Pipeline Marketing Blog

The Dangers of a Marketing Team Disconnected from Revenue

By Alexis Getscher
May 9, 2017
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Typically, marketers execute a campaign, measure its success, and then use that data to create a plan for the future. This process is a continuous optimization loop, but problems arise when each of these steps is disconnected from the other, with all of them optimizing for different success metrics.

There are excellent marketing execution tools and those tools often come with analytics to track performance. However, those performance metrics are channel specific and segmented from other campaigns. Performance metrics from marketing execution tools are also disconnected from business performance metrics.

To solve this issue, the organization should align planning, execution and measurement to a single, unifying metric-- Revenue.

aligning marketing teams to revenue.jpg

How Do Marketer’s Prove Revenue Impact?

In today’s marketing org, practitioner goals are too often disconnected from CMO goals. Practitioners, like the Paid Media Manager or the Email Marketing Manager, report on engagement metrics, while the CMO is expected to present the CEO with business metrics like pipeline and revenue.

The CMO is then tasked with proving business value based on engagement metrics. Those metrics, along with various other engagement numbers, are indicators of potential revenue, but they are not revenue.

So, how do you turn click-through-rate and lead volume into a dollar value?

In order for Marketing to get the credit it deserves, it has to be able to prove true business value and that starts with reporting on revenue.

A marketing attribution solution connects marketing efforts to sales data. A marketing attribution model places a dollar value on key conversions (defined by you) that moved the lead through the funnel to becoming a customer.

Implementing attribution places the marketing team on a level playing field with Sales. It means they can prove they are adding value to the business, not just creating engagement with the business.

Additionally, connecting Marketing to revenue aligns the entire organization around a single, powerful metric. As we’ve reported in the past, marketers who achieve 2x ROI are more than twice as likely to report a strong alignment with Sales.

The company as a whole performs better when teams are aligned and optimizing for the same metrics.

Expected Results vs Actual Outcomes

When marketers are optimizing for top-of-the-funnel metrics it’s easy to lose track of marketing’s ultimate goal: to create engagement that drives customers. If you stop measuring at engagement, it may seem like your team is successfully executing, but ultimately your efforts could be missing the mark.

For example, say your team ran a paid media campaign on LinkedIn that received 1,000 impressions and stayed under budget. On the surface that seems like a success.

However, when tracking to bottom-of-funnel (BOFU) metrics, you realize none of those clicks ever converted into customers. So, although you created engagement and stayed under budget, your efforts generated zero ROI for the company.

Optimizing for top-of-funnel (TOFU) metrics creates an atmosphere where marketers are unable to see early warning signs that the team is off track. Email open rates could be high, blog posts may have tons of views/shares, and a bunch of prospects may have signed up and attended your event. Individually, each of these campaigns is producing positive channel-specific metrics that would imply success.

But once it comes time to do quarterly reporting, you may realize that the marketing team didn’t engage enough quality leads and the company missed revenue goals for the quarter. Sales will blame marketing for not delivering quality prospects, marketing will blame sales for low close rates.

This is why organizations need to rely on a single source of truth.

As marketers start to optimize for revenue, they begin to align themselves with greater corporate goals. Alignment with those goals unifies the organization and allows teams to recognize and adjust if they fall off track.

Members across teams are on the same page, working toward the same goal.

Conclusion

When practitioners are optimizing for channel-specific metrics, their priorities, goals and metrics for success are segmented from one another and from the organization as a whole.

That segmentation opens the door to missed goals and the inability to prove business value, which could mean less budget and poor overall company performance.

To unify the organization, Marketers must plan, execute and measure based on revenue, just like the Sales team and the C-Suite.

For more on marketing performance management, get the guide below. 

The CMO's Guide To Marketing Performance Management  Evaluate Your MPM Process And Improve Revenue Generation.  Download Now

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