In this episode, we talked with Pete Furseth about attribution modeling and best practices for use. Some of the things we talk about:
There is gold throughout this episode, so make sure you listen to the end.
Recorded live October 27, 2021.
Referenced in the show:
MO Pros Technical Workshop: Validation of Your Revenue Tech Center of Excellence
Hi, I’m Michael Hartmann, I’m Naomi Lou, and I’m Mike Rizzo. And this is ops cast, a podcast for marketing ops pros and rev ops pros created by the MO Pros. The number one community for marketing operations. As professionals tune into each episode as we chat with real professionals to help elevate you in your marketing operations career.
Hello, everyone. Welcome to another episode of OpsCast brought to you by the MO Pros. I am Michael Hartmann joined today by my co-host Mike Rizzo. Mike say hello? Hey everybody. Glad to be here again. Sorry. I missed you last time. Yeah. There’s always next time now. All right, today we are talking about attribution modeling again, but in a different way.
Joining us today for this discussion is Pete for Seth, uh, VP of sales and marketing at ORM technologies. Pete has been in this role for a number of years after leading product development, as the VP of engineering and advanced analytics with ORM. Prior to that, Pete taught economics and operations research at the United States air force academy and served eight years in the us air force base.
Thanks for joining us today and thank you for your service. Michael and Mike, thanks for having me. I appreciate the kind words on the service. And as a quick reminder, veteran’s day is right around the corner. So for all your listeners out there, hopefully they can find ways to give back to the veteran community.
And I think there’s a lot of great charitable organizations out there. And in addition, I think one of the things that’s really unique to the marketing operations group is I think veterans in general, That would be a good fit for marketing operations. They know how to get stuff done and team-oriented attention to details high.
So if there’s veterans out there looking for opportunity, I encourage you to reach out to them and get them into the marketing operations community. Gosh, what a great call out. And, you know, truthfully the amount of roles that are open in the world right now for marketing and rev ops is insane. So if you are a veteran and you feel like you got the chops and attention to detail, and you want to learn something new, uh, now’s the time, like it’s a great space.
And I appreciate you saying that P cause, uh, you would know. And so it’s good to get that. Yeah. So I mentioned that we’re going to be talking about a little bit of a different part of attribution and it really is. Yeah, we talked a number of times on the episode on, on the, on our different episodes about attribution modeling and different ways to do it, different approaches, tools, et cetera.
Well, what I think we have not talked about, which I’m glad Pete peach wants to talk about is, okay. So now that you have, if you have attribution modeling and it’s like, now, what, right. What are you going to do with that? You, how are you going to use it? So, and the other part, I’ll say part of why Pete and I have connected is also because I also have a degree.
And operates well, it’s actually my degree to say operations research, but truth be told that’s really what it was, but at least I’m going to tell him that, um, if you don’t know what that is, you know, you engineering geeks will get it. Absolutely. We share a common bond and, uh, optimization of, and mathematics is great.
That’s right. Absolutely. I feel like the outcast right now. I’m just going, I’m just gonna, I’m just gonna put it out there. Like I have no idea what you’re talking about. You’re in the club you’re here, so you’re in the, just kidding. That’s right. It’s a safe space. All right. So P you know, I’ve talked several times about attribution modeling and, you know, some of the pitfalls or challenges, you know, from your perspective, but what have you seen in terms of how attribution modeling has been used?
Um, it, you know, what has worked and what does not work so well from what you’ve seen, that’s a great question. I think there’s a ton of pitfalls that come with attribution modeling and we’ve all seen them. Typically they revolve around two topics, either data and process or a bad fitting model. And so we’re talking about data and process.
We all have seen the case where an SDR forgot to convert a lead to an opportunity. With the content or contact with an opportunity and all of a sudden that MQL to Sal, to SQL that chain is broken. And now one, those, those situations happen all the time. Bad data hygiene is, are the things that cause attribution models fits.
Can I think the other big pitfalls I said comes from. The wrong fitting model for the wrong application. So an example of that is we have a single touch model, it’s first touch model, and all of a sudden it’s telling us we should invest all of our money in Google ad words or content syndication or something.
That’s very top of funnel focused, and doesn’t really allow us to measure the full funnel, the middle of the funnel activities that bottom of the funnel activities, the field marketing events that are happening during the opportunity life cycle. And if we’re fitting the wrong model for the wrong application, that’s another really big pitfall that we run into and we see Austin.
