What Matters Gets Measured — And What Gets Measured Gets Modeled

In today’s dynamic market conditions, it’s all too common for boards and executive teams to set ambitious revenue targets, while marketing budgets stay the same — especially in SaaS. That means marketers are often expected to do more with less.?

And the one thing that’s true about any marketing plan is that, at some point, it’s going to change. What matters is how you’re able to adjust to get back on track.

So, how can marketers do more with less AND be prepared to adjust plans that are already underway? How can they partner with the right people across the organization to identify opportunities and plan the right path to targets? How can they find the right tech that is connected to the entire business and establish data-driven processes to enable repeatability?

The answer is the best practice approach of Agile Revenue Planning (ARP).?

REVENUE PLANNING 101

Successful marketers need to align their priorities and plays with business goals. To do that well, they need to orchestrate different departments and plans moving in lockstep, each executing on priorities that ultimately contribute to achieving overarching organizational objectives.

If one of those goals is to drive bookings, marketing should be measured on creating and capturing demand that builds quality pipeline and ultimately converts to revenue. That’s why building out a plan —?and a budget — aligned with revenue targets and results is such an important part of the marketing mix.?

But marketers have other goals too. They know the importance of a full-funnel approach that starts with building awareness and engagement with the right audience, with the right message, at the right time.?

While views, clicks, downloads, sign ups, and even leads are healthy engagement and conversion metrics to measure, they are only early indicators of potential revenue. You need to know how and where to hedge your bets to get to your targets when objectives change or budgets tighten.

Not all leads convert equally. If you want to drive performance, especially when you’re expected to do more with less, you have to model your program costs against the impact you expect based on past performance so you know where to focus your resources—?and how you can make that more efficient as you scale. To truly increase your LTV:CAC and NRR, while decreasing your CAC Payback, you need to work backwards and reduce the cost of generating revenue and opportunities.?

Your people cost has to be part of your revenue planning approach as well. Finding the right ratio between people costs and marketing program costs is an ongoing balancing act, but it’s necessary. Your marketing spend isn’t separate from your people.

IT’S ALL ABOUT WHAT WE MEASURE

When marketing leaders make investments, they often end up overemphasizing immediate goals. But that’s not ideal — too much focus on leads = not enough focus on revenue.?

We’ve all heard the phrase, “What matters gets measured.” But marketers don’t need to measure everything. Ultimately, they just need to measure the return on their investments and how they scale over time.?

Doing so requires understanding the targets they need to set, what operational levers are at their disposal, and how they can accurately measure performance against those targets.?

Technology can help. The right tools can enable marketers to be data driven, giving them the visibility needed to understand performance,drive effective collaboration with all relevant stakeholders and make more informed decisions about where they should focus spend.

But the piece that most marketers miss is including the costs that can’t be directly measured in the right bucket and correlated with growth KPIs. And that’s where ARP can make a world of difference.

WHEN YOU MEASURE WRONG, YOU MODEL WRONG

When planning budgets, you end up modeling what you measure. If you’re not measuring the leading indicators of revenue (like MQL, SAL, SQO) — as well as building in assumptions for the things you can’t measure (using CAC over time and micro CAC by audience and campaign in the short-term to correlate their impact on pipeline, revenue, velocity and the cost of driving that impact) — you won’t get the budget to fund what drives impact now and for the future. Your friends in finance won’t be able to model the impact you’re having.?

So, if you’re having a hard time funding the right things, you need to partner with RevOps (to make sure you’re measuring what matters) and Finance (to understand where you should be accelerating or decelerating investment). You can use this information to understand the implications of operating with your existing assumptions. And you can build a model backwards through your pipeline to model revenue and get predictive.

The relationships with Finance and Revenue Ops are the most important ones a CMO can have.

AGILE REVENUE PLANNING IS DIFFERENT

So, what exactly is ARP?

ARP empowers marketers to explain how their budget is currently performing so they can defend why an increased budget might be needed, before targets are set.?

ARP combines people, process and technology to enable you to quickly produce a GTM plan that accelerates growth, highlights areas to focus on, and can be adjusted to respond to challenges or opportunities.

In other words, agile revenue gives you the ability to reconcile and reforecast quarterly, decelerate or accelerate investment, and update plans. That enables you to adjust and recalibrate to changing dynamics, shifting your spend to hit and adjust within the fiscal, vs a year too late.?

It’s an agile operating rhythm that connects marketing, sales, channels, and finance — partnered together to grow the business and mitigate risk against shared objectives.?

This process of continuous improvement is ultimately how you can get to where you need to go.?

But marketers can’t do this alone. They need to get stakeholder support early so that the plan is understood and supported by the full organization. That includes the executive GTM leadership team. Alignment is a critical first step and key for establishing your north star — shared objectives to work towards and assurance that you’re measuring what matters. With alignment comes an understanding of the outputs of the ARP model. That builds trust and helps marketers have a far greater impact on business outcomes.

Once you get alignment on goals, you need to understand how you’re going to model, track and account for them — and how you’ll use data and insights to reforecast and adjust your plans to meet the short and long term goals of the business.?

Trust with leadership + correlating investments and return, with aligned KPIs + measuring and reforecasting investments at key moments throughout your fiscal = lower customer acquisition costs, increased revenue and improved velocity.

Talk about modeling what really matters…

The best part about ARP is that you don’t need fancy tools to try it out. An Excel spreadsheet with first or last touch conversion and closed revenue is a great place to start.

Without connecting your finance and operational data, teams, and goals, you are not going to be able to drive the insights and impacts you need to plan to grow.?

This operational rhythm and alignment is the difference between getting more budget or being under invested in your people and your programs. It’s the model for what makes you a revenue marketer vs a lead generator or arts and crafts department.?

If you have any thoughts, questions, or feedback, I would love to hear from you in the comments.

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