This will be a quick read. This has come up in a number of recent conversations with peers at other companies and there seemed to be some confusion... so I through I'd try to put together a short post to help others that might also feel confused.
What is pipeline attribution and why do we measure it? Starting with very generic descriptions and diving deeper as we discuss further. Pipeline attribution is grouping the pipeline and based on the activity that drove it's status to see what team Should get credit. Who gets credit, drives the ROI calculation of this much budget was given to this team and they drove this much pipeline. This helps the business figure out where it should put more budget for more growth in business.
There are a couple of issues with just measuring pipeline in the sales funnel. Marketing's value spans not just those interested in a solution but also those that don't realize they need a solution. Breaking down what marketing does into very basic components:
Build future business/interest
Discover new deals
Accelerate deals
A healthy business will have marketing activities in each of these stages trying to move some portion of the members to the next stage. The ratio of each item depends on the maturity, size of market captured, and the competitive landscape.
Marketing and sales are a relay team that needs to work together to be efficient and effective. Marketing spend much effort in the TAM, In-Market, and Engaged stages... driving future business and discovering new deal. And some time with accounts that are in Active sales motions to help accelerate deals. Sales typically spends time with Account that are Engaged to discover new deals and with those in the sales funnel to close deals.
When we look at these stages, each of these components can be measured by the amount of pipeline or Potential Deals that sit at each stage.
Note: the amount of pipeline may not show up in the sales funnel (where pipeline is usually measured) for some time for these earlier stages. In those cases, you might have to estimate an amount (ideally predictive deal sizes, but if you can't you could use a simpler approach of # of Account X Average Deal Size)
This is usually when the debate of Sourced vs Influenced comes in. Sourced is the "Easy" button. You set up some set of rules that decides this deal is Sourced by this one team... winner takes all... and often it can seem random as it is dependent on how people are added to the deal and it's timing (i.e. first person added to the deal and what was their initial interaction). If contact B we added to the Deal first vs Contact A then the Sourced credit would be different. But it is simple only one team gets credit for the pipeline associated with this deal. At the end of quarter or year, it is easy to tally up the deals and budget each team got and the ROI of that investment.
Ordering Macdonalds to feed your wedding guests would be very easy and simple... but does it accomplish what you set out to do? If you want to create an experience for your guests perhaps you'll want some other catering that's not just easy and simple. It takes effort to do important things. Similarly, if you want to understand what is happening with the budget invested into Marketing we need to take the hard route. We need to look at Marketing Influence cause of the inaccuracy of Sourced logic.
I know Marketing Influence gets a bad rap. It's often seen as fluffy and not valuable. Perhaps because of how others have used it in the past. I think we can agree that in B2B Enterprise Sales involve a group of buyers and that no single asset, presentation, or event, is likely to have caused them to want to buy from us and it's more likely a cumulative effect of a number of these over time. A customer conference where prospects are immersed in the value of your products and services for a couple of days may be the exception as it condenses many interactions into one event. Otherwise taking to account all in the Buying Group and their recent activities make much more sense.
To do influence right we have to again refer to what marketing does and how to measure it.
Marketing Focus | Measurement | Notes |
|---|---|---|
Build future interest | Potential Deals | Ideally use predictive deal sizes, otherwise estimate with # of Account X Average Deal Size |
Discover new deals | Pipeline Creation Influence | Creation Influence looks at recent activities before the Deal creation for all members of the buying group. |
Accelerate deals | Pipeline Acceleration Influence | Acceleration Influence looks at activities after Deal creation and before Close for all members of the buying group. |
Will this approach work for your business? Are there pitfalls or issues you've encountered? Discuss in the comments below.