So I always tell people to write part of the challenge with attribution modeling is, is really about, about data quality and being really disciplined about how you go to market. And it’s really hard. I mean, you brought up the example of not converting a lead to a contact. I’ve seen it worse, right? Don’t even mess with the lead, create a new contact.
So you, you know, um, it’s or you don’t do that. You just go create an opportunity. So, um, Yeah. What do you, have you seen anything out there that like how you would approach? So if, if you’re, if, if we were, our listeners are in a situation where they know that, Hey, we’ve got attribution modeling and part of the problem is that upstream processes with how we go to market or how the sales team is doing things that handoff.
Um, w how would you advise them to try to approach those? Like w w is there a starting point which is more important, just curious from what your experience with different clients? Yeah. I think there’s a data governance play here. Right? We have to, you know, certainly as our organizations mature and our marketing operations mature, our data governance needs to mature with it.
And so that should define. How people are captured, how people are converted, who has access to the data who can change the data. Is there all things that I think are really important and certainly again, as we mature as organizations and as, as marketing teams and revenue operations teams, this is something we need to pay attention to.
And I think the other thing that happens is the more you can automate the better, whenever you put a person in the equation, things. And then you have to create some automation on the backend to accommodate that breakage.
Yeah. I, uh, I totally agree with that. Right. I, I know humans need to be involved. That you know, at some of the steps, right. Um, sometimes it’s just at the handoff from marketing to sales and just making sure that there is, um, an acceptance of that lead. If you use that quality, that right. The sales accepted lead, or what have you.
But, um, I think what. Interesting for me in terms of how humans are involved in, in the, in the components of setting up all this automation. Um, and it says like a super timely topic. Like we just today had a presentation from, uh, Joe Jomar around the continuous validation of your revenue technology center and like how to kind of manage that.
Um, and he’s provided a bunch of templates in the show notes. We’ll we’ll link to it. Um, so people can go check it out. Um, and it’s exactly this topic, right? How do you manage data governance and like what processes do you put in place? And one of the questions that he ended up answering towards the end was like, who actually at the end of the day is the stakeholder that owns that whole kind of, you know, is, is the owner of all of those.
Steps like whose, who has the final stamp of approval or is the gatekeeper to making changes or updating all of that documentation or whatever it is that you’re creating. And so for me, that’s getting back into this idea of what, where humans are involved in establishing all of these. Data quality process management and all of that stuff, Pete, in your experience, like who owns that and who’s involved in setting all that stuff up, like, is it just sort of one vertical deep department or is it like across the org?
Like lots of questions coming at you? So, no, that’s great. I think, well, I mean, I think we’ve all seen the statistics, you know, that have come out recently talking about the technologies kind of marketing versus. And how marketing has outpaced it. And marketing’s pen is continuing to grow and the technologies pace.
And so I think there’s some ownership that, that goes to marketing. You know, certainly sales has ownership and oftentimes it’s who funds it. So, you know, we’re using Salesforce and Marketo or Eloqua on dynamics, and we’re trying to figure out who owns what and who funds what? And I think we all kind of.
Stay away from it as much as we possibly again, because it tends to be a roadblock often to our productivity. Certainly as we’re getting going, and we’re implementing new things and we’re growing our organization, but I had a really unique conversation with a prospective customer recently, and they had hired a new director of it, or it really was a chief information officer and he had a really unique perspective on.
Really how to enable technology in the organization. And it was more to do with making sure that there wasn’t duplicated duplicated effort and making sure there was a common data governance. And I think I would hate to say, let’s go back to the CIO or the CTO and put it all back in the it department because we’ve got.
So far away from that. And we’ve tried to go away from that, but as organizations mature again, and you go from a hundred person organization, a 200 person organization of 400 to a thousand to 10,000, certainly there’s growing pains that go with that and putting a central body in place that doesn’t get in the way of business.
But instead enables business. I can’t believe I’m saying this, but I think it’s a good idea to really own the data governance and understand who owns what. I think, I mean, I think that it makes a lot of sense, especially to your point as organizations continue to scale, um, and having the governing body of stakeholders signing off, or at least coming together, I, you know, it feels like that’s what rev ops is sort of trying to become, right?
We’re we’re categorically calling this like umbrella group of rev ops, like this, this, like, how do we all get in alignment around data and how things actually work, but. What you’re saying is actually even, even more broad than that, in terms of like, you know, this, this technology leader, someone who’s really thinking about data governments and making sure that there’s no kind of duplicative set of tools in place that that even gets beyond.
