Answer the following question honestly:
If we increased our marketing budget in 2011, by how much will our revenues increase?
Chances are high that most executives in the science industry can’t answer the above question, and for good reason: Marketing is difficult to measure and its effects tend to be long-term, qualitative and elusive. But the inability to answer this question is detrimental to marketing. Marketers cannot clearly demonstrate their value to their organization using the language of business: money. In turn, marketing in the science industry has become marginalized.
Marketing needs a metric. Desperately.
This Article is a call to define a clear, quantifiable objective for marketing. By setting a key metric, a measurable objective for marketing, executives can, in a single move, gain control over all aspects of their marketing organizations. They can:
- Become more effective in developing and executing on marketing strategies by re-orienting their marketing departments to focus on results rather than deliverables,
- Instill accountability within the marketing department to optimize marketing budgets and budgeting processes,
- Encourage positive collaboration between the marketing and sales departments by clarifying the end goal for marketing.
So, what is the correct metric by which to evaluate Marketing? Opportunity.
The sum-total of all marketing efforts should be measured by how much total Opportunity, in fiscal terms, it has generated.
As a marketer, I define Opportunity as the culmination of creating awareness and preference, as well as the nurturing of an audience over time in order to predispose it to the company’s way of thinking in order to identify qualified prospective buyers in a regular, ongoing basis.
Several marketers and sales managers with whom I have had this conversation confuse Opportunity with lead generation. However, Opportunity encompasses much more than the virtually ineffective practice of lead-generation that most companies employ. Lead generation is unproductive in two ways: First, lead generation activities typically produce >1% response rates. Said another way, lead generation is typically 99% wasteful. Second, the quality of leads has historically been so low that sales personnel take little action on the leads generated, squandering that hard-earned remaining 1%.
Instead, creating Opportunity requires the systematic cultivation of a community within the market who is predisposed to the company’s point of view and whose members self-identify and self-qualify as worthy prospects when they are considering the purchase of a product. A true Opportunity-centric marketing strategy builds tactics based on the customer’s own buying cycle and creates the appropriate content to generate awareness about the company, its points of view and its products, then promotes long-term preference for the company by fostering two-way dialog between the company and its community, in order to cultivate qualified buyers from within the community to hand over to the sales department.
Opportunity should be measured in two directions in order to be meaningful: A forecast of opportunities generated by marketing, which comprises the number of qualified prospects with the money, authority and the need for a product, as well as a back-cast of opportunities validated by sales, which comprises the number of the marketing-generated opportunities that led to a quotation, and ultimately a sale. This bi-directional measurement of Opportunity will also foster collaboration between sale and marketing as well as provide accurate, actionable insights for the marketing personnel to optimize future efforts.
A new year is upon us as I publish this short thesis. It is my hope—and plea—that as an industry, we can hold ourselves accountable to generating meaningful results.
If you are an executive, I hope this brief introduction to the topic will inspire you to expect measurable results from your marketing organization.
If you are in sales, I trust that this post will motivate you to collaborate with your marketing colleagues to create the dynamics that will enable you to succeed more often with your prospects.
If you are a marketer, it is my sincere belief that by making ourselves accountable to results, we will gain a new level of credibility and authority within the organization to show true innovation in marketing. Maybe someday soon there will be more than one C-level marketing executive in the science industry.