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Marketers Need a Seat at the Revenue Table
But they have to earn it. Here's how.
Posted Jan 22, 2008
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Who is in charge of revenue at your company? In most B2B companies, the sales department owns the revenue pipeline -- and therefore, the most political power.

In contrast, the marketing department too often gets left out of the revenue process. There are companies where sales holds weekly revenue calls, and nobody from marketing is part of the conversations. The executive leaders of these companies think of marketing as a cost center, not a strategic asset that drives growth. As one marketer lamented in a recent CMO Council report, "My group is perceived by upper management as the people who do color brochures."

Marketing is suffering from a crisis of credibility. So what can marketers do in order to be seen as part of a machine that drives revenue and profits, not just the people who throw parties and buy swag?

1. Forecast results, not spending
Marketers must forecast and predict leads, pipeline, and revenue with confidence. Sales and marketing must sit together at the revenue table to contribute to next quarter's and next year's forecast. Marketing's role is to predict how many new qualified leads will enter the marketing funnel, how those leads will move through the funnel, and how many of them will become "sales-ready" in any given quarter.

2. Make hard business cases for spending
Marketing also must make a hard business case for the resources they need to deliver on those forecasts. This requires knowing what it takes --- in money, time, and effort -- to acquire qualified leads and nurture those leads until they are ready to talk with sales. Marketers that use this type of rigorous methodology to determine marketing spending are also able to make justify and defend their budgets. If the chief executive officer wants to cut marketing spending by 10 percent, the chief marketing officer can specify exactly what impact that will have on next quarter's revenue.

3. Use marketing metrics that matter to the CEO and CFO
Soft metrics -- such as brand awareness, impressions, organic search rankings, satisfaction, and quality -- are all important, but only to the extent that they eventually connect in a quantifiable way to hard metrics such as pipeline, revenue, and profit. The marketing dashboard must measure the impact of all marketing activities, both hard and soft. Keep all but the most critical metrics internal to marketing: When talking with other executives, make every effort to demonstrate how changes in soft upstream metrics impact the hard downstream ones that matter to the entire organization. By speaking the same quantitative language as the CEO and chief financial officer, the CMO will better communicate marketing's value and impact.

4. Employ standardized best-practice methodologies
There are two main benefits to using a documented, best-practice methodology. First, it provides a common language for consistent communication inside and outside the department. Consistency is critical to ensure reliable roll-ups and forecasts, and for accurate comparisons of value between different leads and opportunities. Second, a best-practice methodology improves performance by helping every marketer perform more like the top performers in the field -- regardless of each one's experience with any given tactic or channel. For too long, marketing has been seen as an art and not a science. Implementing a consistent best-practice marketing methodology will go a long way toward changing that perception.

5. Deploy marketing automation technology
Sales Force Automation (SFA) technology has become a no-brainer for most companies. The estimates for penetration in the U.S. vary from about 50 percent to 75 percent. The SFA solution is a key enabler of the activities that tie sales to revenue; without SFA, sales executives would find it much harder to roll up forecasts and implement best-practice methodologies. Unfortunately, most marketers have found it impossible to implement marketing automation technology to support their activities and funnel. The problem is that traditional marketing solutions are expensive, require up-front capital investment, and need lots of technology resources to implement and maintain. Fortunately, with the rise of on-demand software there are now solutions that work within the framework of today's marketing budgets and technology support. These solutions provide the automation and support that the marketing department needs in order to predict results, plan spending, measure impact, and improve performance.

Marketing can and must earn a seat at the revenue table. Earning a seat requires acting like the departments that are already at the table. It requires making forecasts, planning spending, and measuring results using hard business metrics such as pipeline, revenue, and cash flow. It requires implementing a best-practice methodology --- supported by marketing automation software --- that delivers consistent communication and improves performance. And, since better accountability necessitates better performance, it requires that the marketing department make good on its promises by delivering more and better leads to sales. Only then will marketing be seen as an equal partner with sales in the effort to deliver revenue for the organization.


About the Author
Phil Fernandez is the President and CEO of Marketo (www.marketo.com), a marketing automation company based in San Mateo, Calif. Marketo provides affordable, easy-to-use marketing automation software that helps B2B marketing professionals drive revenue and improve accountability.

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