You know, this, this rev ops kind of function, it starts getting into business level, like C suite level. Yeah. I think it’s also particularly important as we are moving into this product led growth era companies like slack and zoom and sneak where you have all these organizations where there’s product data available.
And as a marketer and as a salesperson, we want access to that. And we want to understand. If somebody has the ability for an in-app purchase, or if they’re using certain feature sets or there’s certain features sets they haven’t adopted yet, how do we get those features in front of them? And so, as we have certainly this, this PLG era, I think that’s coming, having the ability to cross domains and get information to make sales and marketing more effective is more and more important.
Yeah. I don’t know that it’s even just product like growth. I mean, I, you know, I think other other companies I’ve seen where, um, financial data being tied back to customer data and using that, or if you’re doing software that’s, you know what, you’ve got software data that is available. You’ve still got, you know, what have they purchased?
What have they not purchased? Right. So if you can get disciplined about that, you can start to get more insights. Um, Yeah, I think it’s really interesting. I, I, you know, I love the idea that you talk about, you know, trying to automate what you can. I really struggle with this because I also am a believer in keeping the technology stuff as simple as possible and trying to build the way the technology and automation works around like the normal things that they have to do.
So if part of what they have to do to create an opportunity is. You know, convert a lead to a contact or an account, but how can we make that be all a seamless process where it also is updating a status or doing other steps behind the scenes. So that, especially for the sales team, right? I want them focused on selling.
And so how do we, how do we keep that? Yeah, try to make it as simple for them to do that, but also make sure that we get the sort of building in the discipline and the data to the way we can. So, um, I’ve yet to see an organization that doesn’t, you know, a hundred percent of the time, every time, right. We always found out that that is one of the biggest sticking points that lead conversion, a spot, it breaks off.
It’s the most common. Well, as you say, like, may, this is all leading to, at some point, we probably need to have a discussion about how and when can we get rid of the lead object? Right. Well, there’s a lot of people that actually, I know I was buying my, yeah, I was biting my tongue and not saying anything.
And you, you sent it out into the world. My whole, so now people are. They’re going to be like, don’t listen that ops cast and they don’t believe it. I’ll take the arrows and I’ll take the arrows. You know, one thing I wanted to bring back into attribution, we were talking about funding, right? Funding technologies, and funding software and different tools.
And I think it’s really interesting. I, you know, there’s an example that I I’ve seen multiple times in different forms. And the example is this or reliance on lead source as an attribution. Where the lead source gets set by, who funds the acquisition? Right? So here here’s a great example. Discover org is being paid for by the sales team.
They have a new discover or name or name they found from discover org. They send them an email. They respond, I’m not interested at this time. And then marketing puts them in a nurture sequence and then nurture it to them. And eventually they convert and they watch a webinar. And then. Download a white paper and they do all the things that as marketers we want them to do.
And then all of a sudden that person MQL is they go to the BDR team. The BDR team calls them. They do convert the lead to a contact with an opportunity. And all of a sudden we have this wonderful set of, of rich activity that this person did. But yeah, the only thing we tie anything back to is, oh, this is a Salesforce lead because we acquired them from discover org and that was funded by sales.
So marketing get out of here. We don’t care about anything that you did. And, and so who has the dollars often drives the discussion? So, so let’s, let’s, let’s kind of take this a little different direction. So this was kind of leading into where I wanted to go, which is pre our previous guest. Uh, one of our previous guests, I thought made a really good distinction about attribution modeling versus.
ROI. And I, and so I, you know, one of the, to me, one of the things that has led to some of the skepticism or challenges with attribution modeling really growing is that I do believe that a lot of marketing leaders try to use it as a way to define ROI. Of marketing it and what the marketing spend. So, um, I guess a couple of questions on that one, do you think, do you, do you think that makes sense, right.
Differentiate the idea of attribution modeling and how and what we should use that for versus it being used as ROI and well, let’s start with that. Yeah. I actually don’t believe you can have one without the. My view is that, and I’d love to know more about where that person was coming from. But my view is the only way you can get to an ROI metric is to first do attribution with a multitouch approach.
So you’re measuring the full funnel and all of the touch points and then pairing it with cost. So I don’t know how you can get to an ROI number without, without pairing attribution and cost together. And I think. Yeah. So where were they coming from? So, yeah, so I think the example I use and actually this person didn’t agree with this.
Uh, but I think if you, if you look at some marketing activities, they, uh, and I’ll sort of loosely lump them into the category of branding, which, which are not necessarily intended for near term. Uh, lead and revenue generation. And so just by definition right there longer-term play. Um, and they’re intended to help in the longer term.
