How Much Did You Spend? How Much Did You Earn?

February 22, 2008 at 10:54 pm Leave a comment

Most good marketing VPs know how much they spend. But I did an informal poll at a recent gathering of CMOs, and I found very few really knew how much their marketing programs generated in revenue for the company.

Most took the easy approach and told me how much their company earned overall. Since marketing generated 100% the leads (sorry Sales…), then that was how much Marketing did. Two million marketing budget, ten million in sales, a tidy 5x ROI. Another round, barkeep.

Well, I hope your CEO doesn’t let you get away with that. Because if he does, then you really have no idea what’s working and what’s not. And when whatever it was that was working stops, you just won’t have any idea.

And when I say something like that to a VP Marketing, they usually launch into some variant of one of the following: “Our CRM system sucks,” “Sales doesn’t fill in the ‘lead source’ field in Salesforce.com,” “We can’t track it through the channel,” or all of the above.

All of these are real problems. Some of them are hard to fix, especially when you are moving fast. So, what to do?

Well, if you really can’t get the data, or if it’s going to take IT a year or more to fix all the systems, then I suggest making some estimates. Since you know your spend by program, and the number of conversions, and you can back out maintenance and renewals from the total revenue number, you can probably make a decent first cut. Discussing it with your team and with Sales, and piecing in the hard deal data you do have will help clarify the picture.

And if you can’t make it match up exactly because of missing or incomplete data, is that really so bad? Not really. It would be great to know exactly, but knowing approximately is helpful. You can spot areas where what you did seemed to have no impact (cut that sock puppet giveaway program), seemed strongly linked to sales (more of that, and maybe get IT to fix that data capture problem first), and areas that were a surprise (renewals were down – maybe time to work on a loyalty program or a customer conference).

So, ask yourself how much your programs made for the company. If you can’t, maybe your not earning your keep.

Advertisements

Entry filed under: Dollars and Cents, Old School. Tags: .

Are Trade Shows Dead? Airports and Opportunistic Marketing

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Powered by FeedBurner

Recent Posts


%d bloggers like this: