Marketing Performance Glossary: Returns

February 24, 2015 Katherine Berry

 

Marketing Performance Glossary: ReturnsWhen it comes to marketing performance management, marketers need to speak the same language. This common language serves as the foundation of our Path to Performance.

To help your team communicate more effectively, I’m sharing basic definitions in a Marketing Performance glossary. Previously, we defined marketing investments.

Once you understand how, where and why you’re investing, you can move on to the truly transformational part of marketing performance management — understanding returns and using your new knowledge to maximize future investments. This is the “R” in ROI.

4 Key Marketing Returns Terms

To understand marketing returns, you need to know four key terms:

  • Returns Target

How will you measure the success of your marketing organization?

Returns targets usually have a different hierarchy than investment targets. For example, while investment targets could be allocated by objective as well as by multiple cascading dimensions (like region, team, then cost center), returns targets could be set by objective, then by other dimensions.

We recommend setting targets for how much marketing-contributed or marketing-influenced pipeline or revenue you’ll bring in. You can also set targets for other funnel metrics such as marketing-qualified leads. But, we’re seeing more and more focus on pure revenue-driven targets (as we believe should be the focus!).

Marketing leaders can set these targets, but they need to be able to empower their teams to be able to understand their revenue impact as it relates to the activities they’re planning to do.

  • Returns Plan

Once you know your target, what steps will you take to get there?

The returns plan includes bottom-up numbers designed to meet your target. All marketers across the organization share what they expect to get in terms of output (for example, marketing-engaged leads) for each activity or campaign. Then, you can automatically translate those numbers into impact in terms of estimated revenue. You can calculate the impact using funnel metrics such as stages, velocities and average deal size.

  • Returns Actuals

How much actual return (for example, revenue or leads) did you get today?

Once you start executing your plan, you’ll be able to look at actual returns. You may view actuals from a variety of systems, from top-of-the-funnel metrics in social and automation systems to bottom-of-the-funnel metrics in your CRM.

You can map actuals from a bottom-up, granular campaign level. Or, you can map actuals from a top-down aggregated level to show a high-level, summarized view of performance.

  • Returns Forecast

Are we on track to hit our targets tomorrow?

The returns forecast is dynamically generated, using the future plan plus the past actuals to predict returns down the line. This view is a leading indicator that can allow marketing organizations to course-correct early and often to ensure they hit their targets. The returns forecast completes the returns picture.

Stay tuned for more Marketing Performance Management glossary entries, where I’ll define important ROI terminology. All these terms and more are also covered in our Path to Performance eBook.

 

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