will be the only, or one of the only, professional service providers:
a multiple of 1.

Essentially this equation takes your Annual Profits x your company’s multiplier and generates the value of the company if someone wanted to buy it.  You can use this to communicate how much more valuable your company is now that marketing is doing x, y or z.

NPV: Net Present Value

“A bird in hand is worth two in the bush.”

A dollar today is worth more than a dollar you make a year from now.  Marketers often report metrics based on the total value of a deal, which makes sense.  But to take your marketing game to the next level, start reporting on NPV instead.  Net Present Value is how much the deal is worth today.  For B2B marketers we often deal with more expensive, longer term solutions.   It could be years before our company realizes the actual full revenue from a sale.  By calculating your ROIs with NPV instead of total deal you’re indicating to your leadership that you understand the deal loses value the longer it lasts.  It shows you’re a professional.

Here is the actual equation:

Image result for npv formula

But only college students do it that way.  If your CRM doesn’t already calculate NPV for you, here’s a website that will do it for you.  There is an equation to calculate your discount rate, but here’s a cheat I found online for all our sanity:

  • 10% for public companies
  • 15% for private companies that are scaling predictably (say above $10m in ARR, and growing greater than 40% year on year)
  • 20% for private companies that have not yet reached scale and predictable growth

That being said, most CRMs can do it for you.  Just customize your opportunity page to include the field.

Tradeshow 101: The Most Important Thing to Buy for Your Booth

Image result for exhibit hall picture

“Dear Hannah,

I am a marketing manager with a non-existing budget.  This year my company wants us to have a booth at a major industry tradeshow.  We have a tabletop, backdrop and podium.  It’s enough to fill up a 10×20.  With limited funds I’m not really sure where to put the bulk of it?  Should I invest in giveaways or a better booth or something else?  If giveaways, what are your favorites?

Sincerely,
Tabitha”

Tabitha,
Tradeshows happen to be one of my favorite topics.  In fact, in response to your email I’m going to write a series on my top tradeshow tips.

I know all too well how expensive tradeshows are and how unrealistic marketing budgets can be.

Here is hands down, the #1 most important thing you should buy for your booth:

Carpet Padding.

Image result for carpet padding tradeshow

It is the most under utilized, under valued and most important thing a marketer can spend money on for their booth.  More than giveaways, more than the booth itself, more than collateral… carpet padding is king.  And best of all, it’s cheap.

Carpet Padding can accomplish 4 critical things:

  1. Entice people to come to your booth
  2. Entice people to stay at your booth
  3. Keep your team’s energy up
  4. Make you look like an event marketing genius

1. Entice People to Come to Your Booth

Let me paint a picture for you.

Image result for professional woman outfit plusKelly works in an office and rarely gets to do something fun as part of her job.  Maybe she travels to other offices, but it’s rarely a good time.  For the most part she works at her desk, rarely has time to eat or exercise properly, and hardly ever gets to rub elbows with her company’s executives.

Her company decides that she will join several others at a conference in Las Vegas – now they’re talking!  She will be joining her VP and a few directors.  She decides to pack her cutest, professional outfits – which include heels.  Kelly doesn’t think about the fact that she’ll have to walk a mile from her hotel room to the convention hall.  She doesn’t realize the convention call is all concrete slightly covered by carpeting.  It never occurs to her that 3,000 exhibitors means spending an entire day on her feet in the exhibitor hall.  After 2 hours, her feet and back are killing her – and she has another 3 days of this.

Then Kelly walks past your booth and you complement her on her amazing heels and state Image result for feet are killing you“… but your feet must be killing you!  Come enjoy some carpet padding.”  She will shake your outstretched hand and come join you on the carpet, just to be polite.
Then Kelly’s eyes light up.  OMG!  Double carpet padding is instant relief.  Triple carpet padding feels like a cloud.

It sounds crazy, but it works 4 out of 5 times.  This is true of men and women alike.  Men’s shoes can be just as terrible, especially when you’re carrying a few extra pounds and are not used to this much walking.

2. Entice People to Stay at Your Booth

When they feel that relief, they are instantly in a better mood and are happy to listen to your elevator pitch.  If you opt for the triple padding, some people may actually take their shoes completely off.

They will tell you their life story for 3 minutes of relief from their feet and back.  Then you can better qualify them at the booth and hand them over to a nearby sales rep who can more expertly answer their question.

If people are running away from your booth, chances are you haven’t given them a good reason to stay.

3. Keep Your Team’s Energy Up

Image result for ready okayNo one should be sitting at the booth.  It is a hard rule at my events.  No one sits.

It is exhausting smiling, standing and being completely “on” for 8 hours 3 days in a row.  I get it.  If you expect your team to be “on” and on their feet, pay for the extra carpet padding.  Chances are they didn’t pack the right shoes either.  They will thank you.

