Episode 253 / Mikko Vesterinen / Valmet / Senior Manager, Digital & Data-Driven Marketing
Return on Marketing Investment: Proving Value through Tangible Metrics and Intangible Insights
Mikko Vesterinen, Senior Manager of Digital & Data-Driven Marketing at Valmet, has picked the return on marketing investment as his Shiny New Object.
On the podcast, he shares the importance of looking at the right metrics and tells us why networking is so important to hear the real “sound” of the data (which can be too silent otherwise).
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Transcript
The following gives you a good idea of what was said, but it’s not 100% accurate.
Mikko Vesterinen 0:00
Data can also be very silent, you actually need to network with customers and other people in the company in order to be a good data driven marketer.
Tom Ollerton 0:14
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Hello, and welcome to the shiny new object podcast. My name is Tom Ollerton. I'm the founder of the creative effectiveness, ad tech platform automated creative and this is a podcast about the future of data driven marketing every week or so I have the absolute pleasure of interviewing one of our industry's leaders and this week is no different. I'm on a call with Mikko Vesterinen who is senior manager digital and data driven marketing at Valmet. Mikko, for anyone who doesn't know who you are and what you do. Can you give us a bit of background?
Mikko Vesterinen 1:56
Hi, Tom, thanks for having me. Yeah, I'm, like you said, I do digital marketing and data driven marketing at Valmet, which is an industrial equipment manufacturer for process technologies, which is very B2B driven, driven company. But before that, I was also in a more of an industrial setting at Neste, running the marketing technologies there. And also, before that, I was actually in a whole different business, I was, I did sports, sports, training, sports. Education. And actually, before that, I was even doing some I sold, or bought from consumers, I bought bought jewelry, gold and silver and sold it further. And then even before that I was working in military. So I have kind of the rich background of different kinds of jobs. But now I think I've landed in a good position where I am now doing the data driven marketing at Valmet.
Tom Ollerton 3:08
Wow, man, is quite the career. I don't think we've had anyone from the military, maybe one or two, certainly no one is trading in gold and silver, and then ended up in b2b marketing. So congratulations on a wiggly path to this point. So in that career, and what books have you read? Is there a particular title that really changed the way that you think or a book that you recommend most often when it comes to this end of the industry?
Mikko Vesterinen 3:31
The book that has most kind of shaped my idea about marketing is the Thinking Fast and Slow from Daniel Kahneman. And I think many of your listeners also know that book. And that's kind of a very, like, like, like a book that has many other related related related books that are for related to psychology, and also about behavioral science. And I think that one thing about that book is that it kind of grasps the human thinking so well, that you kind of start to think that in your practice, as well. So what how do people actually make the decisions that they they need to be making. But of course, it also gives you the responsibility of using the advice sensibly. So I think that at least usually with consumers, some companies might start utilizing those kind of behavioral science kind of tips and tricks in a wrong way. And they also work in b2b Surely, but I think you need to also use that advice sensibly. But that is some one book that I would recommend for everybody to read, working at marketing.
Tom Ollerton 4:52
So if someone's not a book reader, and they still want they get the value and the inspiration from that book, what would you say are the key points that a data driven marketer can take away from Thinking Fast and Slow?
Mikko Vesterinen 5:03
Yeah, well, I would say that at least one kind of big topic of the book is that people usually make decisions pretty quickly. And when they have, when they are bombarded with different kind of messages, they need to be able to make the decisions quickly, and they do not stop and think about all the decisions that they're making or evaluate all the decisions and data that they come by when they move, move during the day and, and watch TV, listen to radio or or any other medium. So they are vulnerable to many cues that you are giving giving to them, which you can also utilize. But then like said, they will recognize if you start wrong doing this this understanding of behavioral science, so also need to be very responsible for that. I think that's the main point of the book.
Tom Ollerton 6:07
Could you give me an example of that? So I get the theory, but on a day to day data driven marketing b2b scenario, how would you take advantage of that advice in a way that someone listening to this podcast? could think? Alright, yeah, I might try that, or, avoid doing that thing?
Mikko Vesterinen 6:21
Yeah, well, I think that there are there are so many, many different kinds of things that you could kind of you could use in marketing. That would be based on behavioral science. But I think that one thing would be kind of this risk awareness that you would kind of emphasize the risks inherent if you're not going to take an action for something. So you could use that in your content when you're when you're generating content, but you could also test kind of pointing towards authority, so using like, like doctors, like you would sell toothpaste, so so like, dentists would be a good authority. And they're saying that if you don't use this toothpaste, then your kind of teeth won't be in so good condition. So that's, I think, one way of looking at things.
Tom Ollerton 7:24
So what a bit of advice would you give to data driven marketers always ask guests like, what was that kind of one silver bullet bit of advice that you think has been most powerful, and you've heard it that you pass on most often?
