By Marcus Hemsley, Founder of Fountain Partnership
“Half of the money I spend on advertising is wasted, the trouble is I don’t know which half.”
At the beginning of the 20th century, these words were famously spoken by John Wanamaker, a pioneer of modern marketing. These words have been used as an excuse by marketeers and salespeople alike for why campaigns are not making enough Return on Investment. You can still hear similar excuses like this used today, however given what we can now measure, they don’t hold might weight.
In 2018, we can track everything right the way through, from an impression of an advert online, to the Lifetime Value of a customer. What the most successful and fast-growing businesses have in common, is that they have the systems and processes in place to be consistently dialing up every step of the sales and marketing funnel.
For this to happen effectively you need alignment between the sales and marketing teams. However, this happens to be a rare occurrence. One reason for this may be because they are two different departments and, in some cases, in different buildings, different cities or maybe even different countries. This is strange when you actually stop to consider that sales and marketing are doing very similar jobs. They are two parts getting the same outcomes, which is driving new business and re-selling to existing customers.
As the Founder of Fountain, a Google Global award-winning Digital Marketing agency, I’m always fascinated by what market disruptors and fast-growing businesses are doing differently. It’s very clear to me that when you get alignment within sales and marketing, when both the sales and marketing funnel is dialed up, you can get an exponentially better Return on Investment.
And it’s not just about dialing up each stage of the funnel. The big piece here is something called Attribution. Now, I’m not talking about attributing a lead or an enquiry alone to a particular Ad group or keyword in your Digital Marketing as is the example here. What I’m talking about is attributing where your best customers come from based on Profit and Lifetime Value.
In some cases, you can even calculate how a particular marketing campaign impact EBITDA. What I’ve seen works very well is when people look at optimising both sales and marketing funnels based on where the most profitable customers are coming from. You can take the Pareto Principle (80/20 rule) here and apply it to sales and marketing.
Generally speaking, around 20% of customers will result in around 80% of profits. This may be 30/70 or 10/90, but there is likely to be a disproportion when you look at the data. If you can track where the top 20% are coming from, you can prioritise getting more of them through optimising your marketing campaigns, and ensuring those leads are given the best sales resource.
The way to do this is to get full tracking in place. So, getting your sales CRM speaking to your Digital Marketing Analytics and also getting Lifetime Value data speaking right the way back to the marketing department. And getting both sales and marketing to take joint ownership. Interestingly enough I’m seeing a number of tech companies that just have a Revenue Director – rather than having a CMO or a Sales Director – this one person is in charge of generating revenue for the business. This is fascinating because then it is one person that owns that and that encompasses generating sales from new business and existing customers alike.
Once you have the measurements in place and you can see where the most profitable customers are coming from, and you have either one person accountable or you have an agreement between the sales and marketing departments to work more closely together, you can feed data back and forth. You can make sure the marketeers are generating leads that aren’t just about the lowest cost and highest quantity, but about the highest quality based on profitability.
For example, if you have a set of enquiries that come from a particular word in Google that you’re running an ad on, they may be more expensive on the lead value than some other keywords, but when you attribute right the way back to the sale value and Lifetime Value they are by far the most profitable. So, then marketing will prioritise increasing Click Through Rate for that keyword. They will look at increasing the Conversion Rate on the landing page for that keyword.
The sales people will be told to prioritise these leads and they will be measured on who closes them. The people who close them at the highest percentage will have their sales patter recorded for best practice to help the other people in the sales team handle those leads. If they are the sort of customer that will re-buy, then you will put a process in for that.
Hopefully you’re starting to see how this alignment can work on a measuring perspective and tracking. It’s then a case of getting your project managers and operational people to put in a system and make sure there is a way of doing it.
So, while it’s technically possible, the reason why a lot of businesses don’t do it is down to people. We often recommend at Fountain getting in a consultant or someone external from the sales and marketing teams to get the people to align. We work with a gentleman called Adrian O’Gara from O’Gara Co, who works predominantly in B2B SAAS companies, helping sales and marketing departments to align.
What Adrian talks about is his “3 P’s”; People, Processes and Playbook. The processes can be put in, technically they can be done, but there needs to be willingness from the teams to work together to pull towards a common goal. This could be through workshop days, informal meetings with regular check-ups. There needs to be some way of getting people to align, once they have agreed to. Adrian talks about getting a PlayBook in place on having a common language, which is so important.
Overall, the things to take from this are it’s essential to measure sales and marketing as a whole. Have full tracking. Then look at finding where the top 20% of customers are coming from that will then feedback to how the sales and marketing teams will prioritise their efforts. Because optimisation is about prioritisation. As part of this you need to get either one person to take ownership or the CMO and Sales Director working together, having an agreed language, an agreed PlayBook and a programme of consistent checking to make sure that they are optimising each stage of the funnel.
By doing this you can dramatically increase the quality and quantity of sales, which will allow you to take market share and begin to dominate while also keeping the CFO, the CEO and the rest of the board happy.
Marcus Hemsley is the founder of Fountain, a strategic Digital Marketing agency set up 9 years ago. Prior to Fountain he was a direct sales copywriter. Fountain are a Google global award-winning agency specialising in paid advertising and conversion rate optimisation. Fountain’s methodology includes forecasting to reduce risk for clients, with a focus on full funnel optimisation to maximise return on investment. Marcus has worked with some of the world’s biggest brands, but really enjoys working with well-funded start-ups who are keen to disrupt traditional industries.