Who is responsible for your company’s bottom line? In most B2B and B2C companies, sales is considered the “cow that lays the golden eggs,” while marketing is often viewed as the “money machine.” As a result, sales holds most of the “political power” at any organizational level in the company. Marketing is often viewed as a “lower hand” in the company. Many companies favor sales—they attend all weekly meetings, while no one from marketing attends. The directors of such companies think of marketing as an expense, not a strategic asset for business growth. As one marketing expert said at a recent CMO Conference in the United States, “Our department is seen by senior executives as the ones who create ‘flashy’ sales pitches.” According to Phil Fernandez, president and CEO of marketing automation firm Marketo (www.marketo.com), it’s clear that marketing is suffering from a crisis of credibility. So what can marketers do to be seen as part of the profit machine, not just a cost to the company?
1. Forecast outcomes, not expenses
Marketers must forecast and calculate the number of potential customers, sales and profits generated with great confidence. Sales and Marketing must sit together at the profit table to forecast the next quarter and the next year. Marketing's role is to forecast how many qualified prospects will enter the marketing funnel, how many will pass through the funnel and how many will become customers at a given point in the future.
2. Create essential business cases for spending
Marketing also needs to create a hard business case for the resources needed to deliver on its forecasts. This requires marketing to know what it will take—in time, money, and effort—to acquire leads and nurture them until they are ready to talk to sales. Marketers who use this kind of rigorous approach to deciding on marketing spend will also be able to justify and defend their spending. If the CEO wants to cut 10% in marketing costs, the CMO can show exactly what impact that will have on the company’s revenue next quarter.
3. Use marketing metrics that actually matter to the CEO and CFO
Soft measures like brand awareness, impressions, organic search rankings, satisfaction, and quality are important, but they are only truly useful when linked to a quantifiable approach to “hard” measures like sales, revenue, and profits. The Marketing Dashboard must measure and measure the impact of all marketing activities, whether “hard” or “soft.” However, it is also important to maintain all internal measures that are essential to Marketing. When speaking to company executives, marketers should do their best to articulate how changes in upstream measures will impact downstream measures that matter to the entire company. By speaking the same qualitative language as CEOs and CFOs, CMOs will better communicate the impact and value of Marketing.
4. Use standard methods and best practices
There are two main benefits of using a practical and documented approach.
First, it provides a common language for consistent communication within and across departments. Consistency is essential for reliable relationships and forecasting, as well as for accurate comparisons of value between prospects and opportunities. Second, a best-practice methodology improves performance by helping individual marketers act like true experts, regardless of their experience with any given tactic or channel. Marketing has long been viewed as an art, not a science. Implementing a consistent, practical marketing methodology goes a long way toward changing that perception.
5. Implement marketing automation technology
Sales force automation (SFA) has become a no-brainer for most companies. It is estimated that 751,300 companies in the United States have implemented this technology. SFA solutions are a critical factor in linking the Sales department to the company’s bottom line. Without SFA, sales managers will have a harder time meeting forecasts and effectively implementing various sales methodologies. Unfortunately, most marketers find it almost impossible to implement marketing automation technology to support their actions. The problem is that traditional marketing solutions are expensive, requiring immediate investments and requiring significant IT resources to implement and maintain the technology.
Fortunately, with the proliferation of on-demand software, there are now solutions that fit the realities of marketing budgets and IT support. These solutions provide the automation and support Marketing needs to predict results, plan spend, measure impact, and improve action.
Ultimately, Marketing can and must earn a seat at the corporate profit table. Earning this seat requires the same actions as other departments that already have that seat:
– It requires making forecasts, planning expenditures and evaluating results using appropriate methods such as cash flow, revenue, etc.
– It requires implementing best-practice learning – powered by marketing automation software – to help build consistent communications and improve actions.
– And since better accountability is needed for better actions, it requires Marketing to deliver on its promise by delivering more and better leads to the company's sales team.
Only then will Marketing be seen as an equal partner with Sales in efforts to increase the company's profitability.
According to Bwportal
