Comparing ROI generated by marketing and sales leader functions often leads to a shift in budget allocations—and more value creation from the associated revenue growth.

Revenue attribution is one of the most important KPIs a board member can review. If your CMO is not currently reporting on revenue attribution, it’s imperative that they start immediately. Download our SBI Magazine Special Issue: Revenue Attribution.

 

Revenue attribution involves two views that must be measured concurrently. Both views are essential to avoid skewing the marketing discussion in a way that hurts revenue growth:

 

  • Trace each dollar of revenue back to the marketing or sales activity that originally sourced the opportunity.
  • Understand all the sales and marketing activities that helped influence the revenue booking.

     

In this case, marketing activities include online advertising, trade shows, content assets, webinars, and podcasts; sales activities include prospecting, referrals, demos, and the like.

 

Value Creation

 

Value is created only by capturing new revenue. That requires both sourcing and closing opportunities. Because customers complete over half their buyer’s journey before they engage a company’s sales team, marketing programs must move buyers along to that point. If marketing focuses too much on sourcing opportunities, buyers will be frustrated and revenue will suffer; if marketing overemphasizes sales influence, pipeline generation will suffer.

 

Good CMOs report on metrics such as budget, lists, programs, leads, and so forth. They speak in qualitative terms with anecdotes about what’s working. Great CMOs carry metrics all the way through to pipeline generation and ultimately revenue contribution. They speak in quantitative terms presenting return on marketing investment, with an eye toward both sourcing and influencing revenue.

 

ROI Ramifications

 

An astute board understands the importance of revenue attribution and the associated value creation. It supports the CMO, knowing that revenue attribution is a directionally correct discussion. This board does not expect the CMO to tie every dollar of marketing to revenue, appreciating that exercise would not be worth the effort if it’s even possible.

 

By forcing an ROI discussion across both the CMO and the sales leader, the board can measure the returns each group is generating from its allocated investment dollars. Often this leads to the realization that the marketing function is producing greater returns than sales. As a result, the board allocates more budget to marketing and increases productivity per sales head count. The associated revenue growth creates value for the company and its shareholders.

 

Have expectations gone up and left you wondering if you can make your number? Here is a Revenue Growth Diagnostic tool that will help you understand if you have a chance at success. Take the Revenue Growth Diagnostic test and rate yourself against SBI’s sales and marketing strategy to find out if:

 

  • Your revenue goal is realistic
  • You will earn your bonus
  • You will keep your job

     

Sales Revenue Growth

 

May 2017 SBI Magazine Special Issue: Revenue Attribution

How top-flight CMOs prove that each new marketing dollar they invest drives organic revenue growth.

ABOUT THE AUTHOR

Aaron Bartels

Helps clients solve the most difficult challenges standing in the way of making their number.

He founded Sales Benchmark Index (SBI) with Greg Alexander and Mike Drapeau to help business to business (B2B) leaders make the number. The world’s most respected companies have put their trust in and hired SBI. SBI uses the benchmarking method to accelerate their rate of revenue growth. As an execution based firm, SBI drives field adoption and business results.

His clients describe him as a consultant who:

 

“Makes transformational impacts on me, my people and my business”

 

“Solves my most difficult problems that to date we have been unable to solve ourselves”

 

“Brings clarity to an environment of chaos”

 

“Has real world sales operations experience making him qualified to advise us on a variety of sales and marketing challenges”

 

“Is able to spot proven best practices that once implemented will make a material impact on my business”

 

“Constantly challenges status quo and compels us to act”

 

“Focuses on execution and driving change to stick in our environment”

 

“Makes good on his promises while enabling our business to realize his projected results”

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