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Why Leads Aren't Enough for Strong Marketing

The Objective of Marketing

What’s the point of marketing? No, seriously, have you ever asked yourself why you’re doing it? If you don’t truly appreciate the purpose of marketing in the first place, then you’re at risk of becoming lost chasing so-called results that are measured using misleading metrics.

Let me explain.

Think about the last time you got excited about the performance of a campaign you delivered. Let’s imagine you have a really high open-rate from your email marketing campaign. Your Google Ads are getting above-average click-through rates. And you just delivered a viral campaign that yielded hundreds of new leads for the business.

Sorry to rain on your parade, but none of those metrics mean anything if you truly understand the purpose of marketing.

Marketing at its core is communication with your target audience. That’s the what. But the purpose (the why) of marketing is to help a business expand its market, to sell more, thus increase revenue and generate profit. That profit enables the business to grow and the cycle continues.

It’s possible that all of the above successes will lead to the final objective of business growth, but they alone are not enough to be considered cause for celebration. A high email open rate may show strong targeting, but if those users aren’t turning into customers, it’s meaningless. A high click-through rate may show relevancy in your searches, but again if those visitors don’t then convert into leads, it’s meaningless. Even when you do generate substantial quantities of leads, those leads need to convert into sales if they are to have any meaning.

Therefore, can you really sit back and say “I did a good job” if the metrics you’re measuring aren’t definitively achieving the core purpose of marketing?

Marketing & Sales, not Sales & Marketing

There’s a bizarre rivalry between Sales & Marketing departments. I suppose it’s because the Sales team tend to blame Marketing for the lack of sales. These excuses may be familiar: “There aren’t enough leads coming in” or “The quality of the leads is poor”. At the same time, Marketing teams tend to blame Sales for the same excuse. “We generated the leads, but the Sales team didn’t close them”.

These excuses and blaming tactics have eroded the teamwork between the two departments, and created an imaginary divide between the two.

The truth is, Marketing & Sales are the same thing. It’s just that Marketing is the first part of the decision making process and Sales is the last part. Yes, they require different skill sets, but as far as the customer is concerned, it’s all part of their journey of discovery of your company.

If these issues sound familiar, worry not. There’s a clear way to define responsibilities between the two departments. I always recommend to our clients that if the sales team deem a lead to be worthy of their time (i.e. it’s a qualified opportunity), then they are taking on the responsibility of closing that lead. It can no longer be blamed on marketing for delivering a poor lead.

Does that mean that Marketing can relax once they pass a quality lead to Sales? No.

A Series of Decisions

Each time the customer experiences one of your marketing communications, they make a decision. Assuming they ultimately become a customer, the majority of those decisions were positively in your favour. The decision making process is often spread out over a long period of time and along the lines of:
  1. Do I want this?
  2. Is it going to provide me with value?
  3. Does the value outweigh my investment?
  4. Can I get more value elsewhere?
Marketing Decisions - Which Way to Choose?

All of these decisions are influenced by both Marketing and Sales.

These small decisions all culminate with one big decision: “Do I trust this company?”. If the answer is yes, then at the end of the Sales process they are going to buy.

The Quality of a Lead

Your responsibility as a marketer is to attract high quality leads and deliver them to Sales. But how can you do that if you don’t know which leads are high quality? Even if they are qualified by your Sales team, that doesn’t necessarily mean they will close and thus generate money for the business.

You need to be measuring the quality of your leads by the amount they are spending with your company.

Only then, can you track back the big spenders and ideal customers back to specific sources and/or specific marketing messages.

Revenue is the key metric you need to track (along with ROI, but more on that later), and that defines the quality of a lead.

Quality Over Quantity

You see, the risk with purely tracking leads is that you are motivated and rewarded for providing your company with more and more leads. There is clear incentive to understand the source of leads, but no incentive to understand the source of revenue. There’s no incentive to understand which specific communications led to closed business, either.

So your marketing may appear to be strong, but is it achieving the core purpose of Marketing; attracting customers and generating revenue?

As a marketeer that’s a scary concept. It presents a risk that:
“While I thought I was doing well, I might not have been? If I were to start measuring revenue, it might show that I’m not actually delivering value to my company!”
In my opinion, this fear is a massive issue. It’s holding marketeers back from delivering true value and from achieving personal success. It’s better to let sleeping dogs lie, right? Wrong.

If you have the courage to take that leap of faith, your marketing performance will substantially improve and you’ll be able to demonstrate your value to your employer using clear, measurable financials that can’t be disputed. That leads to promotions, pay rises, and career progression.

Setting Expectations

Before you start measuring revenue, it’s important that you set expectations with your employer and anyone else who’s measuring your performance. You want to positively impact the company’s bottom line. Let them know that fact; it’s worthy of their attention, and shows them that you have the company’s best interests at heart.

What you need to make very clear, is that the initial results may not be as expected. The whole point of measuring revenue as a marketing KPI is to understand what’s truly affecting the company in positive ways, and what’s not. So in the early days, the results might show that a lot of things are not having the positive impact everyone thought they were. But that’s a good thing. It shows you how you need to change course, and will lead to a far more effective marketing strategy that truly does grow the business.

The Main Obstacle (to Measuring Revenue)

The biggest obstacle you’re likely to face when measuring revenue, is obtaining the revenue numbers themselves.

Consider your employer’s frame of mind. If they share revenue numbers with you, and you see that marketing is generating a huge amount of money, then you might then ask for a pay increase. Indeed, our client’s first concern is that we’ll put our prices up as well.

The solution to overcoming this fear is to measure Return on Investment as an additional KPI. If your salary increases (or our prices increase), then the company’s marketing investment increases and the return on investment decreases. This is a powerful argument, because you can then justify that, if ROI goes up, the business is benefitting so you can justify a salary increase that reflects that. You’re also “owning” your responsibility to generate ROI for the company. If the ROI doesn’t increase, then your employer won’t be forced to increase your salary either. So it’s win-win.

How to Measure Revenue

How to Measure Revenue?

In order to measure the revenue that Marketing is generating and understand which marketing communications are driving the most revenue, you need to work closely with Sales.

Beyond your standard tracking setup, you need a way to identify which of your leads have converted into customers, and what that generated in terms of revenue.

You have data in terms of the traffic sources, leads, and when & where they came from. Your Sales team have the data on those leads, in terms of when they closed, and how much they spent.

The challenge is in marrying the two.

There are a few ways to do this. Let’s start with the easiest: HubSpot & other integrated ecosystems.

HubSpot is known for combining the metrics of both Marketing & Sales. Salespeople use the CRM and Marketeers use the analytics tools. So you can see exactly when a deal is won, and where that deal came from in terms of digital channels and marketing communications.

Unfortunately HubSpot’s CRM is a bit limited in functionality, and HubSpot’s value is only truly realised if the entire suite is used. If Sales can’t use the CRM due to its limitations, then you won’t get the revenue data that you need.

If you don’t use HubSpot, then your next best bet is Google Analytics and a cloud-based CRM like Pipedrive. You then need to use a third data analytics/dashboard system which connects the data of the two. The most advanced of which we’ve used is Tableau. There are also other alternatives such as:
  1. Sisense
  2. Looker
  3. ReportPlus
  4. Zoho
  5. Qlik
Within the CRM, make sure that there are two custom fields:
  1. Source
  2. Interested In
Source

This field should be a drop-down menu with specific sources only - don’t leave it to them to type it out, because it won’t help you when analysing the data.

Here are some example Sources:
  • Website
  • Email
  • Phone
  • Referral
  • Existing Client
  • Networking/Relationship
Interested In

This is a self descriptive field where the salesperson can tick what the lead is interested in. I recommend a multiple choice option so they can select more than one thing. These are normally the types of products or services that you sell, and leads may be interested in several different things.

Tips

Now that your tracking is set up, you should be ready to understand which leads are converting into revenue. Be patient, of course you’re going to have to wait for the leads to close - and sales cycles can take months. But once that data starts to trickle through, the new level of marketing intelligence that comes in will transform the way you approach your strategy from then forward.

Keep an Eye on Sales

Adopting new habits is hard. Don’t expect sales to be 100% effective at tracking the important new data from day one. It’s going to need close attention for about 3 months before it becomes second nature for them.

Remember Phones

Not all enquiries will be trackable. Phone calls made as a result of marketing are notoriously hard to track. However, if you can track the time of the call, and use a unique number for the website, you may be able to track back their session to identify where they came from. There are third parties who also provide unique numbers and tracking facilities to make your life easier.

You can still track other metrics

Although Revenue and ROI are the most important metrics to track, it doesn’t mean you can’t track impressions, click-through-rate, conversion rate or leads. All of those metrics are great indicators to ensure you’re on the right track. For example, if your conversion rate is really poor, it doesn’t matter what else you’re tracking, because you’re not going to get any leads. So of course, track it all.

But just don’t lose sight of why you’re doing marketing, and ensure that Revenue is the final metric you use to measure the quality of a traffic source and marketing communication, in terms of how much business it is driving.

Good luck and happy marketing!

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