In Earn a Seat at the Revenue Table – Part 1, I asked how can marketers take more control over the revenue process, build the respect of their organizational peers, and earn a seat at the revenue table.
The key is to act more like Sales (at least when it comes to driving revenue). Sales and revenue just seem to go together. Some people even use the words as synonyms (e.g. “last quarter’s sales grew 10%”). Sales does not suffer from the same credibility problems as marketing, and despite their sometimes lavish expense accounts, nobody thinks of Sales as the group that just wines and dines clients. Assuming they deliver on their plans, Sales is the group with the most respect and power in the organization.
By taking the following actions from the Sales playbook, Marketing can become as closely tied to revenue as Sales.
Forecast results, not spending
Marketers must forecast and predict leads, pipeline, and revenue with confidence. This critical task is too important to be handled exclusively by Sales. Instead, Sales and Marketing must sit together at the revenue table to contribute to next quarter’s and next year’s forecast. Marketing’s role is to predict how many new qualified leads will enter the marketing funnel, how those leads will move through the funnel, and how many of them will become “sales-ready” in any given quarter. In turn, Sales must be able to forecast how many of those deals they will close and convert to revenue.
Make hard business cases for spending
With the revenue forecast in place, Marketing must make a hard business case for the resources they need to deliver on those forecasts. This requires knowing what it takes – in money, time, and effort – to acquire qualified leads and nurture those leads until they are ready to talk with sales. Marketers that use this type of rigorous methodology to determine marketing spending are also able to make justify and defend their budgets. If the CEO wants to cut marketing spending by 10%, the CMO can specify exactly what impact that will have on next quarter’s revenue. (The reverse is true as well. By understanding the marginal return of incremental spending, the CMO can justify a larger budget and know exactly where to put the extra funds.)
Use marketing metrics that matter to the CEO and CFO
Soft metrics like brand awareness, impressions, organic search rankings, satisfaction, and quality are all important – but only to the extent that they eventually connect in a quantifiable way to hard metrics like pipeline, revenue, and profit. The Marketing dashboard must measure the impact off all marketing activities, whether hard or soft. But keep all but the most critical metrics internal to Marketing. When talking with other executives, make every effort to demonstrate how changes in soft upstream metrics impact hard downstream metrics that matter to the entire organization. By speaking the same quantitative language as the CEO and CFO, CMOs will better communicate Marketing’s value and impact. (As more channels become targetable and measurable, and as marketing spend shifts to those channels, marketers will find it easier to measure marketing’s impact using hard analytics, rather than guesses and estimates.)
Employ standardized best-practice methodologies
Many books have been written on sales methodologies, from Solution Selling to Miller Heiman to SPIN Selling. Marketing needs the same kind of rigorous process. There are two main benefits to using a documented, best-practice methodology. First, it provides a common language for consistent communication inside and outside the department. Consistency is critical to ensure reliable rollups and forecasts, and for accurate comparisons of value between different leads and opportunities. Second, a best-practice methodology improves performance by helping every marketer perform more like the top marketers – regardless of their experience with any given tactic or channel. For too long marketing has been seen as an art and not a science. Implementing a consistent best-practice marketing methodology will go a long way towards changing that perception.
Deploy B2B marketing automation technology
Sales Force Automation technology has become a “no-brainer” for most companies (estimates for penetration in the US vary from about 50 to 75%). The SFA solution is a key enabler of the activities that tie Sales to revenue; without SFA, sales executives would find it much harder to roll-up forecasts and implement best practice methodologies. Unfortunately, most marketers have found it impossible to implement marketing automation technology to support their activities and funnel. The problem is that traditional marketing solutions are expensive, require up-front capital investment (something marketers don’t have), and need lots of IT resources to implement and maintain (another resource marketers don’t have). Fortunately, with the rise of on-demand software there are now solutions that work with realities of today’s marketing budgets and IT support (I’m partial to Marketo, of course). These solutions provide the automation and support that Marketing needs to predict results, plan spending, measure impact, and improve performance.
Marketing can (and must) earn a seat at the revenue table. Earning a seat requires acting like other departments which already have a seat. It requires making forecasts, planning spending, and measuring results using hard business metrics like pipeline, revenue, and cash flow. It requires implementing a best-practice methodology – supported by marketing automation software – that delivers consistent communication and improves performance. And, since better accountability necessitates better performance, it requires that Marketing delivers on its promises by delivering more, better leads to sales. Only then will Marketing be seen as an equal partner with Sales in the effort to deliver revenue for their organization.