The last time I had a full-time corporate job, I walked into my first executive leadership team meeting sporting six-inch heels, fake eyelashes, and my best dress, under which I was rocking not one but two pairs of Spanx.
I felt prepared and had big plans about how I’d lead marketing and the way things would be done.
Ten minutes in, I realized how in trouble I was.
Everyone else on the team had math. The product guy had math on features, delivery dates, and the customer’s journey. The sales guy had clear metrics on expected numbers and call times. They all had clear KPIs, which were standard for a big company.
What I had yet to experience in my career was that I would now be responsible for bringing math into marketing. And I had to do it in record time.
As a new executive, it’s easy to overpromise and underdeliver. Or assume things are simpler than they are. In my previous role, I had created strategies and measures, but every job is different, and tech stacks vary.
I quickly realized I was in over my head to provide marketing metrics to the leadership team at a higher level.
Unfortunately, Google Analytics wasn’t cutting it and did not drive revenue; what I needed was a point of view about what was appropriate to look at and measure in marketing.
But more than anything, I knew I needed to connect marketing to a legitimate business reason.
In other words, marketing needed to be about math.
It’s why today at my company, we never let one of our executives walk into a meeting with math.
We have a very clear point of view now, but it’s incredibly difficult to know where to begin when you’re just starting out.
Going from 0 to 1 is hard, but it can feel like climbing Mt. Everest in many industries. Take inbound, multi-channel attribution, for instance: I don’t know anyone who is crushing this.
So, where do you start?
(Spoiler alert: It’s not with impressions! No one gives a shit!)
With the 3 V’s of measurement: Volume, Velocity, and Value.
Measuring the 3 V’s gives you meaningful marketing math that will have a big impact on the business.
Let’s define each.
Volume
Volume is how many deals or opportunities you have going into your pipeline.
There are many ways you can measure volume, which include:
- The number of open opportunities
- The number of meetings you get
- The number of dials you made
- The number of meetings attended
- Your total addressable market (TAM)
- The percentage of TAM
- Your market penetration
These are all volume metrics, but you need to pick ONE that is meaningful to your business. And you should choose the one that solves a business problem.
For instance, is your problem:
- Not enough leads?
- Not enough meetings?
- Not enough meetings that convert to a deal?
- Do you have a high churn?
There are lots of measurements, but you must pick the one that will help you solve your biggest issue.
A word of caution: As a marketing leader, it’s essential not to do this in a vacuum; you need to bring others into the planning process. Check in with the rest of the leadership team and give them three options, then see which one aligns with what sales needs versus product, etc.
Velocity
Velocity refers to the speed at which things move through your pipeline. Said another way, how fast does someone go from being a stranger to becoming a closed deal?
Nine times out of ten, it’s about the speed through your funnel, from first touch to close. But it may also be about the rate of customer adoption.
I once worked with a client that got paid on transactions. (Think: PayPal.) They’d close a new customer and go through the onboarding process, but they wouldn’t make any money until that customer made a transaction.
Their velocity problem wasn’t in the sales funnel; they’d already closed their customer. What they really had was a slow customer adoption issue.
Another velocity red flag: You have a really long sales cycle. If your sales cycle is two or three years, that’s not a good velocity metric; pick something else. Instead, find a business problem in the company where things need to move faster and build your metric around that.
Value
Value means revenue and understanding what your ICP is going to bring in. It comes from the marketing and sales teams coming together to determine the strategy for choosing customers and your product/market fit. This will help you determine the value of each deal, which will be different for an SMB versus an Enterprise.
Those in SaaS will tell you to track your customers’ lifetime value (LTV), but I prefer Annual Recurring Revenue (ARR). Your LTV is a bit like sticking a finger in the wind, whereas your ARR is clearer and tells you what to expect in a year: what value can you extract from your opportunities in the next 12 months?
The funny thing about ARR is that every person I’ve known and client I’ve worked with exaggerates their size. But if you start with the wrong number, your marketing math is baloney. So it’s essential to be honest with yourself, your team, and ELT about your volume number.
And one more thing about value metrics: if you have more than one ICP or product, you should also have more than one volume number.
Value is the most important of the 3 V’s because it tells you how much your current customer pool is worth.
Value metrics include:
- Revenue
- Margin
- Number of shipments
But NOT:
- LinkedIn followers
- Facebook followers
- Email open rates
- Google Analytics
Walking into an executive leadership meeting with inaccurate (or irrelevant) numbers is not helpful. So when I was the only person in the room without math for my marketing, I learned just how important it was.
Back then, I had no one to help me think through this. But after many years of working through marketing metrics, I found the three V’s to be the most helpful and impactful for a business.
These days, I like to say that marketing is math, meaning that you’ll obtain optimal results when you track marketing data and then use those insights to optimize and inform your efforts.
And once you understand the philosophy of the three V’s, you can stop tracking impressions and start measuring business-focused marketing KPIs.
Today, I use it with all my clients.
You can, too.