All companies like to think that they operate based on a meritocracy. Not only do many believe that it is the most fair philosophy, but they also believe that it generates the best business results.
Fundamentally, it means that power should be determined based on talent, ability, and provable achievement. In the workplace, this philosophy takes shape through a number of concepts. Among them the belief that the better idea (backed by sound reasoning and data) should be listened to, no matter who came up with it, and the idea that those who generate more value for the company should be rewarded for it in advancement.
Meritocracies, in theory, are objective because they are based on data-driven results. For example, if employee A generated $1 million in revenue while employee B generated $2 million in revenue, employee B should be rewarded for generating twice as much value, no matter how many hours they worked or their reputation.
But in practice, true meritocracy is difficult to execute. Because advancement and rewards should be based on provable achievement, a lot of accurate data is required. How can you determine who has more merit when different departments -- even different functions within the same department -- are judged by different metrics?
Then, once you figure out the right metrics and goals to base your meritocracy on, how do you accurately measure whether teams and individuals are achieving them?
A true meritocracy requires three things: the right data, transparency of data, and a data-driven culture.
The Right Data
It’s easiest to be truly objective about who is achieving what when everyone’s performance is based on the same metric. It makes it an apples-to-apples comparison. This brings up the obvious question: what is the right metric to evaluate both the sales and marketing teams?
The goal for all organizations is to have each team’s performance measured based on outcomes that are most important to the organization. For most, that is revenue.
Since the performance of the Sales team is already measured in terms of revenue, it means organizations need to figure out how Marketing can measure their performance with revenue.
The answer is marketing attribution. Marketing attribution connects marketing efforts (ads, emails, blog posts, ebooks, conferences, etc.) to prospect, customer, and revenue data that is held in the CRM. Each marketing interaction is called a touchpoint, and then attribution models can be applied to credit each touchpoint with an amount of downstream revenue. For example, a linear model gives each touchpoint an equal amount of revenue credit; a W-shaped model gives the first touch, the lead create touch, and the opportunity create touch 30% of the revenue credit each, and splits the remaining 10% among the rest of the touchpoints. Read more about attribution models.
The closer the attribution model can mirror the customer journey, the more confident organizations can be in measuring their marketing’s performance with revenue.
Transparency of Data
While this may seem similar to having the right data, it’s important to highlight the ability to demonstrate where the data comes from and how you came up with the final metrics.
Attribution connects marketing data to sales data (e.g. revenue) and the method in which that data becomes meaningful -- through an attribution model -- is where you get buy in from the stakeholders. A first-touch model, for example, will undervalue the efforts of email marketers and other lead nurturing efforts, who by definition, can’t have the first interaction. Likewise, a last-touch model will undervalue the efforts of social marketers and other demand functions who primarily impact the top of the funnel. If your organization uses attribution models that are biased in favor of particular functions, you won’t get buy in.
Advanced multi-touch models and custom models, in particular, allow organizations to more accurately model their customers’ journey and accurately give credit where its due. Credit is dispersed throughout the entire funnel with added emphasis on engagements that had a higher impact on prospects, like convincing them to do a demo.
Once a model is agreed upon by the various stakeholders, the data is accessible. It’s not a black box only to be seen by management -- anyone can look up attribution data and can see which efforts are truly making an impact and which efforts aren’t.
When performance evaluation is based on transparent results and data that everyone believes, employees can’t hide behind their reputation, their job title, or status; the numbers speak for themselves.
Everyone knows a workplace culture that is driven by egos -- where leaders make decisions by gut instinct and everyone has to follow along because they are the boss. When marketing performance measurement is accurate, nuanced, and of course, revenue-centric, there is a culture shift that takes place.
When the numbers talk, employees make it about the work that drives results. Projects with proven positive ROI and revenue generation get supported and the ideas with the most merit get listened to.
According to a study by the Aberdeen Group, “data-driven organizations experience a 27% year-over-year increase in revenue, compared to 7% for other organizations.”
Meritocracies work because they are objective. When decisions are based on data, it allows true talent to rise to the top and the best ideas to prevail. For B2B organizations, attribution is the key that unlocks true meritocracy in the workplace. It enables marketers to demonstrate the value of their work on the same level as the rest of the organization, and creates a culture where data and results win.