Our research shows that marketing can benefit greatly by connecting its program spend to sales headcount -- positioning it against the critical tasks of demand creation, reputation and sales enablement.
Wilton, CT (PRWEB) October 28, 2009
"No man is an island," said English poet John Donne. Nowadays, he may have added: "And your marketing organization better not be either." With budgets squeezed tighter than ever before, a new study from b-to-b sales and marketing research and advisory services leader SiriusDecisions shows that marketing must defend its spend by clearly documenting value provided to other critical functions.
Though less common than five years ago, SiriusDecisions reports that it still hears b-to-b marketing executives describe major struggles to demonstrate the value of their function to the business as a whole. In organizations where the sales/marketing relationship remains fractured, one of the major culprits is the lack of a measurement framework that tightly links the functions together.
"Marketing must establish and link metrics to the measurements that senior management lives and dies by," notes Alden Cushman, SiriusDecisions' research director and benchmarking analyst. "Our research shows that marketing can benefit greatly by connecting its program spend to sales headcount -- positioning it against the critical tasks of demand creation, reputation and sales enablement."
Mr. Cushman continues, "If your current marketing measurement practices haven't included an initial benchmark and ongoing tracking in these areas, our bet is that you are frequently on the budgetary firing line." Based on its most recent research, SiriusDecisions has determined that there are four key sales-related metric areas that marketing leaders should be tracking.
These key areas include:
- Total program dollars per salesperson. Taking two of the four revenue bands studied as examples in this category: For companies under $100 million in annual revenue, the firm found that the average b-to-b organization spends roughly $30,000 annually; this grows to more than $50,000 annually for companies between $500 million and $1 billion in annual revenue.
- Program dollar breakdown by salesperson. SiriusDecisions has learned that it's critical not just to report program spend per salesperson at an aggregate level, but also to break it down into communications, field marketing and product marketing categories. Sales can then gain a clear picture of the variety of marketing efforts supporting the buying cycle.
- Sourced leads. Once established, proposed cuts to the marketing budget can now be projected directly to a reduced number of marketing-sourced sales pipeline opportunities. The firm has found that source percentages rise in the smaller revenue bands due to increased process and efficiency as the organization grows; they then steadily decline due to the fact that with a larger customer base, sales is able to generate more demand on its own.
- Influenced leads. SiriusDecisions research reveals that if marketing attempts to prove its value solely based on sourced leads, it's making a major mistake. First, the math doesn't work (e.g. trying to explain why you spend 100 percent of your budget on 23 percent of demand). Second, it causes marketing to fight with sales over every lead sourced, hurting the relationship. Best-in-class organizations have thus adopted the concept of measuring marketing influenced leads, or leads that were touched by marketing throughout the customer buying cycle even if they were sourced within sales.
"This influenced lead metric becomes particularly important in larger organizations, where marketing sources a lower percentage of the pipeline and increasingly focuses new, incremental funding on building and executing programs -- such as cross-sell and upsell initiatives -- designed to motivate and influence customers to spend more with them," explains Mr. Cushman, who concludes:
"Instances of other functions independently trumpeting marketing's value are rare, especially when it comes to sharing credit for their success. Thus, the task falls to marketing itself to link specific activities and investments to the success of other functions, especially sales."
For a more detailed look into the eye-opening results from this SiriusDecisions' marketing metrics study, contact Alden Cushman at acushman(at)siriusdecisions(dot)com.
SiriusDecisions is the world's leading source for business-to-business sales and marketing best-practice research and data. SiriusDecisions Executive Advisory Services, Consulting Services, Benchmark Assessment Services, Learning and Events provide senior-level executives with the sales and marketing operational intelligence required to maximize top line growth and performance. The unique combination of thought leadership, benchmark data, analytic tools, best practices and access to a peer and analyst network allow SiriusDecisions clients to quickly receive the critical insight they need to make decisions effectively. For more information about SiriusDecisions, headquartered in Wilton, CT, visit: http://www.siriusdecisions.com.