The disingenuity of ROI
Michelle Pontes
Human-Driven AI | Author | Marketer | Synthographer | Creative Director
There’s an ongoing debate about the value of marketing. While the sales team directly contributes to revenue, the role of the marketing team can sometimes be less clear. Why should businesses invest in marketing? And more importantly, should marketing and sales work together?
The answer is a resounding yes!
Think about a typical B2B sales journey, there are many but for the sake of argument lets go with Awareness - Research - Consideration - Evaluation - Purchase Decision - Post-Purchase Evaluation.
Your marketing team works hard through the first 4 stages of this journey but then loses track of this client's journey because it has no way of identifying when and if this journey has been completed. I call this the "the olden days of marketing" - marketing generates interest and then passes the baton to sales, who are expected to run with whatever leads come their way. Marketing struggles to quantify its impact without clear communication and feedback loops. As a result, valuable resources and opportunities are missed.
The key to overcoming these challenges is with the integration of marketing and sales to measure what we should call "marketing influenced revenue". This approach does a lot more than tracking that final click before a purchase. It considers the entire journey marketing can effectively track even if working siloed off from the sales department.
Effective tracking and attribution models
How do we achieve this?
First start by understanding what can be effectively tracked and measured: website visits, content downloads, social media engagements, etc. Then select a realistic attribution model - the set of rules that determine how credit for sales and conversions is assigned to touch points in the customer journey.
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For example, if you decide to apply a Linear Attribution Model - each touch point gets equal credit. So lets say that each interaction is worth 10% of the deal value in terms of influencing the sale. If 6 out of 10 interactions where marketing efforts like attending a webinar, downloading a brochure or engaging with marketing emails, etc, marketing gets credit for 60% of the deal. In a ￡100,000 the marketing influenced revenue would be ￡60,000.
In a B2B context, calculating marketing influenced revenue can be complex due to its long sales cycle, this is why you must select your attribution models wisely. The choice of the right attribution model can significantly affect the calculated influence of marketing, so it's important you get it right.
The right attribution model will bring clarity to where your money is actually turning into profit. It a more strategic way of using every pound, not just spending it, but investing it where it will cost the most.
Businesses or clients that insist on ROI without understanding the nuances of unified operations risk perpetuating the old “investment in marketing” debate. Marketers who provide inflated figures without considering the full picture are inadvertently disingenuous.
Michelle Pontes
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Teams that don't contribute to the revenue directly (like most of them) might be neglected in their recognition, while they bring a lot of value - and revenue! I've seen it a lot in IT sector and that's also true for marketing. Marketing function should be marketing itself internally and yes, work very closely with sales to release it's full potential.