Arguably, we marketers are not known for our strict adherence to process standardization.  Sure, there are a handful of us fighting for change but a quick survey of our non-marketing colleagues will generally reveal us to be perceived as a collection of wild, fly-by-the-seat-of-our-pants professionals.  [Insert any story from an IT professional on trying to get a marketer to understand and follow a change control process].

This perceived-reality can certainly be applied to our marketing reporting and analytics...especially in calculating return on marketing investment (ROMI).

Now...granted we’re really trying here...we’re maturing beyond ‘impressions’ and ‘unaided recall’ into more tangible reporting.  However, in the highly complex environment of relational sales cycles it is easy to get lost in the ever-shifting relationships between leads, accounts, and sales engagements.  We need some structured guidance in our demand generation reporting and return on marketing investment analysis.

Who can help?  Our colleagues in Finance.  

Yes, that’s right Finance, the people that keep trying to teach us the difference between accrual and cash-basis accounting and why invoices ‘found’ after the close of a month are stressful.

How? (If you’re still with me.)  I’ve taken two fundamental financial accounting documents and converted them into powerful demand management tools.

Those Tools are:

1. Lead Balance Sheet
2. Statement of Lead Flows

 

The Lead Balance Sheet

What It Measures
This financial-marketing tool measures the progress of specific leads - generated within a time period - through a demand management process.

What It Solves
Using this tool clears up the ambiguity we typically observe within our data and reports when looking at aggregate masses of leads and their status.  Most importantly, this tool demands that we account for and reconcile our demand generation and demand management processes.

Very simply...what leads came in over a time period and what happen to those leads.

How You Use It
It the spirit of balancing assets against liabilities/equity, this tool is used on a periodic basis to: 

1. Account for the specific outcomes of leads generated.
2. Evaluate the efficiency and strength of a demand management process (i.e. reasons for not balancing, percent of conversions, velocity, etc.)

Statement of Lead Flows

What It Measures
This financial-marketing tool measures the total impact to a prospect base over a given time period through marketing and sales activities (gains and losses).

What It Solves
Managing a prospect base - especially in relational sales - requires careful measurement and analysis of multiple activities (both sales and marketing) over multiple time periods (weeks, months, and quarters).  

This tool consolidates those activities into a manageable set of key measurements to provide an accurate picture of how a prospect base has been affected by operational activities within a given time period.

How You Use It
Operationally, this tool highlights the performance of key sales and marketing activities; especially when measured against forecasted/expected results.  Strategically, the results of this analysis provides important measurements for future forecasts and budgeting.

While this analysis can be performed by itself, it can be powerfully combined with the Lead Balance Sheet to understand operational affect of demand generation efforts toward an organization’s future, marketable prospect base.

 

I know, in a world of ‘big data’, complex attribution, and predictive analytic
s these solutions seem overly simple.  Even I was a little hesitant.  Could financial statement really be applied to dynamic sales/marketing environments?  Surprisingly, I have found these tools to be wildly valuable in bringing once hidden realities to the surface.  Something even complex regressive analytics processes had been missing.

Depending on your data sources and processes you will find that these tools bring valuable information to your analysis and forecasting efforts.

As a note, my examples are illustrative and would likely need some modifications based on the particulars of an organization and its demand generation/management processes.

From GAAP to GARP?

So my fellow marketers...Give Finance a Chance (I’m thinking bumper stickers or T-shirts for that one).  And maybe someday we’ll all unify our marketing measurements under a set of GARP (Generally Accepted Reporting Practices)...or maybe not.  For now, give these tools a try and see what new demand/pipeline visibility you can achieve and new dimensions you can bring to return on marketing investment.