Last week I attended Marketo’s User Conference and I had a great time being elbow-to-elbow with 600 other hard-core marketing folk (if you don’t know them, Marketo provides a marketing automation tool that helps marketers automate lead generation campaigns). One of the themes of the conference was around the transformation of marketing from a cost center to a revenue driver. Phil Fernandez, Marketo’s CEO had this to say in a recent blog post:
In today’s “buyer’s in control” market, traditional marketing and sales approaches have become grossly inefficient and outdated. By relying on antiquated strategies and ineffective methods, organizations find that 80% of leads and 50% of the sales team time is wasted. This misalignment adds up quickly and creates significant revenue leaking points across the organization.
The solution to this “revenue leakage” requires a shift in thinking about marketing’s fundamental role in the business. This shift moves marketing further and further away from doing more traditional “branding” style activities, toward campaigns and tactics where there is a direct line of sight to revenue.
Why is this shift from brand marketing to revenue marketing happening in the first place?
Digital makes measurement possible - Digital marketing has made it possible for marketers to measure more of what we do. 10 years ago when I was spending my money on print advertising, traditional PR and events it was hard to track the amount of revenue I influenced. Because it was hard to measure we often allocated marketing spend across tactics based on anecdotal information. We took a guess at what worked based on how many people we got in front of and not how many folks actually took action. Now for the majority of the tactics I run, I can tell you exactly what actions we drove in terms of numbers of clicks, form fills, opportunities and revenue. Using a tool like Marketo I can track which prospects received my emails, opened them, clicked on links, downloaded content, how many times they visited my website, what search terms they used to find my site and what they looked at once they got there. And it’s not just me that can see that – my sales team can see it and use it to better prioritize what they are doing. Why on earth would I want to spend money on tactics where I didn’t have that level of visibility into results?
Marketing is being asked to be more accountable – in my opinion, as digital marketing became more popular and executives began to see that it was possible to measure the results of these types of campaigns, it got people thinking about how they might measure everything else. Historically most companies typically had two types of marketing programs they were running – lead generation programs that were measured in terms of pipeline generated and branding programs meant to drive awareness that were either not measured at all or measured in a way where it was impossible to attribute a shift in awareness to any single activity. Now, if you were a CEO and had to choose between spending money on things you knew were driving revenue and things you weren’t so sure about, which would you choose? It’s no wonder we aren’t brand marketing like we used to.
Revenue and Respect for Marketing
One of my favorite quotes of the conference came from Jon Miller, Marketo’s VP of Marketing. In his talk he spoke about the respect and credibility he has earned from his executive team by being able to predict at the beginning of the quarter how much revenue he can drive by the end of the quarter. He said,
Now when I show up at the executive meeting I’m not the arts and crafts guy, I’m the revenue guy
What do you think – are you still the arts and crafts person at your company?