4. Make You Look Like an Event Marketing Genius

geniusMarketing gets a bad rap for spending too much money (see a previous post on the topic), but you can reverse that when you demonstrate how much traffic you’re bringing in without having the nicest booth and coolest gadgets.  Point out to your team how other booths are not doing the same thing.  They have the coolest booth in the world and people are picking up their goody and leaving.  No valuable conversations at all.

When you’re team observes this, you can point out that you spent 1/3 of what the others did and we’ll probably get double the traffic.

You’ll look like a genius.  You’re welcome.

If anyone has any marketing questions feel free to email me at hlhoward71@hotmail.com.  I’m all ears and you may get a shout out on the blog.

 

All marketers do is spend money… and other stupid crap people say.

Image result for eye roll memeI have no idea why marketing gets such a bad rap.  I’m sick and tired of it personally.  I can only guess that people are jealous because marketers have an awesome job where we get to throw parties and design cool stuff and don’t have to talk to customers every day.  I would probably hate me too.

But here’s the thing: No one’s job is a walk in the park.  Here are a few of my favorite stupid things I hear from non-marketers about marketing.

All Marketers Do Is Spend Money

I’ll admit, marketing can be expensive.  Especially at organizations that struggle to pay their employees regularly.  But here’s the thing.  Good marketers pays for themselves.  Marketers actually hate spending money, because we know we have to prove an ROI for every dollar we cost the company.  I have never met a B2B marketer who’s like “I have this massive budget.  I can’t wait to burn it on display ads and liquor!”  It just doesn’t happen.

Image result for marketing dilbert

If you have a marketer on your team that you feel “only spends money”, most likely they have fallen victim to a few shortfalls:

  • They didn’t state the projected return before spending the money.  Doing this results in two outcomes – (1) Stated goals keep them honest and (2) Helps them get everyone on board with the expense beforehand – which avoids uncomfortable discussions later.
  • You are making them buy crap for no reason.  (Yes, this is a real thing)  Don’t get mad at marketing for low ROI when you insist on buying thousands of pens to put at your $60,000 tradeshow booth that costs $20,000 just to ship.  No wonder your event marketing isn’t working.  You are setting it up for failure.
  • They’re not tracking or reporting their return in KPIs that mean anything to you.  Marketers speak marketing.  “KPI” stands for “Key Performance Indicators” and if you didn’t know that chances are you don’t speak marketing.  If marketing insists their campaigns are working and you’re not seeing evidence of that, most likely you have a failure to communicate.  Explain to marketing exactly how you define success and ask them to explain to you how they define success.  Without an agreed upon set of KPIs, you’re likely going to have a tough time understanding their value.

Those who can’t do, teach.  Those who can’t sell, market.

Image result for marketing liquor and guessing

I understand how this misconception would come to be.  I tried direct sales.  I did not enjoy it one bit.  I’m not talking about the cooshy stuff most B2B account reps do.  I mean I literally walked around Home Depot for 10 hours a day, 6 days a week trying to get people to sign up for in-home kitchen cabinet refacing consultations.  I was paid $25 a lead.  They called it “direct marketing” – I called it bullsh*t.

But that doesn’t mean I can’t sell.  I have been told by many sales directors over the years that I have the personality and ear for it (whatever that means).

However, I don’t like being called 400 times a day to see if I’ve moved the pipeline $2 further than yesterday.  I also don’t like to be in constant competition with the people on my same team. The stress of doing sales day in and day out is miserable.  But somehow the puzzle of click-through-rates is exhilarating.  It’s not that I can’t do your job – I just don’t want to.

Marketers are the drunk frat boys of the business world

Image result for marketing dilbert

Screw you.  We all know that’s sales.

Marketing isn’t a real business discipline

 - Dilbert by Scott Adams

Marketers have a bad rap for being stupid.  People claim we don’t know anything about how business is done and, I’ll admit, I’ve perpetuated that stereotype from time to time to get out of boring meetings.

But the fact is that statement doesn’t make any sense.

I graduated from one of the most prestigious marketing programs in the world, Penn State.  (WE ARE!)  At the time our marketing program was ranked 16th in the world – THE WORLD!  But they wouldn’t let me graduate with a business degree without also studying managerial accounting, finance, statistics, calculus and a host of other classes every business student studies.  I just took a few more marketing classes than you and a few less [insert discipline] classes.  That doesn’t mean I don’t understand business and you sound like a moron by saying that.

In conclusion, haters gonna hate.  Marketers are going to continue to be professionally awesome.  Also, I love Dilbert and you should buy all of their products.  (No they did not pay me to say that.)

 - Dilbert by Scott Adams