Hands up if you’ve heard this one before.
Marketing leaders struggle to convince the board that their department is a driver of business growth, resulting in squeezed budgets the moment the economy hits rough waters. Business leaders then ask marketing to contribute more to the bottom line but fail to provide the necessary resources and investment to facilitate that contribution. Rinse and repeat.
It’s a challenge we’ve all likely encountered before and one that’s difficult to overcome. While addressing this obstacle requires a major shift in mindset from those in the C-suite for many organisations (and increased resource or budgetary investments for the marketing department), it all starts with providing compelling evidence of marketing’s contribution to revenue growth.
The cost or revenue centre conundrum
It’s a fight as old as time and one that’s likely left its fair share of battle scars on B2B Marketers’ collective psyches. I know it certainly has for me. We know that marketing activity impacts business performance. We just aren’t as good at packaging it in ways that makes sense to the decision makers that matter and it’s a reoccurring challenge we haven’t been able to solve.
Measuring the impact of sales on revenue growth is easy. Every commercial B2B organisation will have a sales team at the heart of the business that has a well-trodden pathway to track, measure, and report on sales efforts and outcomes. But marketing’s impact is much harder to accurately gauge.
Aside from sales-centric metrics like marketing-qualified leads (MQLs), it feels as though marketing teams have always had to fight tooth and nail to show where and how they influence sales performance. It’s why marketing is so often seen as a cost centre and not a revenue centre. And it’s why budgets are regularly scrutinised, especially in times of slower growth.
The trouble with sales-oriented metrics is that at least for us in marketing, they fail to account for the months or years of activity that led up to that first sales conversation. We understandably lean on these kinds of metrics due to the struggle of attributing marketing spend to tangible business outcomes. However, our focus on the wrong KPIs not only harms the perceived impact of marketing on the business, but also the business itself.
We end up focusing on driving leads at any cost without paying any attention to their quality. Using the wrong tactics to appeal to audiences who may not exist. And worse yet, come to the wrong conclusions that go on to shape marketing planning in the future. It’s a vicious cycle that gets us nowhere, yet B2B marketing leaders constantly bemoan a lack of investment.
To change things, we need to get better at speaking the language our CEOs and CFOs are used to – demonstrating where and how marketing impacts growth. And that starts by looking at your approach to marketing activity.
Putting go-to-market at the heart of everything you do
B2B’s ‘growth at all costs’ mindset is part of the driving force behind B2B marketing’s focus on the wrong short-term metrics and KPIs. It makes sense, category-leading companies tended to command as much as 76% of market category revenues. That’s without mentioning Share of Market (SoM) growth on average 10 times faster than smaller competitors. It was often a race to the finish line, with the top three in any category sharing most of the market share spoils.
Now, the macroeconomic climate has meant businesses are looking to cut costs (as we all know), with many organisations switching their number one business KPI from annual growth rate to reducing customer acquisition costs (CAC) and extending lifetime value (LTV). They’re looking for more efficient routes to market that can keep up with slimline budgets.
Splintered sales and marketing teams and the business units within them may reflect the solutions your business offers. But they hardly reflect the realities of how B2B buyers make purchases. Rather than splitting the focus of each team with KPIs that are difficult to attribute to any sort of growth, marketing and business leaders need to look at whether aligning all customer-facing touchpoints around a centralised go-to-market (GTM) strategy may be better for their organisation.
At the end of the day, every team is working towards the same big-picture goal: growth. They need to focus on serving customer needs first and foremost to not only drive growth in the short term but also drive demand into the future.
It means understanding who exactly falls into your Ideal Customer Profile (ICP), where you sit in the market, how your solution addresses customer needs better than competitors, the messaging that delivers your USP, KPIs that align with overall success, and a targeted, integrated plan of action that brings everyone into the fold.
So, how do you set the foundations for GTM?
By keeping your existing sales and marketing KPIs and supplementing them with metrics that paint a clearer, big-picture view of how your company’s performing against your wider goals. An effective GTM strategy isn’t about tossing the baby out with the bathwater. It’s about guiding and aligning your business’ actions across the end-to-end customer journey.
Obviously, this all hinges on whether you’ve got the right data and insights to evaluate if you’re on the right track to begin with. You need to ask and keep asking questions like: what are our key growth priorities? Are we positioned correctly in our category, especially given shifting market trends? How aligned are our actions, not just across sales and marketing but also customer success, processes, and systems? Once you’ve got into the habit of continuously checking up on those key areas, the rest of the GTM process will flow on naturally.
For us at Transmission, it’s why we created our deep learning Growth Intelligence model. By helping businesses understand their strengths, weaknesses, and opportunities for improvement, we can help determine whether their GTM strategy, organisational structures, processes, technology stack, and campaigns are optimal for resilient and efficient marketing-led growth.
From there, you’ll have a better understanding of how to optimise and allocate your budget, time, and tactics – which also has the added benefit of de-risking the entire process so you’re sure your teams know where and how they contribute to business success.
By providing a blueprint for investment in a go-to-market strategy, we hope to show that the marketing department is a true revenue centre – highlighting the ways building your brand beyond a digital campaign, engaging and aligning sales, and moving from a product-first to a customer-first mindset can drive long-term, spend-efficient growth.
Interested in learning more about Growth Intelligence?
Reach out for a detailed run through of everything Growth Intelligence has to offer!