But we’re always looking at, I mean, generally speaking, our attribution modeling has a relatively short sort of timeline to it. And so my, my assertion was, well, maybe that, that kind of activity, there should be a portion of the marketing budget, overall marketing budget that is kept to things that you normally don’t think you can measure well, but shouldn’t even, you shouldn’t even try.
Okay. And I’ve heard some CMOs talk about this. Um, and I think she made a case that, you know, there’s a, there is a potential that you can, you can measure the effectiveness of brand like a brand redesign or something like that. I think that, I think that’s, but if you talk, uh, thinking of, of the ROI of marketing versus the ROI maybe, or.
Result of specific campaigns, tactics, activities that are really focused on revenue and lead generation. Maybe I think maybe that’s the distinction. Yeah, I think, well, so within the context of attribution, right? Measuring campaign effectiveness, program effectiveness, I think that’s really what we’re talking about here.
And I do think often branding kind of gets its own set aside and bucket where we see. We’re willing to commit X percent of our budget as a loss lead loss leader, where we don’t expect to tie anything directly to it. SEO oftentimes will maybe also fall into that. Right. And we can measure SEO and then we can have campaigns to measure it.
But branding is certainly kind of this big, hairy thing that’s out there. And we need to maybe set that aside in general now. If you’re looking at, how do you optimize your budget across all of these channels? Right. That’s maybe a different question than the context of looking at ROI and campaign effectiveness and really understanding which tactics are driving revenue right now.
Yeah, I think, I think this is so, you know, I think one of the reasons why this, this topic of attribution and, and, and everything has been a pretty recurring theme, not only in the pot and on our podcasts, but also just in kind of in the marketing and marketing ops space for awhile now is because. I think there’s been confusion about what’s the right way to use it, or maybe not confused differences of opinions on how to, how to best use it.
I would assert that it has been used by some people to try to build a case for like, Here’s the case for why marketing is here. Right. You know, we’re trying to, we’re trying to make that linkage of revenue to marketing activity. Um, and so attribution modeling was set up for that. Um, I think that’s misleading.
I think we do that. And it’s, it’s one of the things that happens in the background and we can use the outcome potentially of attribution and ROI analysis. To make projections about what happens if we invest a million more dollars in our marketing budget, what do we think the outcome is going to be? And that’s really where we want to go, but I don’t think it’s about necessarily, you know, beating our chest and say, look at how much revenue we’ve generated and we’ve influenced.
I think, I think that’s a misleading argument because as soon as we do that, as marketers, we have sales standing on the other side and say, No, you didn’t do that. We did that. Right. And, and this is a natural. When did, when did you last president? This is so natural. And the truth of the matter is we never believe a salesperson when they said this was the lead source and we never believe a marketer that says I closed an opportunity.
Alright, salespeople close deals. That’s their job. They do it really, really well. Marketing’s job is to help identify opportunities. And then when we identify those opportunities, we want to make sure they close faster for more money and at a higher win rate. If we can do that as a marketing organization, we’re winning and that’s the message we have to stick to.
And instead of using attribution, you know, to stand up and say, look at how great we are, we should use it internally to say, here’s the things that worked really well. And here’s how we should deploy our next marketing dollar. Because as an organization, marketing needs to answer those two questions.
Fundamentally, what’s worked well. How do we spend our next marketing dollar? If we can use attribution and ROI analysis and use that as a stepping stone to then build out recommendations on how we should spend and deploy our budgets, then we’re doing things the way that we want to be doing things. I almost want to stop the recording right now, because I think that like sums up actually how I feel about it.
I, so I, I tend to agree with you. I think it should be used more to identify where we could do better as marketing. Um, I just, I think it has been used in a way different than that. I’ve seen that too many times and I think there’s part of that is that sort of. Tension between sales and marketing in particular, but in, yeah, it could be finance and marketing, right?
Yeah. And I think that’s a healthy tension. I think some tension between the organizations is, is a good thing. I think too much becomes unhealthy, but you know, sales should hold marketing accountable and, and marketing. If, if they are saying, man, when we’re involved in helping you generate opportunities, they close faster and for more money, why don’t you want more of these?
You want to make your. We’re helping you do it and you’d be nuts. Not amen. Yeah. Right. We’re S yeah. The department marketing department right. Is responsible for a number of things, but when it comes to this conversation around attribution, ROI, and alignment and a business, it all ends up coming down to dollars and revenue generated and urinating.
