Very often marketers are disconnected from corporate goals.
They execute and optimize on an island, disconnected from revenue performance measurement and corporate planning.
The result is missing expectations or targets midway through the year, large discrepancies between budget and actual spending, and confusion on the best way forward when revenue generated falls short of expectations.
Clearly, marketing execution, measurement and planning need to be connected.
In this post we cover a marketing planning process to assist marketing leaders in navigating growth and align to revenue.
Every Marketing Planning Process Depends On Accurate Measurement
Measurement encompasses the right technology and reporting processes. Tracking, attribution, and budget/resource management are all necessary for measuring marketing in a way that feeds well into the planning process.
If tracking and attribution aren’t in place, for example, budgeting gets difficult during annual planning because marketing ROI is unknown.
Further, marketers can be left out of the planning process if leads and clicks are all they can report. Leaders can’t arrive to planning meetings with projections on clicks and pageviews, they must arrive with accurate revenue numbers.
Aligning marketing measurement to revenue requires quantifiable, revenue based metrics to build plans from.
Annual Planning For Marketing Leaders
With revenue performance data generated with proper attribution and tracking it’s time to use that data for strategic planning.
Planning often goes awry because too little time is dedicated to it, it gets delayed, resource requirements are unknown, current performance is unknown (bad marketing measurement), and targets are unknown.
In order to achieve the best results follow this marketing planning process:
Gather corporate, sales and product goals
Understand the current state of marketing performance. What’s marketing delivering? What can be scaled? What are current marketing priorities?
Review current marketing priorities and evaluate whether they align with corporate goals. Drop, keep, fix or create new activities/campaigns to better align with corporate goals.
Set marketing priorities, aligning them to corporate goals based on time-to-impact and team (sales, product, and customer success).
Turn marketing priorities into measurable, quantifiable targets/goals.
Create marketing plans for team, defining quarterly and monthly targets for revenue, SALs/Opps, and MQLs.
Assess budget and resource risks. Does marketing have enough budget? Are the right technologies in place? What assumptions are built into the plan?
Once implemented, monitor that marketing plan making sure targets are hit.
Assist sales, product, and success teams if targets are not being met (list of channels/tactics).
Let’s dive deeper into the latter half of the marketing planning process. This is an area where assumptions are made which greatly increases the amount of risk associated with the marketing plan.
Assessing budget and resource risks means examining the budget needed to hit marketing goals. With long sales cycles and numerous channels, it’s very difficult to understand the margin for error built into each projection or forecast.
Typical planning is done with aggregated data that doesn’t accurately represent the actual sales cycle for each channel. For example, opportunity coversion rates is calculated by averaging the conversion rate across multiple channels into a single conversion rate.
Unfortunately this doesn’t accurately predict revenue because there is a large margin of error in the projections. In other words, actual performance will fall within a wide range around the target. This means marketers are less sure about whether marketing's revenue target will be missed or hit during annual planning.
This affects the rest of the planning process as assumptions turn into tactics and strategy.
Why Revenue Planning Can't Be Based On Assumptions
Risks assessments create more uncertainty around budgeting. If revenue targets are often inaccurate or unreliable, then how does marketing know how much budget it really needs to reach those targets?
Overestimation of revenue is risky because it means overspending. Consistent overspending means revenue doesn’t cover costs.
This is understood by a simple sales management analogy. For example, a small company launches a product and overestimates the size of the addressable market.
The market is small. And the company hires too many sales reps and doesn’t sell enough product. This puts the company at risk of going out of business.
While this is a simplified example, it does show the importance of estimating revenue correctly. Spending decisions and strategies are determined based on estimated revenue.
Marketing Execution Under A Revenue Planning Framework
Once marketing execution of the plan is underway it’s time to monitor. When targets are missed it’s important to find a solution that puts the ship back on course.
The problem with making adjustments to an annual plan is the amount of work that goes into creating multiple projections based on marketing mix adjustments.
Marketers both want to be sure that a marketing mix adjustment will result in exceeding goals, and understand the different cost requirements to get there. The more marketing mix models generated the more time and effort needed to calculate accurate ROI and revenue forecasts.
To solve this problem marketing leaders can utilize a revenue planning solution that uses high quality tracking and attribution data for accurate projections. Not only does this solve the issue of decreasing the margin of error associated with marketing projections, marketers can explore the effects on revenue of different marketing mixes without hiring a team of data analysts.
This simplifies marketing execution by instilling confidence in marketing plans and marketing actions.
Marketing leaders can navigate the growth of their marketing team by following a workflow around measurement, planning and execution.
Always measure marketing performance with accuracy and depth. From there, planning and execution can succeed.
Scaling and hitting targets requires a strong foundation in data and analytics.
For a complete guide on marketing performance management, read the guide below.