Contents Quick Guide: Marketing ROI for Dynamics CRM ..................................................................................................................................................................................... 3

Concepts............................................................................................................................................................................................................................................... 3

The Goal ........................................................................................................................................................................................................................................... 3

Leads .................................................................................................................................................................................................................................................... 3

Link to the money ................................................................................................................................................................................................................................ 6

The campaign performance report ...................................................................................................................................................................................................... 7

Calculating Campaign ROI .................................................................................................................................................................................................................. 11

What happened to lead source? ........................................................................................................................................................................................................ 12

Ensuring source campaign is accurate ............................................................................................................................................................................................... 13

How we set source campaign at ClickDimensions ............................................................................................................................................................................. 13

Determining lead source .................................................................................................................................................................................................................... 15

The marketing performance dashboard ............................................................................................................................................................................................ 16

Next steps .......................................................................................................................................................................................................................................... 17

Quick Guide: Marketing ROI for Dynamics CRM It is the quintessential question: how do you measure return on investment (ROI) and the performance of your campaigns when you are using Microsoft Dynamics CRM? As marketers we’re accustomed to our bosses asking this question and expecting a cut and dry answer. However, it is not always so simple to piece everything together to provide a clear answer. Well, kick back and read with us and we’ll try and make some sense of all this for you.

Concepts

The Goal In the most basic form, marketing ROI is simply a measurement of the effectiveness of each dollar spent on marketing efforts. It is the sales output for each unit of marketing input. In other words, how many dollars in the pipeline can be attributed to each campaign undertaken, whether it is your company’s website, an email campaign or a trade show. Armed with this information, you can begin to make informed decisions about where to focus your marketing budget and resources to maximize sales.

In Dynamics CRM, the holy grail of marketing ROI is a dashboard that shows the relative effectiveness of each of your campaigns so you can distinguish at a glance the underperforming campaigns from the top performers, and the revenue output from your marketing input so when your boss asks the dreaded ROI question you can answer quickly and precisely.

Leads Let’s start by discussing the fields and entities involved with tracking campaign performance and ROI inside Microsoft CRM. We’ll begin by discussing lead records in Microsoft CRM. A lead record includes concepts of a person (i.e. first and last name), an organization (i.e. company name) and an opportunity (i.e.

product interest). This is why you can convert leads to contacts, accounts and/or opportunities.

Leads by default include the lead source and source campaign fields. Lead source is a picklist (i.e. a drop-down list of values) and source campaign is a lookup field where you can select a single CRM campaign record. Below is an example of a lead record with its lead source and source campaign fields filled out. Notice that the value for lead source tells us how the lead came to us (LinkedIn Ad), whereas the source campaign field is set to a campaign record (eBook) which we created to track all activity around a specific marketing campaign. This is the proper use of the lead source and source campaign fields. Lead source should tell us where the person came from (i.e. ad, tradeshow, search, referral, etc.) and source campaign should tell us the specific campaign we were running that lead to the generation of the lead. In our example we had written an eBook and we were using a variety of vehicles, including LinkedIn ads, to promote the eBook campaign.

One suggestion we would like to make at this point concerns the placement and enforcement of the lead source and source campaign fields on the lead record form. By default these fields do not appear prominently on the lead form in Microsoft CRM. Since they are key fields in helping marketers understand what is working we suggest customizing your lead form to make them prominent on the form. Internally we have made lead source a required field and source campaign a recommended field. Capturing source campaign on the lead record is especially important since that value will be copied to the opportunity record when you convert the lead to an opportunity. As we will see next, having source campaign on the opportunity record is the key to making the connection between campaigns and revenue performance. Therefore, tracking the source campaign on the lead – the start of the customer lifecycle – is the lynchpin for calculating marketing ROI.

The table below illustrates our suggestion for the use of the lead source and source campaign fields.

Field Use to track Examples

Lead Source Lead origination Search Engine (organic) TradeShow – note that you may choose to create individual entries for specific tradeshows. This is OK but you might also find that you are creating source campaign records for those same trade shows so that you can track the revenue they generated Google Ad LinkedIn Ad LinkedIn (organic) – note that the term ‘organic’ indicates that the lead found us through LinkedIn but not through an ad that cost us money. This could have been through a mention in a group, an update we posted, etc.