That’s what you are, right? Like your department, if you’re particularly, if you’re focused on like demand generation or like leveraging technology to have throughput that is fast, clean and efficient, you’re an enabler. And at the end of the day, yeah. Like you shouldn’t stand up and shout from the rooftops that, you know, you generated all this stuff.
What you should be doing is validating every single day. That your assumptions and your alignment and the discussions that you’ve had with sales, whether that’s at the leadership level or just your counterpart, who’s a BDR, a E that you said like, Hey, I’m seeing that these leads from these sources maybe are working pretty well.
Is that right? Is that actually the Sal? Is that actually the SQL, do we need to redefine this? Are we in alignment still? Cause like the way that we’re looking at this reporting shows. Where we might spend more dollars. Are we missing something here? And at the end of the day, you’re just an enabler, right?
And you’re constantly validating your assumptions or revalidating the things that you’ve kind of set in agreement. And hopefully you’ve done that with your counterpart in sales, right? Like you’ve built those agreements. Um, and you didn’t do this in a silo and you didn’t do attribution and MarTech setup to figure out where to spend more money without actually first talking to the sales staff.
Absolutely. But I, and I think, I think it does come back to the money though, right? I mean, if you’re a. And your chief marketing officer comes to you and says, I want a million dollars to run this set of campaigns. And the CRO comes and says, no, I want that million dollars. I can hire two or three sales reps.
You know, who’s going to get the money. And I think, I think that’s the trap, the false trap that attribution has fallen into where the marketers say. Yeah, well, this is all the things I did with my last million dollars. And I think instead the narrative needs to change. And I think what we need to be able to do is make predictions and, and prescribe what we think will happen with an extra million dollars into it.
And if you can demonstrate that and you can say, well, my return to sales on that million dollars is going to be 10 X and I’ll return 10 million to sales. If you hire three AEs, they’re not going to sell anything for six months and you’re not going to get any, and your lift on that. Let’s, let’s make the investment in marketing and sales.
You gotta, you gotta ramp. You gotta ramp somehow, you know? And so those are the conversations that are LT to have at an executive level. And even at the director level where you can have conversations about. What’s what you’re going to get. If you invest more money in marketing and or sales. Yeah. I mean, and people don’t scale, right?
Like you can only make so many one-hour demo phone calls in a day, right. Or, or so many followup calls or emails in a day. Right. So like there’s still even hiring additional headcount while important. You’re, you’re increasing your ability. Put in more, uh, through the funnel because more of it can get routed to more people and then they can do the maximum output.
And let’s assume that’s 80% of what a hundred percent would be, right. Their maximum output is probably 80%. And let’s assume that that’s X amount of calls a day or whatever. So yes, two more people is going to have. And it also enables us on the marketing side to pass in more through the funnel because they can follow up on more.
Right. And so, but unless they’re literally like dial in for dollars and they happen to have a super stellar, close rate and a great process on the BDR side of things, like we’re all striving for that, right? Yeah. We’re all like, how do we find the person that can close at 20% and just pick up the phone and call somebody right.
So, so, uh, okay. So P I think, I think it would be, so you say, if I’m hearing you, right, you think that there you are, maybe we’re looking at, or talking about it a little different, but I think we both have seen where attribution modeling has been used in ways that it probably, we don’t think it’s the best way of using it.
Um, so from your perspective, right? So let’s get to the, kind of the core of this, right. Well, you know, we’ve all probably spent some time, money, effort, blood, sweat, tears to build out attribution modeling of some sort. Um, yeah. Now that we have that, we, what is your, what, what would you recommend is like, how do we actually use that to, to improve outcomes, whatever those outcomes.
Yeah, I think the first thing you have to do is pair with costs. I think once we have an attribution model in place and we can say, well, we created a hundred million dollars of pipeline. We influenced 50 million in closed one deals. We spent this much on marketing. How do we look at the tactics that we’ve done in the past and how do we quantify the investment we’ve made in them?
So if that. You know, if that’s digital ads, that’s pretty easy to quantify. If that’s a trade show, maybe you can quantify the booth, the sponsorship, but what about the three people you send to that trade show? If it’s a. Yeah, I w I was just gonna, I was just going to ask you one of the things I always get into the cost side is, do you include, do you like try to allocate head count and stuff like that?
I mean, I I’ve like my opinion is that that’s way too complicated. Like I just do direct directly attributable. Yeah. I think there’s two schools of thought and I’m open to either. I think it depends on your organization and how you’ve recorded costs. I think it’s helpful to bring in the implicit cost or the people cost not necessarily the technology cost or platform costs.
