Do you struggle trying to prove Marketing’s “value”?

If so, this article is for you.

Marketers are some of the most intelligent people I know. They know details inside and out. But when a CXO asks, “what’s Marketing’s value?”, that intelligence works against them. They launch into long-winded diatribes about evergreen branding and campaign statistics that eventually lead to a statement like “we can prove 50% marketing sourced revenue”. Great. Eyes glaze over. Meanwhile Sales gets credit for 100% and doesn’t bat an eye.

It doesn’t have to be this way.

After years of being on the Sales side and Marketing side, I realized that proving Marketing’s value is a real problem for modern Marketers so I decided give Marketers a glimpse into how a Sales person would handle the “value” question.

A word of caution. Selling is more emotional than logical so save your “but what about X?” comments. What I am about to explain will work, and work well but it has to be delivered with conviction. Don’t over explain it.

There are 2 simple steps:

 

1) Get buy-in on a premise

The first step is to get buy-in on a “market potential value” premise. Here’s how:

“You know, we closed $10 Million last year. To close that much each year, we have to have at least 10 times that in market potential value (i.e, pending pipeline, customers aware but not in market yet, [add your own], etc.). Do you agree?”

At this point, do not go any further until a casual agreement is made. If there is push-back, simply ask, “OK, how much in market potential value do you think exists to close $10 Million? 6x, 8x?”

Once that number is agreed upon, the old math kicks in.

 

2) Extrapolate the premise at 50% share

Now the easy part. Take the “market potential value” and apply a very generous 50-50 contribution between Sales and Marketing.

“Given our history of roughly 50% shared pipeline value, both Sales and Marketing are contributing roughly $50 Million, or 5X revenue each, toward total market potential value.”

There you have it. Marketing’s value is 5X revenue. From that point on, keep referring back to the proven number.

 

Marketing Value Take Away

Marketing’s value to an organization is much more than total revenue. Don’t EVER shortchange Marketing’s contribution value to an organization by trying to take credit for a percentage of sales; that’s always a losing proposition against the real value of marketing.

Instead, take the annual sales number, multiple by 5 and that is the number you should use as marketing’s potential value in revenue generation. Sales will still have a respectable, and accurate, measure of it’s contribution – total sales.

To see a real-life example of this, check out this case study: How Marketing Generates $1 Billion in Funnel Value for a $100 Million dollar per year company.

Enjoy your new found respect!