Marketing sourced pipeline is one of the most commonly reported performance metrics for B2B marketing. And although there is merit to sourced pipeline, attribution to that pipeline—when investigated more closely—can reveal some opportunities for more transparency. Additionally, it creates a one-sided narrative where a singular focus is placed on sourced pipeline thereby focusing too narrowly in an attempt to demonstrate real accountability can encourage the company and leadership to lose sight of how marketing is expected to create value.
B2B marketing organizations tend to define extremely high goals, and thereby attributions, to the sourced pipeline which can have some unintended consequences such as false positives in attribution where the numbers do not accurately reflect a marketing-only attribution model.
Forrester notes that “...companies marketing to a defined universe of potential buyers or those with a focus on strategic accounts, a well-established client base, or a focus on upsell revenues are examples of companies where marketing sourced pipeline numbers will be lower.” They highlight that sourced attribution can fall to figures between 5-20% of the total pipeline number. This indicates a few issues, outlined below, requiring us to and measurement should be different, too.
A few of the issues Forrester highlights are below:
- Marketing sourced pipeline is a common but incomplete way to demonstrate marketing’s contribution
- Measuring marketing’s influence is a reliable way to show that marketing is making a difference
- Influence measurement loses credibility when not linked to business value – but this is correctable
Define your Model(s) and Establish Alignment
Marketing is commonly expected to help sales close the pipeline faster, succeed in more deal cycles, and drive client relationships and revenue. But sales have a role in this, too. And some marketing leaders – cautious about asserting too much credit for metrics they don’t own singularly – retreat into sourcing metrics. That’s a mistake – it leaves marketing investment uncovered by metrics that can show marketing impact.
We need a model to measure and track marketing contribution to help us know what areas are efficient (budget ROI) and practical (pipeline generation) and what areas need tuning to ensure we can end the quarter meeting our commitments. We'll discuss Sourced and Influence Models and a Hybrid approach—each possesses its advantages and disadvantages, however, defining one and testing it will be the most effective way to find out what works for your organization.
The Sourced model is facile to both comprehend and subsequently calculate. However, a distinct disadvantage of this approach comes from the fact that it often causes tension between Sales and Marketing because the calculation is inherently zero-sum, whereby attribution can only be claimed by Sales or Marketing. In this case, Marketing is held to Sourcing a % of the New Pipeline needed each quarter.
Some organizations will tend to want to better reflect the symbiotic relationship of Marketing and Sales and use the Influence of pipelines and deals. This model acknowledges the interdependencies between teams that encourage a deal to close/won—often incurring additional touchpoints and nurturing beyond the initial sourcing of the lead. It requires required collaboration between both teams to work together with keenly timed handovers to move the deal through the funnel.
Marketing should implicitly touch all deals, whether it be passively by the contact consuming marketing materials like content, or the website or more actively where marketing is targeting the prospects for outbound marketing. This serves to measure our focus on those touches in the right areas.
Hybrid (Sourced and Influenced)
The final approach is to leverage the Hybrid model where marketing has both a Sourced Target and an Influence Target. The sourced portion represents marketing efforts to identify and engage new deals the sales team is not aware of, also known as whitespace. The Influenced portion represents the efforts to help a deal cross the line but were not discovered by marketing. It is implied that sourced Deals also get continued marketing to help it covert the pipeline to closed won.
The right percentage of pipeline to forecast is complex, depending on several factors including your TAM, your serviceable market, sales team size, and your overall budgetary requirements for the year, so teams need to be prudent when setting those goals. Furthermore, Influenced metrics tend to outperform with higher percentages on account of preplanned, ongoing marketing touchpoints with your prospects both within and outside the funnel. But this can also vary based on the size of TAM and the definition of Influences (# of responses needed and if there are multipliers). It's all about optimizing the marketing budget and not trying to boil the ocean. It's best to start with historical data as a guild as this takes into account the variables in the previous year.
The Right Way to Measure
Demonstrating the impact of marketing when performance is the result of cross-functional efforts requires three elements. Let's again, turn to Forrester for three key pieces of advice:
- Show the performance of shared impact metrics. Whether the goal is increased deal velocity, better renewal rates, or improved customer loyalty, you need to demonstrate that the impact metrics marketing invests in are improving.
- Provide proof of marketing participation. You need to prove that when marketing tactics are accepted by target audiences, impact metrics improve. If marketing isn’t involved, it will be uncomfortably difficult to assert any type of marketing influence over that performance improvement.
- Present evidence that performance metrics change as marketing participation changes. Evidence of marketing impact requires a comparison. Some deal cycles may have light levels of marketing interaction, some may have heavy levels, and some may have no marketing interaction at all. When you compare what improvements take place when marketing is present to what happens when marketing is not, you can develop reasonable proof that marketing is making a difference.
The good news is that even if your company isn’t incorporating influence into its measurement system, it’s not too late to start.