No, we can, we can get an average cost of a person and how many hours they work, you know, year. And we can spread that out. And I think that’s important because when we start to get into some of the tactics we use as marketers, whether they’re emails or internal webinars or things that cause people’s time, we need to be able to account for that.
And so once we’ve done that and we can really get a clear vision on what the return is on our investment, we can then start to make decisions. And I think a really good use case for this for example, is we believe trade shows drive a lot of pipeline and they drive a lot of closes and we believe that they drive and we I’m using this as an example in the generic.
I don’t necessarily always believe this, but we think in general that. They drive a lot of pipeline that drive a lot of closes and more so than maybe an email that we send out. Well, a trade should also cost us a lot more money and email doesn’t cost us. It cost us four hours, maybe, maybe, maybe eight, depending on how many people get involved in the size of your organization.
And so all of a sudden, if you start looking at how much pipeline maybe was influenced by that email, Versus that trade show, the trade shows obviously going to have influenced more pipeline, but when you look at the cost and the ROI that that framework looks a little bit different on, all right, maybe this email was more effective than we thought it was when we look at it on a, on an ROI basis.
And so we have to be able to measure that cost and apply it to the campaigns that we’re running, because, because then we can start to make decisions. And when I think about attribution, I believe fundamentally that is the cornerstone and the bedrock upon which we can really start to build higher level analytics.
And I believe as we mature as organizations, we have this maybe crawl, walk, run approach where crawling is the attribution and ROI. And then once we can use that to start making predictions about future pipeline and future revenue. We’re starting to get in that walk phase. And then if we can get to that run phase where we’re choosing the right tactics at the right time, with the right combinations to maximize our contribution to sales, subject, to the money we’re spending and the people we have to execute marketing, then we’re really humble.
Then things are fantastic. And if we can dynamically tweak that as assumption change, and as we have conversations with our sales partners, Our counterparts in sales and they say, ah, this is working really well. Are you seeing that in the data? And then naturally flows into our models? That’s when we really, really are doing well as a marketing organization and that all starts with attribution, but again, that’s not the end game, but we’re really trying to build higher level analytics on top of.
Yeah, I appreciate you kind of, um, saying, without saying the, these words directly, if I could put words on it is, you know, um, you know, begin with the end in mind. Right? And so you’re the attribution components of this conversation are really about enabling, um, what the end state could look like and making sure it’s established.
I really appreciate. The idea that you’re championing the cost of human capital, uh, when it comes to things like trade shows or even an email. Um, I think a lot of time we have a hard time measuring the cost of email and, you know, one of the ways. Done it. And my career is of course, just average amount of time spent on email and email optimization by people.
Um, and then, and then maybe a little bit of a blend on some, some fractional cost of what the actual like Marquetto platform costs or whatever. Right? So X amount of emails deliver over time relative to the cost of Marquetto and you kind of put those two things together and. Get a sense of those, those costs.
And so we do that with email, right? We measure people like that’s one of the best ways you probably can measure email as a cost center. And then, but we don’t, a lot of people don’t measure people for events, which is like mindblowing, right? That’s for webinars for that matter. Like that’s mind blowing to me.
Like, no, you’re literally taking someone’s time. And you paid it. And I think, you know, that this community knows this marketing operations is continuously being bombarded, revenue, operations, continuously being bombarded on their time and, and all marketing functions and sales, operations functions are feeling the same pressure.
So if we’re not taking into account how much time they’re spending on these things, there’s, there’s no hope. And I think. One of the things that we do and we help organizations kind of get to that highest level, that the run level, where they’re choosing how to invest their next marketing dollar is we build these, we’d go back to the operations research that Michael called out at the beginning, right?
We take this idea of constraint optimization, which basically tells us how do I apply my resources the best way I know, how and what that means for a marketer is. How do I apply my budget and my people’s time in such a way that I maximize the contribution to sales and having both the budget, the dollars and people’s time, the people you have available to execute programs and campaigns.
Those are, those are the inputs. Those are your constraints. And, and then from there you gotta be able to create the best outcome you can. Yeah, totally. But I think it’s really interesting that you’re talking about, because I think a lot of people probably fall into this camp more than I realized until you just said, this is that I thought of attribution is sort of that’s the end game.
