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Marketers certainly don't lack for ways to size up their customers.

Demographics, online and offline viewing habits, purchase history, lifestyle, interests, response rates, likes, comments, clickthroughs, opt-ins, conversions, influences, behavior-tracking... the list is seemingly endless. Algorithms combine and analyze those factors to define and track customers in virtually every aspect of their daily activity.

In the B2B marketing world, digital transformation during the pandemic has had an impact on which metrics matter. More channels, more statistics, and more opportunities for measurement have, in many cases, simply created more trees to obscure the forest. As face-to-face interactions with sales reps have receded and buying has become self-directed, customer behavior has become even more abstract.

Marketers are discovering that tangible, long-term gains are being lost in the pursuit of arcane "success metrics" that fail to move the needle in ways that align to sustainable revenue growth.

Enterprises need a new way to organize and interrogate their audience touchpoints—and move more effectively toward larger, long-term objectives.

The Move to Outcome-Based Marketing

Outcome-based marketing is a discipline gaining interest among B2B and B2C marketers alike. It seeks to reset the definition of success in business marketing by beginning with the end—that is, working backward from desired customer behaviors to the factors that drive those behaviors.

In outcome-based marketing, results aren't the sole measure of success. Results, as is often pointed out by outcome-based practitioners, are not the same thing as outcomes. Results are tightly defined and short-term; outcomes are long-term and reflect a broader, more vital future.

Pursuing a goal in outcome-based terms means defining the end state and solving a shortlist of factors that achieve that end state, without getting distracted along the way.

For example, instead of simply logging increases in people who click an ad, it would mean finding prospects "in the middle"—those between awareness and conversion—and moving them along a path to becoming a loyal, repeat customer.

An outcome-based approach increases customer lifetime value while lowering ad costs. Outcome-based marketing outperforms reach-based media planning on a ROAS (return on ad spend) basis by more than 50%, MMA Global found. Moreover, it found that "movable middles" can be predicted with 99% accuracy—a true indicator of how effective an outcome-based approach can be.

Putting Outcomes Into Action

Adopting and implementing an outcome-based strategy involves a reset of many of the basic tools of modern digital marketing. Planners need to view their processes through a different lens.

Here are five of the most critical areas of change when switching to an outcome-based approach.

1. Dive deeper into your business goals

Outcome-based efforts involve a shift in mindset by internal stakeholders as to what constitutes marketing effectiveness. Team members may be required to move past clicks and impressions for their product lines in favor of a more holistic viewpoint.

Outcome-based marketing also involves re-examining how budgets, campaigns, and target audiences are aligned to achieve business goals. What does the targeting need to be? What are the KPIs for each channel? The measures derived from such critical questions will roll up to your larger objectives.

2. Optimize the channels you're invested in

Do you know the value and purpose of each channel in which you're active? Knowing the value of various customer touches can help determine multichannel decisions.

If you know that your customers need a certain number of touches, on average, before they make a purchase decision, those will likely occur across various channels.

Paid search, for example, is conversion-driven; that makes it valuable at the latter stages of a purchase journey when a prospect is doing a very specific search and looking for a very specific answer. A paid social ad, on the other hand, may not drive a direct conversion on the spot—but it could help you track what is pushing the customer toward a conversion.

3. Use the correct data

With the right data foundation, it's possible to see at a granular level who your prospects are and how you engage with them.

In the digital world, sales are no longer a linear process; they're a meandering journey. By identifying the events and experiences that catalyze that journey, you can create strategies to replicate them.

Most sales are self-directed by the customer. Conditions must support that reality.

Also, with metrics, less is more. "Analysis paralysis" is a common marketing malady, so continually ask yourself whether a specific metric is important to track.

4. Use predictive analytics

Predictive analytics can be the key to determining the right media spend and strategy. As mentioned earlier, it's easy to get caught up in followers and likes on social media—to the detriment of actual outcomes that help build your business.

Enterprises have a lot of information about their customers and their behaviors that can be fed back into media campaigns and users for targeting. The idea is to create "lookalikes" for your most valuable audience segments based on their standard behaviors, then replicate those conditions.

Predictive analytics can help lookalikes in the middle—those caught between awareness and conversion—to move along in their journey.

5. Continually refine your strategy

Test, test, test—that is the rule of marketing in the digital world. Once you launch an effort, refine your content, creative, and spend continually, one piece at a time. Let the data speak for itself about what's working, what's not, and how to optimize each element. (One caveat: some marketers cross over into over-testing. Don't get into a market and then make hasty decisions if the data isn't conclusive.)

It's smart, in all aspects of your outreach, to emphasize progress over perfection. Digital marketing is about agility, even when planning. Focus on your biggest impact items first, and don't attempt to get it perfect right out of the gate.

Seeing the Big Picture

Outcome-based marketing is like relationship marketing with a twist. When executed effectively, it builds long-term partnerships that embed companies deeply into their customers' ecosystems, and it does so with a higher ROAS than reach-based planning.

Perhaps even more important, outcome-based marketing empowers a big-picture view of organizational marketing. It sets the agenda on multiple fronts: media spend, audience targeting, user experience, KPIs, CRM, and more.

Marketing goals can become blurry for even the most seasoned pros. An outcome-based approach may just provide the well-reasoned clarity they're looking for.

More Resources on Outcome-Based Marketing

Marketing Activity Metrics Mean Little: Here's How to Really Prove Marketing's Value

PR Measurement Is All About Outputs, Outtakes, and Outcomes: Shonali Burke on Marketing Smarts [Podcast]

The Marketing Metrics That Matter to the Bottom Line

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image of Lindsey Byroads

Lindsey Byroads is vice-president of client services at R2integrated, digital experience agency. She serves as the primary liaison between clients and R2i's digital activation, creative, and marketing technology teams.

LinkedIn: Lindsey Byroads