The days of marketing as a necessary cost center are numbered. Today, marketers must demonstrate how marketing will contribute to the company’s top-line revenue growth, or be prepared to change careers.
CMOs and Marketing VPs need to step up and take responsibility for revenue production. That means coming to the table with a revenue marketing forecast and aligning tightly with sales to ensure the revenue goal is met. Some companies are even assigning quotas to marketing and compensating marketing executives on meeting those quotas.
As a marketer, instead of looking at the negatives of this trend, you can approach it as an opportunity to finally achieve credibility within your company, especially within the executive suite. Showing a return on investment is the entrée to a strategic place at the executive table.
The big question is how to transition from being demand generation-focused to becoming a revenue-generating organization. While there is no cookie-cutter solution, there are proven best practices being used by savvy marketers to drive successful revenue-focused marketing.
1. Start at the top to create a revenue-generation marketing plan
Look at your company’s overall business plan, including the revenue goal. Your marketing plan should align around the business priorities and goals for your company as set out in the company plan.
Then determine the percentage of the overall revenue goal that marketing should contribute to. While the percentage will vary by industry, it’s not uncommon to see targets starting at 30% and up. Based on that target, you can set performance goals for the demand waterfall including the number of visitors, leads, opportunities, and closed deals you need to make your revenue quota.
2. Get your marketing analytics in place
Many marketing departments don’t know how to focus on revenue as a goal because they don’t understand how they can measure it. You must have the proper marketing technology in place where you can track a lead from the moment it comes in all the way through the buying cycle when that buyer purchases, renews, or cancels. A connected view of the buyer lifecycle allows you to demonstrate marketing’s contribution to revenue.
The problem is that many marketers have disjointed systems or lack the right marketing solutions altogether, which limits their ability to track performance across the buying cycle; only 20% of large companies use marketing automation today.
Marketing technology will be imperative to connect the dots across the buyer’s journey and measure key performance indicators that support revenue generation.
3. Speak the same language as sales
Becoming a revenue-generating marketing organization means working much more closely with sales than in the past. To get their attention, you need to speak their language. When you talk about open rates, lead generation, and automated nurture campaigns, sales hears “marketing speak”. Don’t talk about leads. Talk about qualified opportunities and closed business.
As marketing organizations transition into revenue generation, the shift to speaking the same language will start happening organically. Planning, forecasting, pipeline, bookings, and revenue become the common ground for the two departments to work together
4. Maintain the relationship with prospects and buyers
It’s no longer acceptable to hand off the lead or opportunity to sales and walk way. Marketing has to take responsibility for working with sales to find ways to help move the buying process along. When marketing hands off the opportunity, it shouldn’t lose the relationship. It needs to maintain the connection throughout the buyer’s journey.
Once a lead is qualified and converted into an opportunity, marketing should create pipeline acceleration programs to help sales close deals. For instance, marketing could create an individualized program for opportunities that have been stuck for 30 days or more to help move them forward.
5. Define service level agreements
Part of committing to a partnership is agreeing on how you’ll work together. Service level agreements can help you better define your working relationship with sales. For example, you might decide that marketing will only provide leads that meet certain criteria as an opportunity, then once that opportunity is handed to sales, sales must make contact within 48 hours or else the opportunity reverts to inside sales.
Agree on when an opportunity will be handed off, how long sales will hold it, and what happens when the required action does not occur. The agreement needs to be ratified at the most senior levels within sales and marketing to ensure buy-in and commitment from the top down.
Nearly every marketing executive is feeling the pressure to show a financial return. But signing up for a revenue number should be viewed as a positive – it’s an opportunity to expand marketing’s influence and justify a larger budget. As you build your revenue engine, you can scale your success, grow marketing’s contribution to the bottom line, and make that seat at the executive table permanent.
This article was inspired by my Moneyball for Marketing podcast with Kerry Langstaff, VP of Marketing at Xignite.
Originally published on MarketingProfs
Glenn Gow is an expert in marketing performance, Coach, Board Advisor, Author, Speaker, Podcast Host and Founder & Advisor of Crimson Marketing. Follow me on Twitter, LinkedIn, Google+. To get a free copy of Crimson’s One-Page Marketing Metrics Funnel, visit here.