And I think your, your idea that getting to attribution is actually. One of the early stages of really getting the most value out of this data is, is really insightful. And like it’s making me go, okay, well, I’ve been missing the boat a little bit here too. So, um, so one of the things that you talked about in addition to the, the, the other constraint, I think we have in addition to, um, you know, budget dollars for spanned and then people with human capital is also time.
So I think one of the other challenges that I’ve run into with, and it’s falls into probably just about any reporting analytics and including attribution is, you know, it takes so much time to get the output that you don’t really have enough time to then truly learn from it and get one of the insights.
So your knee, like you never really get to that next step. Right. So, um, how is it? It sounds like maybe that sort of the run stage you’re talking about is where you get to that, where you get a more almost real-time feedback loop. Is that, am I following you correctly there? Yeah, I think, well, first of all, I think a lot of us, we have a tremendous amount of data that spans more than enough time.
Right. So we have these marketing automation platforms. Marketo or Eloqua or HubSpot. So, yeah, just in case I wasn’t clear. So I met was the time to actually analyze the data. Like they, the result of say an attribution model, right. To analyze it and to use it that time to actually understand what is the data telling me I should do that part is where I think a lot of us have, we have tons of data.
Um, You’re right. But I don’t think that we, most people probably, if they were honest would say they don’t really do much. Well, so I think there’s, there’s two answers to that question, right? There’s technology out there that can help you. And that’s not a shameless plug, but it is kind of a shameless plug, right?
I mean, there’s, there’s technology that can help you. Nice. And, uh, what’s the second part of that is I think one of the biggest skill gaps that I see across revenue operations is data literacy. I don’t think there’s enough of it. And I think part of that is natural. Part of it is we come out of our undergrad degree in marketing or, um, you know, some other discipline that isn’t technical and then maybe we go get an MBA or something, but we don’t, we don’t ever really gain from an academic perspective.
The data literacy that we need and then the mathematic foundation for this. But I think that it’s something that can be gained and learned. And I think is something that is, is a skill gap that needs to be filled in the marketing ops and revenue ops committee.
I would agree with that. I think, I think a lot of people lack, um, the fundamental understandings of how to kind of, um, grab and assess and access and leverage data in a way that’s meaningful. Um, but I think a lot of that also has to come down from knowing, you know, we’ve reached a new stage in the evolution of marketing ops and rev ops and just leadership in general.
They’ve been around a lot of these, um, capabilities for, well over a decade now. Right. And we’re starting to know what questions to ask. And, and prior to that, it was sort of like, I don’t really even know where to begin. Right. Like I have the whole world at my fingertips in terms of like, the possibilities are endless and like, what should I even be asking?
Uh, and then, and so it makes it really difficult to treat. Ascertain data literacy, like, get it and put your arms around it when you just don’t even know what you’re looking for. Uh, and so I think, you know, message to the leaders out there is like, again, kind of for me, I, I hear what you’re saying and I thinking like beginning with the end in mind, what is it that you’d like to do?
What do you need to inform your decisions? In the future. And then how do I back my way into setting up the data pipeline to be able to answer the right questions? Yeah. I think that’s a really good point. And I think coming back to Michael’s original question, I don’t think there’s enough time spent like, so here’s what happens.
QPRs are coming out. Your CMS says, man, I need these charts. They’ll meet these charts. So it’s a fire drill. Right? And then next quarter, it’s a fire drill. It’s just this hamster wheel of. But nobody is sitting back saying, okay, how do I think about this data holistically and answer the questions I need to answer as an organization.
And I think for all the listeners out there, the number one tip I can give you is, think about measuring your data through time. One thing that all of these systems lack is the ability to measure data through time, whether it’s a marketing automation platform or your CRM. You can take a snapshot of the data at any given time, and then you put it in Excel and you make a couple of pivot tables, and then, you know, you’ve got something and then next quarter, or next month, or next week, you’re asked to do the same thing for another QVR or another review and you do it again.
And so now you have two points in time and you do it again and you have three. And so when at some point you need to bring those things together and be able to measure your business consistently through time. And I think that is the most important thing we can do, because the reality is no matter what metric you choose to follow there’s and there’s a million of them out there, the key is to understand how that metric is changing and how you’re improving, or if you’re not improving, why not?
And then how do you, how do you change course? Yeah. When someone asked that question, someone’s going to say, Hey, have you looked at. Snapshot in time that we took in that last QBR and compared it to the one that we did three times, three QPRs ago, if nobody asked that question, like very few people are going to like, have the wherewithal to say like, Hmm, I wonder what that looks like comparatively to the last time we did this, like, it just doesn’t happen.
