Marketing » From Expense to Revenue

Hey there,

Today we’ll continue with overcoming leadership resistance and turning Marketing from Expense to Revenue.

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Topic Of Today

· Interview with marketers on Demonstrating Marketing’s Value 🎙️

1. Can you share an instance where you faced a challenge in getting leadership buy-in for a new marketing initiative?
How did you navigate that situation?

Zoli Erkel:

As a Growth Marketer with experience mostly from Agencies, we often face challenges from our client’s leadership to our proposed budgets.

1: this is completely understandable as their goal will always be rationalising their spendings and making sure that the ROI is as high as possible.

In these situations we never get defensive, instead we use metrics that reflect on bottom-line revenue to show the effect of previous campaigns and project the potential effects of our next motions.

2: We also make sure to get on the same page when it comes to these metrics, meaning that defining what each metric means is a key part of the equation.

Without a clear, business-wide understanding of what an MQL is for example, we can’t support our budgetary needs with accurate  numbers of our results.

In case we haven’t done a project for the business before, we’ll usually suggest a pilot or Proof Of Concept project that is a small-scale version, or a part of the “big project” that we ask the budget for.

This will need a much smaller budget and will be able to provide leverage for our budget ask. We’ll also run through current metrics of the business in some (most) cases, to see if they have a realistic understanding of their current state.

Often, the “great” metrics reported are based on misleading metric definitions. For example what they consider as an MQL is far from it. This also helps us prove our case for the suggested campaign.

Apoorv Sharma:

There is a specific occasion that comes to my mind...

I was running Google Ads for this payroll company with a super high CPC, it was hard to convince this client to use a large enough budget for paid initiatives.

Being a young company of just 2 years old a Cost Per Click of $75 was huge because that would mean $7500 for 100 clicks with uncertain conversion.

It was super hard to make them understand the value of LTV, even though it was 5x the CAC of $7500.

To make them comfortable with Google ads we decided to ease them in. We helped them start with Youtube ads only through the Google platform which was 10x cheaper.

This way we could get them more at ease with the idea of ads and then later transitioned into search ads with the higher CPC.

So I guess, easing clients into a new initiative with a smaller-scale motion is indeed always a better route to take.

   2. In your experience, what is the most effective way to
       communicate the value of a marketing campaign to leadership
       who might see marketing as an expense rather than a revenue
       driver?

Zoli Erkel:

The simplest way is with dry facts.

You can argue why marketing is actually really helpful based on theoretical ideas or even facts from other businesses... understandably leadership will always be most interested in how marketing is truly affecting their business.

To prove that it plays a significant role in reaching overall business goals, all you need is:

A. Setting up the “right” metrics (based on shared understanding of how those metrics are defined), these should be reflecting bottom-line revenue, and

B. Showcasing how these metrics are affected by marketing’s activities.

For that you can create or use a model in for example excel or google sheet or wherever that is able to track these metrics and project potential future outcomes.

Apoorv Sharma:

Yep, completely agree.

Customer influx, revenue influx, freemium users - freemium to paid.

Anything that is able to prove to leadership that they are not wasting their money.

 3. Can you describe a situation where a marketing initiative
       significantly impacted sales, but sales or leadership did not
       recognise or underestimate this impact? How did
       you handle this?

Zoli Erkel:

While I don’t have personal experience with this in the sense of doing something from Marketing’s side and then not being recognised...

I have worked both in sales and in marketing and it’s safe to say that in a corporate setting marketing is

A. rarely used to its full potential

B. rarely seen as something that should affect overall business goals

C. are rarely given the necessary tools to do its job right

Sadly enough, most often in a corporate setting marketing is deemed to play an arts&crafts department role or that of a coin-based lead machine.

In these situations unsurprisingly marketing is never able to fulfil its goal and will deliver subpar results, with insignificant effect on: - other departments’ jobs, - overall business goals.

Handling this can be difficult as it requires a mindset or paradigm change. What can be done however is showcasing how marketing can have a much higher impact with tools that they understand.

Meaning that if you are able to connect marketing activities to bottom-line revenue, leadership will be able to see its impact, and will be able to support marketing better in the future. This will then avoid situations in which marketing is not appreciated.

Apoorv Sharma:

Haha, don't want to sound like a parrot here, so I'll just say, luckily I never felt underappreciated.

But yes, definitely it was always easier to do my work, when I felt the support of sales & customerservice, instead of feeling like I should be in a race with them.

 4. How have you addressed the misalignment between sales,
       marketing, and leadership teams in your previous roles? Could
       you share any innovative strategies or tactics that helped bridge
       this gap?

Zoli Erkel:

In my experience, the easiest way to bridge the gap between sales, marketing and other departments is to

(Btw what is with me and my lists? Lol...anyway)

A. facilitate communication between all departments, meaning:
set up regular meetings to track common goals, set up teams of people from separate departments to work on shared projects together create team building opportunities with shared non-business related activities, or workactions etc.

B. create common goals. sure this sounds way too obvious, after all, they have common goals anyway » like building the business...

yet way too often the way the goals are described, the messaging of what the business is selling and the incentives are so vastly different, that there will be little or no common ground between departments.

Instead of siloing these departments away from each other, make sure that the goals and metrics are defined in a common language so that they are able to work together instead of competing with one another.

Apoorv Sharma:

Yeah, I feel like you have to align marketing to sales and not sales to marketing.

For example, using the insights that salespeople give you about marketers and building that into your future assets.

What I see happening often is that sales would work in a closed bubble but marketing can be flexible. It's the nature of the department. So interviews from sales teams help in crafting more precise marketing material and campaigns.

Zoli Erkel:

I guess it's a 2-way street? Both need to support one another.

Apoorv Sharma

Agreed 🤝

   5. In your opinion, how can marketing departments’ best
       demonstrate their value and influence, especially in small to
      medium businesses with limited resources? Can you share an
       example from your career where you were able to do this
       successfully?

Apoorv Sharma:

I think doing small experiments with the right audience in multiple channels without spreading ourselves too thin would be best.

Once you figure out what channel has the best prospects you double down on that while having a secondary channel working in the back.

For example, my client had a small marketing budget but a substantial amount of visitors to their website. The best thing to do in that scenario is to figure out how to convert the present traffic more. Creating flows, doing CRO, and optimising the website will be number one.

Zoli Erkel:

I don’t think that demonstrating the value of a marketing department is based on the size of the department or the budget.

Sure a huge budget and a lot of smart people will have a better chance at achieving results, and yes an understaffed department with a budget that’s close to 0 will have a difficult time.

But if we are not talking about extremes but merely thinking about a smaller marketing department, it can still run impactful motions.

For example, if there are only 2 people in a marketing department and they have a tiny budget...

they can still build up a relevant social media presence by talking to sales and customer service, gathering immense value from customer feedback to understand:

· what are the most pressing pain points of the target customers,

· who are the best customers of the business

· and how and why they buy etc.

and then using these information pieces to build valuable, relevant content for the target audience on a channel or the channels where they are present.

This can be done with little to no money (of course being able to promote these content pieces and reuse the ideas in ads is a major plus) and doesn’t need a lot of people.

We have done this multiple times for clients before.

That’s it for today…

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Happy learning! ❤️

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