Mikko Vesterinen 7:34
Well, I think that when I started or when I got very interested in data, I actually first worked as a, as a market analyst, and then I was also doing some data analysis tasks. So I'm kind of I'm kind of coming from that realm. So I was thinking that it's a data that speaks the language and then if the more I can read it, the more I can analyze, the better I understand the business and the better I understand my customers, and, and so on. And that's to some degree that is true, but then data can also be very silent in the sense that you don't see those such like subtle cues that are that are coming from from customers or you can kind of reach the this information by talking with people that are working on the customer from like sales and sometimes product management and people people from there. So you need to kind of be aware that that you do not only be on the kind of behind the walls of data and technologies, but you actually need to network with customers and other people in the company in order in order to be a good data driven marketer to understand also the information that is not inherent in the data but is something that is not documented.
Tom Ollerton 9:04
So how do you do them? And what is your approach for understanding that the humaneness behind the data, like that expression? Data can be very silent, whereas the sound where do you go and listen?
Mikko Vesterinen 9:13
Well, usually, well, I gotta say that when I when I started in the company, where I work, where I work now, I started meeting people. So I tried to get to know people in order to very quickly understand how we how are companies working, and where are the pain points where and what are the pain points from the customer point of view from the research and development point of view, sales point of view, so that you only get that by talking with people and you need to set the set that kind of schedule to yourself kind of you need to do the work that you have on your table but then you need to have some time for for networking and of course it makes It takes a while, but at some point, you will see that it's also makes your life in the company easy in the sense that you don't need to search for information, but the information finds you at some point when people know who you are, and, and so on. So it also helps with the career I think.
Tom Ollerton 10:19
So how do you do that from a practical perspective? So you use the word networking, other people might say, you know, just talking to your customers, like how would you ask those questions in a way that doesn't make people get a bit too clammed up and say the wrong thing? So for example, if I sat down with my customers and said, I said, what's keeping you up at night? What stresses you out? Like? It'd be an odd thing to say, right? So there's a softness and there's a skill when it comes to talking to customers to understand what is driving behavior and beliefs behind the ones and zeros? So how do you approach that? How do you conduct those conversations in a way that you get valuable qualitative, back, essentially? ,
Mikko Vesterinen 10:56
One thing to approach this, or these kinds of conversation and actually kind of get you talking with people is to first understand what drives the person? Maybe not always the individual? Because you don't know the individual in the first place, later on yes, but first kind of what do you think is important for the for the person, what does the person want to talk about? So there's always like, customer would like to talk about their processes, what they kind of do for their customers. And because many times your customers, of course, also has customers and so on, so you understand their business as well, a little bit better. And then they are happy to talk about those kinds of things. So there is no brief texts of that you are getting that they are that the person you're talking to needs to give you some information that you are going to use for your own purposes, but you're kind of being open to discuss about the topics that are important for the person that you are networking with. And I think from there, you start to understand better that what the person wants to talk about. And there you can see that there comes those tips that this is something this is a pain point, this is important. And then you write down and then you ask that would it be okay we talk about these things in a later meeting at some later point or, or in a company, you go go to lunch, and then you bring out this more points kind of there. You don't need to set an agenda, always for pain points and those kinds of things, but you're kind of in a listening role.
Tom Ollerton 12:43
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So we're gonna talk now about your shiny new object, which is return on marketing investment. So can you tell me why that is your shiny objects? And specifically, what do you mean by that?
Mikko Vesterinen 13:31
Yeah, marketing measurement overall, I think it's a difficult thing because of the role of marketing in many places as a cost center. So you're measuring many times your minutes or measuring things that do not interest your stakeholders always. But I think that's also many times in business to business companies, where marketing is many times thought as a cost center, but when you if you can be more tangible, if you can connect your impact more closely to those things that you hear, that are important for the whole company and that others are pounding, they're kind of what others are measuring as well, then you're able to increase the credibility. So return on marketing investments, either investment is a one good measure to do that. And it is, by kind of the formula for return on marketing investment is the marketing impact minus costs divided by costs. So meaning that you are kind of calculating that how much impact your marketing is making when you take into account the costs as well? Or kind of take take those out from the equation. And then the marketing impact itself is usually the sales margin growth minus the organic sales margin growth. So what actually happened, minus what would have happened in a situation where there weren't any intervention. So marketing action, so you need to, of course, understand the attribution modeling also a little bit there. And, and maybe even the kind of how you understand also that you need to have some kind of baseline. So you need to calculate also try to calculate the baseline, so how much you would make money without the campaigning or, or the activity, but basically, it's, it's a relational figure, it's a percentage of how much your marketing just created money from the investment that you put, put in. So it's a way of showing or being accountable for what you just just did. And for the marketing actions, as well. And I think that's a way of increasing the credibility of marketing. In in its state, or among its stakeholders.