Source Campaign Revenue and Cost eBook Campaign 2011 Product Launch

Convergence 2012 Conference – note that if we sponsored the trade show solely to support a product launch campaign then we might create the tradeshow entry as a lead source and the product launch as the campaign. Our decision of what to create as a campaign will be drive by how we want to track costs and revenue MVP Webinar – January 26 Microsoft Referrals

Tip: Don’t forget your service and operations departments! In many organizations they are an effective source of new opportunities. If this is true in your organization, you might consider creating a “Service Campaign” that can be tracked as a source campaign for opportunities. Equip your service department with the right resources and processes so they can be an input for your overall marketing and sales efforts, and you will have created a virtuous cycle of marketing nirvana!

Now, to better understand the lead source and source campaign fields consider where they are found in CRM. The following table lists the entities where each field can be found. Notice that the source campaign field is found on entities that contain revenue amounts whereas lead source is found on entities that represent people. This is a key distinction and also is the key to arriving at campaign effectiveness. What we’re getting at here is that source campaign is the field we must use to measure effectiveness in terms of revenue generated.

Field Entity Note

Lead Source Lead Contact

Although the lead source field is on both the lead and the contact records these fields are not mapped to each other and the values for these fields are contained in two separate option sets. So, they are only ‘related’ in the sense that they have the same name. If you want the lead source to flow from leads to contacts and appear on the contact record you will need to do some minor customization.

Source Campaign Lead Opportunity Quote Order

Opportunity, Quote and Order are entities that include revenue amounts. The association of revenue amounts and campaigns is what will allow us to measure the effectiveness of our campaigns

Note: Microsoft CRM includes an activity type called the Campaign Response which can also track the source campaign and can then be converted into a lead or a contact, account and opportunity. We’ve found that the Campaign Response blurs the line between people and revenue in a way that is not suitable to the way many marketers use Microsoft CRM. The Campaign Response can add a layer of complexity and additional clicks and data entry that can slow the process down. This is not true for all sales and marketing processes, however, so if your organization already makes effective use of the Campaign Response in your business processes, the key here is the same: tie the source campaign into the customer lifecycle as early as possible so your marketing inputs can translate into an effective measurement of ROI. The ClickDimensions solution provides a variety of ways to automate the process of capturing what are, in effect, responses to your campaigns. Our solution can capture responses like email opens and click-throughs, form submissions or visits to landing pages. And the nice thing is that the information is captured automatically, avoiding the need for a lot of manual data entry.

Link to the money OK, now that we have established that source campaign is the field to help us arrive at campaign effectiveness how should we act on this information? Our suggestion is to move the source campaign field to a prominent position on the opportunity record and make it a required field. Below you can see the opportunity form as we have modified it.

By requiring the source campaign field on opportunity records you will be able to look at a view of ‘won opportunities’ and then use the ‘Revenue Generated by Campaign’ chart as pictured below. This is where you will see which of your campaigns are driving revenue. This is the link to the money! Of course, you will also be able to create additional opportunity views to see things like revenue generated by campaign for the East region, revenue generated by opportunities for a specific product, etc.

The campaign performance report Now let’s dive into where and how this information appears in standard CRM reports. If you go to the campaigns view in CRM you will be able to run the ‘Campaign Performance’ report for one or more campaign records. You can also run this report directly from a campaign record.

The Campaign Performance report will pull in campaign cost, budget, estimated and actual revenue as well as value of orders placed. Note that the graphic on the campaign report pictured below contains the following metrics:

- Total Actual Cost - Total Budget Allocated - Estimated Opportunity Revenue - Actual Opportunity Revenue - Value of Placed Orders

The cost numbers on this report come directly from the financials area of the campaign record. Note that the campaign cost is a combination of the costs of individual campaign activities plus any ‘miscellaneous costs’ you enter as a lump sum on the campaign record. The budgeted amount simply comes from the single ‘budget allocated’ field you see below (i.e. it does not sum the individual budget amounts you can enter on campaign activity records).

