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CMO/Marketing Strategy • Demand Generation • Product Marketing
Marketers, particularly IT Marketers, struggle, perpetually, to quantify a Return on Marketing Investment (ROMI). I don’t think I’m sticking my neck out very far by adding: without very satisfying results.
No surprise there. We’re looking for ROMI in all the wrong places.
Make-Money ROMI Is Wrong
ROMI is always about revenue.
ROMI approaches use a metric as old as P.T. Barnum:
X dollars bring in Y leads which convert to Z sales.
The investment value of the dollars spent is determined by the volume of sales generated. It’s a perfect model for businesses where marketing directly drives the sale: concerts and cruises and cleansers—Clapton to Carnival to Kaboom. But it’s completely wrong for IT Marketers.
As IT Marketers, we have everything to do with getting leads. But we have little, if anything, to do with converting those leads to sales. The role we play in generating Z is Zero. After we deliver our leads, Sales takes over—with some early-phase collateral support from us. Whether those leads convert is all Sales’ doing. Marketing can lure in 100 of the sweetest leads to the funnel and support them with jewel-encrusted collateral, but if Sales picks its nose during the pitch, it’s going to lose the deal. You can’t measure Marketing’s value based on Sales’ inability to close. Likewise, Marketing’s lead gen ability might stink as much as its collateral, but a great selling team still closes business on the few weak leads it brings in. You can’t measure Marketing’s value based on how good the reps are.
Sometimes, to try and break out of this endless, leads-only loop, we create paradigms for measuring longer term ROMI. Marketers are master paradigmists. Generally we end up with Rube Goldberg ROMI machines, based on market audits and awareness surveys and share of mind and buying trends and so on—sometimes measured over years. They’re never exact, since they’re based on an amorphous metric—what a marketplace thinks. Yes, they offer good general guidance. But they’re not the stuff on which solid ROMI is made. I can spend $1,000 on branding, and increase unaided awareness 20% over six months. But I won’t know the return on that investment until those newly aware people buy something. And then, we’re back to revenue-based ROMI.
Determining ROMI is critical to growing Marketing’s power and responsibility within the enterprise. Without it, no matter how hard we try to change it, we’re still an expense not an investment.
But If ROMI based on revenue is a bust, what’s left?
Save-Money ROMI is Right
The other ROI. The one most of us focus on when we market our own products. The one Sales teams use when they pitch investment value to prospects. Not the “Makes Money” ROI. The “Saves Money” ROI. (That’s the technology investment value in general, isn’t it? We measure and pitch the ROI of most tech solutions by decreased cost, not increased revenue.)
Viewed in terms of decreased costs, Marketing already delivers huge ROMI. It just goes unnoticed, unrecognized, unrewarded.
I’m talking about data sheets. That’s right, simple, humble, dull, unsexy, mechanical data sheets. Actually, all product related information. Case Studies. Buyer’s Guides. White Papers. Comparison Charts. All the content we deliver to early-phase leads. Some companies get 3000 percent return on their data sheet investment. Or is it 3 gazillion? It makes no difference. Nobody in IT companies notices. Not even IT Marketing.
The simplest way to make my point is to invite you to play the home game of It’s a Wonderful Life. Let’s live in a world where Marketing doesn’t create product collateral. We do everything else we do today—strategic and tactical. We just don’t do the product information thing. There are no data sheets in Bedford Falls. We’ll find that life still goes on, deals still get done, only without collateral it’s a lot more difficult. The first step of the selling process is still learning about the product, but without data sheets, somebody has to talk to each lead to deliver the information. Not somebody, really. Sales. Every lead that comes in now requires a conversation with Sales to answer questions like:
- Does your product produce reports?
- What size footprint does it have?
- Does it run on Linux?
- Does it come in blue?
- Is it Green?
Again and again and again.
Your Sales organization knows the impact the loss of product collateral would have, in all its aspects, on the cost and effectiveness of their sales cycles. Answering these rote, mechanical questions over and over would be painful. It might impose an entire other sales call. It might mean that only low hanging fruit can be pursued. It might mean good deals are left to wither. It might mean increased staff. It might mean bringing in a sales engineer for unqualified sales calls. It might mean hiring more reps to handle the same volume. A lot of which costs money—just figure how much it would cost in a year to add one $300 sales call to every untested lead that touches you.