Tom Ollerton 16:20
So thanks for sharing top line calculations there for proving the value of marketing, where does the kind of soft stuff come into it? I mean, we're talking from a b2b perspective. So you're talking about number of sales minus the sales you're gonna get anyway, that gives you your kind of incremental growth. But what what is your view when it comes to the brand building end of it? Yes, it's a data driven marketing show. And we talk about conversion a lot. But actually, when you are reporting back to the C suite, or the shareholders, stakeholders, how do you start to quantify the value in the growth of the brand itself? Because in a b2b scenario, the sales cycle is very long, and actually brand and trust and relevance and positioning is even more important than B2C. So how do you track that? And how do you report back in a way that's meaningful to the organization?
Mikko Vesterinen 17:12
Yeah, that's a good question. Because I've seen that that's not so many. That's, that's not so often asked from from the non marketing executives, that what is the effect of your brand marketing, awareness, marketing, but more of these conversion, marketing or the kind of what how will your marketing affects the bottom line. But it's, I think it's very important also to understand that it's, even though things would lead to increases in the financial bottom line, then you still need to think that there are ways of effecting that, which are very hard to calculate, but you still need to do and that's kind of this awareness of brand building, side of things. One way of doing that is, of course, trying to calculate the share of voice that you have in your main mediums. So understanding that how much your competitors are kind of utilizing the lane or getting Lane from the from your attention, attention, or the lane from your customers compared to you. And that's something that you kind of need to know that if you're only concentrating on the tactical level, which is usually easier to calculate, then you might be missing the point that you are not visible anywhere. So So then it might hurt your new customer acquisition. And of course, image, an image is a very kind of hard thing, too. If you have diluted it, it's hard to get it back as well.
Tom Ollerton 18:46
So what are the common mistakes when it comes to measurement that you have seen people make in your career that you're always keen to avoid?
Mikko Vesterinen 18:55
Yeah, I think that one is this kind of analysis paralysis thing that you're trying to measure everything because there's so many metrics that you can take from social media from web and other other channels. So you're trying to measure everything I think you need to kind of for your strategy from kind of downwards from a strategy you need to derive the main metrics or key performance indicators if you may. And then think that what are the most model the best metrics there and then you need to also divide them in the strategic ones which are like return on marketing investment, but don't but also go into to the tactical level, which are like engagement, social media engagements, impressions, and then you are trying to with these different level level metrics, you're kind of trying to bound them, bind them to each other. So you understand that if I make this much improvement in my tactical metrics, then I'm going to affect the strategic CIC metrics and biggest return on marketing investments doesn't very effectively telling you how you should do things. It tells that whether it's effective, but these tactical metrics are actionable. So I think that's important to understand. What are they telling you? And what should you do so that they actually lead your work. And I think the work is then pretty easy when you are using the right metrics, and you understand what works and what's not working.
Tom Ollerton 20:35
So in a b2b environment, how do you work out? What are the strategic and tactical metrics or KPIs? So you know, you've got a business that is present on a few channels in a b2b website, LinkedIn, search, paid search, social, you know, all the rest of it? And yeah, there's a ton of different metrics you can have, you know, click through rates, you know, new followers on LinkedIn, all this stuff that we know very well, how do you define what is worth paying attention to from from that metric? Because you could have a spreadsheet with 150 different data points on it, but you've got to your point, you have to act on it. So how do you work out the ones that are important to a business? What are the questions to ask?
Mikko Vesterinen 21:14
I think that it first starts with what what you will get from the channel itself, the channels that you are using, and which channels are those that your customers are using as well. So you understand that where should you be visible? And then understanding that which what is kind of possible there? And how can you combine? So technically, how do you combine these channels? To the strategic metrics? So is it possible to understand for example, the conversion all the way from the search ad? From someone leaving you a quotation? And then you're saying yes or no. So going going down to the funnel? And if it's possible, then you are using the metrics that are most the best in telling that are indicating that from the beginning. But you of course, don't always know that in the first place. For example, if you're new to the position, you are you have hypothesis. So you're, then your hypothesis is that you're like Google ads, click through rate or your number of impressions that you're getting in your use of video say or some something else or views. So if that is that is affecting, and then you start looking when you have enough data, then you start looking at this data. Was this really true? Did it affect and if it didn't, did not, then you are trying to utilize other metrics and do the same thing?
Tom Ollerton 22:52
Mikko, unfortunately, we've run out of time. I could talk about this all day. It's so fascinating to hear your very granular analysis and advice about what b2b marketers should be doing because as much as I do a podcast, I also market Automated Creative. So it's been an education for me. Thank you. So if anyone wants to get in touch with you, where's the best place to do it? And what makes a message that you will actually respond to?
Mikko Vesterinen 23:14
Yeah, well, most likely LinkedIn. I think that's a bit better. This channel, I tend to look that pretty pretty often. But please don't try to sell me anything because I will not have a budget for that. Most likely. But yeah, that I think that's the that's the best one.
Tom Ollerton 23:32
Brilliant, Mikko, thank you so much for your time. Yeah.
Mikko Vesterinen 23:34
Hey, thank you, Tom.
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