Below we see a campaign activity that is associated with our campaign record. This is the source of the $1,200 you see in the field above labeled ‘Total Cost of Campaign Activities’. That field is a system calculated field that pulls costs from all of the campaign’s activities and sums them. This amount added to the $24,000 in miscellaneous costs gives us our total cost of campaign of $25,200.

In many cases you might find yourself tracking the cost of the campaign in a spreadsheet and then simply updating the ‘Miscellaneous Costs’ field with a lump sum. This works fine. However, if you do track individual costs as campaign activities, you will be able to see the breakdown of costs right on the campaign record.

One example where tracking costs as campaign activities might make sense is when you are doing online advertising to drive people to a specific conversion event. For example, if you created a white paper to generate leads you may have ads driving visitors to a landing page where the visitors can complete a form to download a copy of the whitepaper. Since this is an ongoing campaign you will be generating new leads from it and incurring additional expense every month. To track this you could simply add a new campaign activity each month with the associated advertising expense for the month. Below we’ve done this and we also modified the associated view of campaign activities so that the ‘actual cost’ column is included.

Calculating Campaign ROI Comparing the total cost of campaign to the actual opportunity revenue from the campaign performance report gives us the return on investment for the campaign. Below we have calculated the ROI based on actual revenue generated:

However, we really should evaluate ROI based on profit instead of revenue. To do this you will want to apply your company’s average gross margin (or average gross margin for a specific product line) to the actual revenue generated and arrive at an estimate of profit. For example, if your average margin is 20% you would simply multiply 20% times the actual opportunity revenue of $229,184 to arrive at $45,838 in net profit gained from the campaign. Using this number your ROI would be based on profit:

What happened to lead source? Since we started the discussion by explaining the distinction between lead source and source campaign we need to come back to that. The reason we first discussed these two fields was to establish that it is indeed the source campaign field that connects marketing efforts to the revenue they generate. Therefore, we concluded that source campaign is a critical field and merits attention to make sure that our campaigns are set up in a structured way.

Therefore, since source campaign is where we will track our costs, this will influence how we set up and use the lead source field. Below are some examples of how you might think of the relationship of lead source, source campaign and campaign activities in terms of their roles in tracking origination, revenue and costs.

Lead Source Use to track origination

Source Campaign Use to track revenue and cost

Campaign Activities Use to track cost (rolls up to campaign level)

Trade Show Microsoft Convergence 2012 Sponsorship fee Speaking fee Travel/Entertainment Collateral

CRMUG Summit 2011 2011 Product Launch (example of where you want to track costs for the product launch and not the individual tradeshow)

Sponsorship fee Travel/Entertainment Collateral Giveaways

Google Ads LinkedIn Ads Facebook Ads Bloggers

Microsoft CRM eBook Google AdWords LinkedIn Ads Facebook Ads

Google Ads LinkedIn Ads Facebook Ads Bloggers

Campaign Effectiveness White Paper Google AdWords LinkedIn Ads Facebook Ads

MSDynamicsWorld.com Bloggers

June 2011 True Stories Webinar MSDynamicsWorld sponsorship

MSDynamicsWorld.com Bloggers

Jan 26 CRM MVP Webinar MSDynamicsWorld sponsorship

By using the lead source field we can look at the standard CRM charts for ‘leads by source’ and ‘lead generation rate’ to determine what is bringing prospects to us. The further analysis of campaign performance and ROI obviously tell us whether we are getting to the right types of prospects to drive revenue and profitability. Using this paradigm, you can think of the lead source as the channel. Each campaign may use one or more channels, and you may use those channels in multiple campaigns.

Ensuring source campaign is accurate A critical piece in associating revenue to your campaigns is to make sure the right campaign is getting associated on the opportunity records. After all, if you follow our suggestion, you will have made source campaign a required field on your opportunity records. We suggest that you do two things here. First, train your sales team on the importance of selecting the right campaign record when they create a new opportunity. Second, automate the completion of the source campaign field as much as possible so sales people do not have to make the decision of which campaign lead to the opportunity. Of course, there is inherent imperfection here since Microsoft CRM only allows one campaign per opportunity and it is often a mixture of campaigns that influence a sale.

