By now, most marketers understand the importance of mending the traditional rift between sales and marketing. The mistrust and miscommunication that’s so often found between the two teams can act like an anchor on your company’s growth rate. In fact, organizations with good alignment between sales and marketing teams achieved 20% annual revenue growth in 2010, according to a study by the Aberdeen Group. By contrast, companies with poor alignment saw revenues decline by 4%.
Often, one of the biggest blockers for sales and marketing alignment is the very different views each team has of the funnel. For example, they might disagree about the number of stages a lead passes through before becoming a customer. Furthermore, they often use different terminology to describe those stages. But in order to adopt an effective SMarketing (get it?) strategy, sales and marketing must have a unified picture of the funnel and standard definitions of each stage in the process. For example, HubSpot’s SMarketing team uses the following funnel stages:
By now, most marketers understand the importance of mending the traditional rift between sales and marketing . The mistrust and miscommunication that’s so often found between the two teams can act like an anchor on your company’s growth rate. In fact, organizations with good alignment between sales and marketing teams achieved 20% annual revenue growth in 2010 , according to a study by the Aberdeen Group. By contrast, companies with poor alignment saw revenues decline by 4% .
This article is an adapted excerpt from our free ebook, An Introduction to Closed-Loop Marketing . To learn more about how to use closed-loop reporting to improve your marketing, download the complete ebook here .
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Almost a century after John Wanamaker spoke those words, most online marketers can still feel his pain. The irony is, today, marketers have the technology they need to “close the loop” between marketing and revenue, but few are actually taking advantage of it.
One of the biggest trends in business organization for 2012 will be how businesses can better align their sales and marketing organizations. Businesses with mature sales and marketing organizations are seeking ways to improve their efficiency and generate more leads and customers without having to blow up the size of their teams. This is where the idea of revenue disruption can enter a business’ goals. Revenue disruption describes how changes to the way businesses organize their marketing and sales efforts can help them become dramatically more successful. One way that companies will do this is through a “SMarketing” effort, making sure that their sales and marketing teams are well aligned and communicating with each other.
As an inbound marketer, you are probably driven by the number of leads you generate for your company. Usually, a small percentage of these leads convert into customers, so by logic, the more leads you produce, the more deals the sales team closes. In order to drive growth and generate more revenue for your company, you focus on increasing your leads goal month after month. But what happens when you start to saturate your market or it’s just not possible to hit your new goal with your current resources?
This is a guest post written by Andy Paul, the CEO of Zero-Time Selling, Inc. and author of Zero-Time Selling, Ten Essential Steps That Every Company Should Take to Accelerate Their Sales. Measure the effectiveness of your inbound sales lead follow-up efforts with the free Online Sales Assessment Tool.
As a marketer, you work your butt off to generate awesome leads for your company. You do this by leveraging a number of different inbound channels such as business blogging, email marketing, and social media. And if you’re like us, you lose sleep over how you will hit your ever-increasing monthly leads goal. I bet there are times when you felt like you’ve exhausted your creative marketing juices and are stuck trying to figure out what to offer next. Fear not, a simple solution to your problems is to use the intelligence you can collect from closed-loop marketing.
A good marketer will say “I spent $1,000 on paid search and generated 100 leads for the sales team. I’ll do more of this in the future!”. A great marketer will analyze the data one more level, and say “I spent $1,000 on paid search, generated 100 leads for the sales team, they closed 5 of them, and 4 of those customers left us after 3 months. I’ll think twice about trying paid search in the future.”
So how do you transform yourself into a better marketer? Making sure that you’re pushing the needle on the right metrics. Here’s a quick primer on 3 dead-simple marketing metrics that everyone should be focusing on in some capacity.
1. Return on Investment (ROI)
Return on Investment is a percentage that helps justify your spend on any action. If you are making more profit than what you spent on the investment, all is well - this action was worth your investment.
ROI = ( Profit - Investment ) / Investment
But before you run off to Excel, lets make sure you’re taking all the relevant factors into account. When you make this calculation, are you really looking at profit, or are you focusing on revenue? This one is a bit tricky, so don’t worry - just make sure you’re using what is left over after sale has closed.
Now lets give this a shot. You’ve just done a mailing campaign, and it cost you $500. It took you about an hour to put together, and you’d normally bill out at $100 for this (our Investment is now up to $600 total). It really doesn’t matter how many people the mailing went out to, but we’ve generated 50 leads from this effort, which our Sales team values at $20 per lead (this puts our Profit at $1000). So our ROI calculation looks like this:
ROI = ( $1000 - $600 ) / $600 = 0.66
Multiply by 100, and you’ve got a percentage, and for this effort, our return was 66.7%. On the surface, we made less than we spent. A good effort would be one where the result is greater than 1.0 - it means we made more than we spent. If your ROI is anything less than 100%, you're probably better off putting your investment into an interest-bearing account of some kind.
This lesson emerged from the Science of Lead Generation webinar with HubSpot’s social media scientist Dan Zarrella as attendees posted their inquiries. Here are our answers to some of the top questions we received during the live session:
Subscribe to HubSpot's Marketing Blog
Join 350,000+ fellow marketers! Get HubSpot's latest marketing articles straight to your inbox. Enter your email address below: