Leads and Marketing Qualified Leads (MQLs) alone are no longer the key performance indicator of marketing team performance. With the increasing importance of digital marketing channels and the availability of sophisticated analytics tools, marketing teams are now expected to contribute to the entire sales process, with the ultimate goal of driving revenue for the company. Furthermore, marketing teams are increasingly being held accountable for the return on investment (ROI) of their efforts, which means they must demonstrate how their marketing activities are contributing to the company's bottom line. This includes tracking and reporting on metrics such as the cost per lead, cost per acquisition, and customer lifetime value.
Given the importance of pipeline generation, the 2023 State of Pipeline Generation survey, conducted in partnership with Ascend2, sought to explore the current practices and challenges faced by marketing teams in this area. The survey gathered insights from over 400 marketing professionals, with a focus on topics such as how they forecast pipeline, what challenges they experience around pipeline prediction and insights into practitioner vs executive confidence levels.
What did we learn?
Return on investment is the most common success metric.
In today's tightening economy, businesses are under increasing pressure to make every dollar count. This means that boards, investors, and C-suite executives are looking for ways to improve the efficiency and effectiveness of every aspect of their operations, including marketing. 48% of respondents shared that return on investment or customer acquisition cost was their primary metric to measure success. In addition, 47% of respondents identified revenue contribution as their primary metric for measuring success. This metric is particularly significant as it directly ties marketing activities to the bottom line of the business, highlighting the critical role that marketing plays in driving revenue growth.
Interestingly, the survey found that the traditional metric of MQLs was only used as the primary metric for success by 19% of marketing teams. This suggests a shift away from the traditional focus on lead generation and a growing recognition that lead quality, conversion rates, and revenue impact are more relevant metrics for measuring marketing success.
Efficient resource allocation and confidence are the greatest benefits of pipeline forecasting.
The ability to accurately predict pipelines is critical for the success of marketing programs, as it allows marketing teams to allocate resources effectively and confidently pursue revenue targets. In fact, the 2023 State of Pipeline Generation survey found that 95% of marketers feel that having the ability to predict pipelines is key to the overall success of their marketing programs.
The survey also found that the two most common benefits of successful pipeline forecasting are tied to resource allocation and confidence in hitting revenue targets. Effective resource allocation is critical in today's business environment, where marketing teams are being asked to contribute more revenue with fewer resources, often in terms of people and budget. Predicting pipeline accurately helps marketing teams to allocate resources more efficiently and ensure that they are targeting the right opportunities to achieve revenue targets.
Confidence in hitting revenue targets is also crucial, as it helps to motivate marketing teams and ensure that they are aligned with the broader goals of the business. By accurately predicting pipeline, marketing teams can set realistic targets and have a clear roadmap for achieving those targets. This can boost morale and help to focus efforts on the most impactful activities.
Interestingly, the survey found that the majority of marketers who are able to predict their pipeline have over 3 people supporting pipeline predictions and forecasting. This is likely due to the fact that most pipeline forecasts involve manual processes, rather than fully automated insights. As a result, marketing teams require significant resources to collect and analyze the data needed to make accurate predictions about future pipeline.
Executives are more positive about 2023 success than non-executives
The 2023 State of Pipeline Generation survey found that 65% of executives surveyed feel more positive about their chances of having a successful year in 2023, while only 35% of non-executives feel this way. There are several potential factors that could be driving this discrepancy.
One possible explanation is related to the fact that just over half of those surveyed have experienced layoffs in the past two years. It's possible that executives, who are typically more removed from day-to-day operations, are more optimistic about the future of their organizations due to factors such as cost-cutting measures and increased efficiency. In contrast, non-executives may be more attuned to the challenges and uncertainties of the current business environment, leading to a more cautious outlook.
Another potential explanation is related to the number of marketers who feel like they spend too much time in "fire drill mode" due to questions around pipeline and revenue projections from executive leadership. The survey found that over 40% of marketers feel that they spend too much time on pipeline forecasting, which can lead to stress and burnout. This may be contributing to a more negative outlook among non-executives, who may be enduring the effects of this pressure more acutely.
Overall, the reasons behind the discrepancy in outlook between executives and non-executives are likely complex and multifaceted. However, it's clear that marketing teams have a critical role to play in contributing to the success of their organizations in 2023 and beyond. By focusing on pipeline generation, accurately forecasting revenue, and demonstrating a clear return on investment for marketing spend, marketing teams can help to build confidence and drive growth across the business.
The survey revealed that marketers are increasingly focused on pipeline generation with a return on investment costs, with a growing lack of confidence in their likelihood to succeed. However, many marketers still face significant challenges in pipeline forecasting, due to manual processes and the lack of data in this area.
Want to join us for a webinar discussing The State of Pipeline Generation with Ascend2? Register here.