Everyone in marketing recognises this to be true, but few follow through with the responsibility it places on us
I have relied on this quotation on more than one occasion to help protect mine or a client’s marketing budget with varying degrees of success. In each instance, my success came down to how effectively I could demonstrate the value of the activity produced to date.
B2B marketing teams must be able to measure the things that lead to sales, just as sales must understand they have a responsibility to marketing to provide valuable insight and genuine feedback on leads.
The most obvious (and I would suggest minimum) metrics that all B2B marketing functions should publish are:
The number of leads generated from marketing activity
The number of opportunities generated from marketing activity and
The number of revenue generated from marketing activity
Now I know this can be difficult for some businesses. Different lead times and buying cycles mean that a sale today can be from lead two years ago and reporting is rarely perfect at first attempt. But we can’t let these challenges become excuses not measure. We can all get bogged down in figures and statistics but we have to rely on some metrics everyone buys into to demonstrate the value being delivered. The process can crafted over time with input from both sales and marketing.
While this collaboration to report with sales is going on, marketing can get to work on benchmarking how many interactions or reach £1 can buy. This doesn’t measure the things that lead to sales, but does indicate the value for money on the volume of the activity being delivered.
I have done this for an entire marketing budget in the past by taking a base year of activity and budget to cost a primary lead, interaction and reach. It works something like this.
Let’s say you are planning to attend a major trade show that will cost £100k, excluding travel, subsistence and time. The event will have 10k visitors, of which you expect 500 to visit your stand over 3 days.
£100k ÷ 10k visitors is a potential reach of 100 from a £1 unit cost.
£100k ÷ 500 visitors is a potential interaction of 2.5 from a £1 unit cost
We can now bench mark this event against all activity in the previous period/year. Let’s say all the activity last year including direct mail responses, web visits over 3 minutes, social media posts and PR cost £600k. Let’s also say it generated reach of 900 and 2.8 interactions for £1 cost respectively, we know the event is in the ball park and is worth investing in.
I hope that helps. Of course the one thing that all B2B marketers know that the text books will never tell you. You only have to generate one lead per year that generates a big enough deal for you to have no trouble securing your budget next year. The trouble is, you have to rely on the sales team to admit it came from marketing. Infographic
Good post - I think your last line talks volumes in regard to the perception of value of and the issues faced by the marketing function.
ReplyDeleteThe most succesful companies I have worked in have not split the leader role of both functions. There has been a 'Sales and Marketing Director' who has driven downwards a mindset which links both functions even though cultures are very different. This approach removes silo thinking. However the trend has been for the head of each to be separate probably due to the lack of individuals who can wear that single hat.
It was explained to me in rugby terms - forwards versus the brill cream boys the backs - teams which remove this separation are the ones who win and win big - I am sure Sir Clive would know all about that and was Matt Dawson's unseen contribution [there were better scrum halfs at the time].
I have been always interested in the dynamic between marketing and sales throughout my career and feel that it is a relationship which is most neglected and yet can cause more disfunction than most things.
Here is to a reversal of trend - and I would like to see more harmony and support for marketing from sales and vice versa when both disciplines have to pitch to the common foe - the beans counters and the commercial hats of any company.
Or is it a case of 'the land of lost content'?
Excellent point Richard.
ReplyDeleteMost B2B sales and marketing organisations don’t meet until they get to board level under the Sales and Marketing Director. This is where, from experience, much of the conflict in organisations exists as middle managers own agendas clash. The more these organisations are integrated, the more effective they can be, that why so many business development organisations are organised in a regional or channel structure.
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