How Marketing Investment Leads to Increased Sales and Profits

Starting a new blog series on Marketing in a Fortune 250 Global Technology Company. Seagate is a super-interesting place to work - we have components, systems and services. We market and sell to consumers, SMB, Enterprise IT, OEMs and we have a very large distribution channel.

Hope folks like the posts. Feedback is very welcome.

Thanks,

Scott

How do marketing activities drive a company’s revenue and profit? It’s an area every company in every industry wants to understand, and many don’t. This is especially true for technology companies. It is also something I have put a lot of thought into for our own Marketing activities at Seagate, some of which I will share with you here.

Our Marketing teams don’t link everything we do to revenue, because we provide a large set of services that support internal business partners. These things have to be done, regardless of whether revenue is generated. It would be hard to show a link to increased sales for many of these activities. Examples include new product packaging for our new Wireless Plus products, new technology announcements, presence at major tradeshows like CES, regular presentations to investor and analyst groups, and customer support information on Seagate.com.

There are many more examples of these “marketing services.” A marketing team’s goal across all of them is to deliver high-quality outcomes that meet the business partner’s need and to do so at the lowest possible cost.

Any company who wants to understand what their marketing investment provides wants to answer some key questions, including:

• We spent $X on customer- and partner-marketing activities: what revenues and profit did that lead to?
• We need to increase revenue and margin—how much do we need to invest in marketing and what activities should we invest it in?

By answering these questions, the company is able to optimize its marketing investments better to increase revenue and profit. This measurement should continue through each of three phases in a lead-generation system, all the way to the point of purchase.

Create and Qualify the Lead with Marketing

Marketers need a way to compare the effectiveness of different marketing tactics (ads, events, social media, web, etc.) to make sure they are spending cost-effectively. There has to be a way to measure these investments. Enter Cost Per Action, or CPA.

If you’re reading this, you may already be familiar with this concept and may employ similar measures. I refer to “action” rather than “lead” because you could be executing a marketing activity that is designed to drive an interim step on the way to generating a lead. CPA has been incredibly useful as a tool for comparing different marketing activities across different products and countries. It’s helped us make decisions about how to prioritize investments.

At Seagate, a key goal is to drive traffic to our website as a first step to getting a relationship started. It’s our main content “hub” for customers, and it’s where they can learn about our latest solutions for IT professionals, cloud data centers and small business managers. Often these interactions start with us knowing very little about these customers—not even their name. They’re just an internet IP address.

Our goal at this point is to provide relevant content that will encourage them to opt-in to hear from us more often, which is one of the things we consider an “action” Earning a customer’s permission via opt-in forms is a lot harder than capturing their information through back-end methods, but the pay-off is much greater. See good examples of how we do this here and here.

Once your customers decide to opt-in, the key is to nurture them.

Nurturing Customers and Keep Score

Once a customer opts-in, you should nurture them with more information tailored to their interests, and as they find value they may decide to provide more information about themselves. As they interact, you’re seeing what they decide to do and you can essentially “score” each of their engagements based on a scoring system that is meaningful for your company. For example, we score some activities higher than others—downloading a white paper or watching an online demo represents more engagement than passively viewing a product web page.

The purpose of nurturing is solely to understand more about what they are interested in. At Seagate we’re continually refining how we do this—little things like whether people scroll down an entire web page or whether a high percentage of people watch an entire video tell us a lot about whether we have the right content at the right time for potential customers.

When consumers reach this point, savvy marketers should try to move them as quickly as possible to a purchase. Then, if they purchase a product in your online store and register with you (opt-in), you must care for them via loyalty efforts that encourage customers to purchase additional products in the future.

Business customers need to be treated a little differently. Obviously it is not as likely that they will purchase through an online store, so they must be nurtured a little more strategically. Once a business customer reaches a certain nurture score, marketing has done its job and the lead should be handed over to a sales team.

Sales Team Finishes the Job

At this point, sales can contact these leads to learn more about them. Sales should be looking for answers to key questions, including how much they have to spend, how quickly they want to purchase, whether they can make the decision on their own, or whether there are other people who need to be convinced.

Sales should score leads based on the answers to these questions, using a process similar to the one described above.

If sales believes a lead is worth further investment they should nurture them through to purchase. That’s the point at which we know the marketing investment generated a sale.

With a system like this, a marketing organization is able to understand how marketing investment leads to increased revenues and profit. A company can gain the ability over time to work back from desired sales targets to determine how much it should invest in marketing. And ultimately, it can create “stickiness” with participating partners, if the company helps grow their businesses and closely link with the partners’ sales and marketing efforts.