All right, Clarence, we’ve learned our lesson. We want things the way they were. We want to go back to the good old Building and Loan.
Once in a Sales Cycle or Business as Usual?
Can we then make this statement?
Product collateral lowers the cost of sales by shortening or eliminating cycle steps and resource requirements.
If ACME spends $10,000 on data sheets, and it eliminates one $300 step out of every sales call, and its reps make 1,000 calls a year, that’s a $300,000 reduction in cost of sales—or a ROIM of 2900%.
A phenomenal investment, those data sheets, for ACME.
But is that all there is? Is top-of-funnel the only point in the cycle where Marketing can deliver this value? Is product information the only content Sales needs from us to streamline its cycle? Is there no other place in the cycle for us to generate the same kind of ROMI?
What about half an inch down the funnel, after product information has been delivered? Or a little farther down, when Champions emerge? Or farther, when Connectors make themselves known? Or farther yet when Business Users start getting anxious?
Don’t we know as much about their needs as we do about the early evaluators?
- The Sales force knows the types they encounter, beyond just the hunters/gatherers our lead gen brings in. They give them names. Gatekeeper. Champion. Influencer. Obstructer. Connector. From our perspective, each group represents a Marketplace.
- Sales knows the motive each has for being in the cycle. Obstructionists and Champions often want to just get their own way (Linux vs. Windows; software vs. appliance). Connectors want to achieve benefits from bringing people together. Business Users want to avoid difficult retraining.
- Your Sales force knows what messages need to be delivered. The need or behavior of the marketplace is predictable. Gatekeepers need to be convinced. Obstructionists need to be satisfied. Champions supported. Users soothed.
- Sales knows the moments in the cycle when each typically surfaces. Champions emerge early. Business Users mid-way. Legal late in the cycle.
Given all that, given the same knowledge points we have when we build data sheets, wouldn’t a simple piece of content achieve the same ROMI that product collateral does? If you can allay User anxieties or forestall Obstructionist objections with a piece of paper, haven’t you shortened the cycle?
Test It Yourself
It’s easy to test if it the answer is yes. Learn about the selling process from your Sales force. Keep an ear open for those M’s—message, market, motive and moment—and work with Sales to identify content that could help them shorten their cycle. Whatever reflects their experience in the field. Or any of a host of other possibilities—whatever might cut steps or time out of the cycle.
Just off the top of my head:
- Bringing Home Baby: An Overview of Integration and Configuration might minimize objections about resource and infrastructure impact.
- Like Riding a Bike: Learning ACME BigWare might sidestep demos.
- Dollars and Sense: Ten Reasons Why BigWare is Right for You might provide guidance, and even tools, to help your Champions make your case.
Maybe you come up empty handed. Maybe you come up with a few ideas that when you test them won’t deliver the value you had hoped for. Maybe two or three work. Maybe you spend fifty grand on a project. Maybe it saves ten times that in shortened sales cycles.
Maybe you can convince folks that that’s sweet ROMI.
Ultimately, developing this kind of ROMI model puts Marketing in a catbird seat. By being able to draw a single, straight line between Marketing and a reduced selling process, we pinpoint—with dollar signs and decimal points—Marketing’s value. By having this kind of broadened focus, we expand, enhance and enlarge the reach of our message and our brand. Most importantly, savings-based ROMI pulls Marketing out of the expense bucket—where things like paper clips and trash bins reside—and puts it squarely in the investment bucket—where budget, influence and authority come from.
And besides, teacher says every time a cycle step is skipped, an angel gets his wings.
Mike Fischler has been marketing technology and creating technology marketing content for 30 years, as both a marketing executive and as a consultant. His work has taken him to fourteen countries on four continents—from Finland to Fiji. He has consulted with nearly 200 companies, some internationally recognized and others known primarily to their own markets. Mike has written dozen of articles on Marketing, which have been published on over 50 web sites. His web site is www.markitek.com and he can be reached at email@example.comVN:R_U [1.9.7_1111]Gigantic ROI: What Marketing Does Best ,
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