The Challenge of Connecting B2B Marketing Costs to Your Revenue
Business is about return on investment – or, you prefer, return on spend. Whatever you use your business-to-business marketing budget on, you want to see your dollars coming back with friends attached. Looking at the big picture is important, but by no means sufficient. There are many ways B2B marketing expenses of little value can hide behind a globally positive result.
You’ll probably agree, waste has no place in today’s enterprise. But how important is it to connect the dots between a marketing budget and customers’ positive buying decisions? According to Gartner, on average, a B2B company spends about 12% of its revenues on marketing. That could be more than the company’s net profits. Knowing what the company’s marketing is doing and whether it is directly influencing revenue is crucial.
Which Half Are You Wasting?
If the answer to this question was obvious, companies would already have optimized their B2B marketing spend for maximum business advantage. Yet many are still scratching their heads when it comes to quantifying the results. John Wanamaker himself might as well have said, “Half the money I spend on B2B marketing is wasted; the trouble is I don't know which half”, instead of his famous quote about advertising.
To get to grips with linking B2B marketing to revenue, we should first remove the obstacles. For a B2B company today, connecting the dots is often a challenge because:
- Sales cycles are long
- Multiple people in the company are involved
- Buyers jump backwards and forwards in their journey to a decision. It’s their right to do so. It just makes things harder for you.
- B2B marketing solves marketing problems, instead of sales and revenue (and profitability) problems.
Take a closer look at that last point. If they don’t keep their company’s key business goals in mind, B2B marketing teams may get sidetracked. They may start answering questions that tickle their marketeering fancy, but that don’t tackle the main business issues of signing up more customers and making more money. Here’s an example of the wrong focus. The number of downloads of your white papers by visitors to your website. Here’s another one. The number of Likes on your corporate Facebook page.
Follow the Money
It’s not that these items are unimportant. After all, white papers make a substantial contribution to a positive customer buying decision, as a Harvard Business Review survey has already found. And social media, whether Facebook, LinkedIn or others, can have a major role to play in gathering market information and building your brand image. But website downloads and Likes by themselves are not money in the bank, far from it.
The metrics that connect B2B marketing expenditure to revenue are things like the number of correctly qualified leads and the success rate in converting those leads into sales. Things like establishing which kind of advertising to which market segments, even to which individual accounts, carries customers the furthest on their buying journeys – maybe even all the way to purchasing. Yes, Mr. Wanamaker, now we the technology to tell you which half is working!
Using one suitable platform for your marketing and sales activities can solve or help with many of the issues above. Multiple actors can all work with one truth. Buyers will never leave your system, no matter how erratic their buyer journeys are. Revenue priorities extend all the way from sales to marketing, and back again. Even long sales cycles can be accelerated through the new approaches that become available, like account-based marketing.
In other words, with the right platform bringing marketing and sales together, you are already on the way to simplifying and optimizing the connection between your B2B marketing expenditure and your revenue.