Well, I think the whole point, right? The data by itself, without context, it doesn’t really help them. Okay. Is that good? Is it bad? Is it better? Is it worse? Those are the more interesting questions. It goes back to data literacy. As you get more mature in your experience with data, those are questions that are so natural.
Become natural. And, and I think they are often overlooked. Absolutely. I agree with that. Look at data through time. That’s the message. Yeah. I totally agree with this. So this is, this is great. So I was, you know, I was all set to ask you our standard question about ready if you, if there, you know, if, if you could design a certificate for marketing ops professionals, right?
What would you consider most important element? And I think we already have that. I think it’s, I think it’s becoming more and more prevalent and everybody it’s it’s buzzy, right? People are like, oh, data analytics. Everybody’s talking about it. And it’s so exciting and all these things, but the reality is there’s a, there’s a huge skill gap.
And the truth is even if you go get an MBA, And they say you’ve got a specialization in analytics. And, uh, you know, there’s probably a lot of people who are going to hear this and hate me for saying this learning how to do pivot tables and Excel only gets you so far and, and you gotta, and you gotta be able to absolutely a little bit of real life experience.
Get your hands dirty and learn, learn how to manipulate data and other systems.
Yeah. Yeah, I agree. I think I would, I would tack on, I think there’s two types of data literacy that specifically, I mean, there’s, well, three, I guess three is just understanding how to bring data together. Right? So there’s like, that’s part of it. But then really core is understanding basic statistics. And I think most people like I’ve got high school students and they’re taking advanced math stuff in high school, but they don’t even have an option to do statistics.
Right. It’s not even in the cricket and they’re still doing like algebra two, which I like, I appreciate it at the same time. It’s not really, probably what they’re going to use unless they ended up going down some sort of engineering, you know, I would say, I would say statistics are, I think I took four statistics for us between undergrad and graduate school.
And, uh, and it was about the fourth time that I finally was like, oh, I get it now. It makes sense. So it’s hard. It’s hard, right? Yeah. No, it is hard. That’s why I’m saying, I think people need to learn that more. The other one I would say is, and this is my box. Everybody in marketing ops needs to know a little bit about finance, right?
It’s another sort of version of data literacy. But I think understanding that part of the world too, because I think what you just talked about, right? You need to understand the costs. You need understand how to allocate your budget and you need to understand what are the numbers telling you from a statistical standpoint, those two combined kind of help with, if you’re out there, you’re a marketing ops person or a marketer of any sore or sales out.
Go find your FP and a analyst and find the beer or a beer. Uh, I think they can be your best friend and they can teach you an awful lot. Yeah. Have them tell you what, what your, what your company’s cost of capital is. Are they required? I think it’s really important because there’s so much, especially with SAS businesses.
So much of the ARR model is around. Customer acquisition costs, lifetime value of customers, trying to measure these things together and really try and measure churn. And w how much has churn costing us? These things like you have to have some finance, or you have financial literacy to, to answer these question.
Yeah, you do have, like, especially if you get into the world of SAS, like they’re looking at, you know, the payback period and how long that takes, right? If it costs you a certain amount of money to acquire somebody, sometimes it’s two or three years later before you’re even making a dollar on that. Right or that company.
So being able to understand this, uh, every time we have a conversation around revenue and finance and stuff, I am always appreciative of my Alma mater. I went to business school at Cal state Fullerton, and I had to take business statistics and of course finance cause I was in business school and I, for all the listeners statistics.
I had to take it twice, but I, I do appreciate your times, Mike, being in rural sites as I got it, right. It took me four times to do it. So,
um, you know, I might have found a way to get a tutor really like helped me out. So, um, Well, so this is great. I think we could probably continue on for hours, but I think we need to, we’re going to need to wrap it up. Pete. Thank you so much for your insights today. If folks, uh, our listeners want to get in touch with you or follow you online or something.
Yeah. LinkedIn is great. where you can find me there. And similarly on Twitter and all the other platforms Pete for south is, uh, is my surname reach out on LinkedIn. I’m happy to connect.
Terrific. And Mike, thank you as always, always fun to have these chats and mostly to our listeners. Thank you for, uh, letting us invade your, your head space there and, um, continue to give us your feedback and like a subscribe don’t like us. Tell us what we should do differently. Tell us everything. Um, yeah, we want to hear it, uh, but mostly appreciate.
And, uh, thank you. Bye. Bye. Yeah, thank you. Bye bye.