How we set source campaign at ClickDimensions Internally we automate the process of setting the source campaign as much as possible. Let’s look at a real example. Earlier this year we published the Microsoft CRM Marketing Idea eBook. The campaign used a variety of methods to drive people to a landing page for the eBook. That landing page contained a ClickDimensions web form that the visitor had to complete to get a copy of the eBook. By having the eBook campaign record associated with the

ClickDimensions web form (highlighted below) on our ClickDimensions landing page all leads generated from the landing page automatically were created with the eBook source campaign.

As these eBook campaign leads are converted to opportunity records in CRM the source campaign is copied over to the opportunity record automatically so no manual entry is required from our sales people. Further, since the landing page was built using the ClickDimensions solution we were also able to link it to the eBook campaign so that we could easily see all visits to the landing pages as well as form submissions (i.e. conversions). This gives us a very tight accounting of the traffic to the page, the conversions the effectiveness and the ROI.

Below is a depiction of how the source campaign flows from the landing page and web form to the lead and then on to the opportunity. No manual entry is required and it is then easy to use CRM charts and reports to gauge the ROI and effectiveness of your campaign.

Also, since we can link the landing page to the campaign record we can easily see the total number of visits we have driven to it as well as the total number of people who have submitted the form (i.e. converted). You can see this on the following screen capture. By dividing the number of visits by the number of people who submitted the form (i.e. converted) we arrive at the conversion rate for the landing page.

Being able to calculate the conversion rate is helpful as it gives us an indicator of how compelling the call to action is on the landing page. If people click through to the landing page and tend to leave without converting then something about our landing page is not working for us. It is important to note that, if you use online advertising, tracking conversion rate in you advertising platform is critical to understanding which ads, keywords and campaigns are leading to conversions. For more on that refer to our blog post on using Google AdWords conversion tracking with ClickDimensions web forms.

Determining lead source One of the things we look at closely is what sources are responsible for generating leads. Earlier we mentioned that our eBook campaign took advantage of a variety of sources including LinkedIn, Facebook, Google, Bing, etc. In the example of a source like LinkedIn we could receive organic traffic from a free posting (i.e. mention in a LinkedIn group discussion) and we could also receive traffic from a paid LinkedIn ad.

So, how do we know where our leads are coming from? Since we are using our own solution and its web tracking capabilities we can see which site referred us traffic as well as how the visitor entered from the site. The ClickDimensions solution captures the entry page of the visit which can tell us the specific ad that the visitor came from (image above on right). We’re also capturing the referring host which is the site the visitor came from (image above on left). So, if the visitor came from LinkedIn we will see linkedin.com as the referring host and, if the visitor came from a linked in ad we’ll still see linked.com as the referring host but, if we make our ad URL unique with a source parameter, will see that parameter we in the entry page field. For more details on how to track which of your ads is driving traffic to your site take a look at this blog post on ad tracking and this one on monitoring your paid search ads.

The marketing performance dashboard With everything we have talked about in this quick guide you can create dashboards to reflect the performance of your marketing campaigns. In the example below we have created a CRM dashboard with four charts including the number of forms submitted on the web site per day, the lead generation rate by month, the number of conversions (form submissions) for a specific campaign and the revenue generated by campaign.

This dashboard tells us how things are working and when it is time to start priming the lead funnel again (hint, the answer is always). Once you really start to measure all this you’ll find it is a bit addictive. Seeing increasing ROI and lead generation rates will spark your creativity to plan and launch you next great campaign.

Next steps Hopefully this has given you some ideas about how to set up your Microsoft CRM to better measure your marketing campaigns. If you are interested in learning more about marketing with Microsoft CRM there are a few ways we can help:

- Download our Marketing with Microsoft CRM Idea eBook - Subscribe to our monthly Microsoft CRM Marketing newsletter - Read our Microsoft CRM Marketing Blog - Watch a live or recorded ClickDimensions webinar - Contact us to learn more about the ClickDimensions marketing automation solution for Microsoft Dynamics CRM

And, watch for more guides and eBooks right on our web site at http://www.clickdimensions.com/