Tuesday, April 7, 2009

Adding Revenue Contribution To ROI Measures Connects Marketing to Real Dollars


By Chris Frank, Director of Marketing, TreeHouse Interactive

There’s an old saying about marketing: “Marketing is the last in and first out.” What this means is that marketing is often the last team brought on at a company and the first to leave. It’s a scary thought in this economy. Maybe that’s why several conferences I’ve attended over the past year talk to the growing executive mantra of “accountability” when it comes to marketing and the need to show return on investment (ROI).

How do you measure your revenue contribution though? Fortune 500 marketing VPs often tout the success of multi-channel campaigns that have microsite, nurturing, and layered campaign elements. They recount measurable success that resulted in X more dollars to the company. Complex campaigns with real ROI metrics behind them. What they fail to mention, more often than not though, is the massive marketing team they have behind it—pulling it off.

Using technology to prove hard-dollar ROI to your executive team is essential, regardless of whether you sell B2B, through partners, or online. Without it you’re left helpless to address the trickle-down “accountability” mantra, secure more marketing funds, or focus your efforts against larger competitor marketing. Demand generation solutions can level the playing field in this respect. What you quickly move from is not just the ability to acquire leads like you can with any email service provider (ESP) solution, but the ability to qualify and distribute leads intelligently for your sales team—collecting hard ROI data as it moves from opportunity to close.

If this demand generation concept makes sense to you, then let’s add the following ROI metrics that you should be able to report on to the mix:

* Hard dollars for business closed as a result of your campaigns
* (B2B, partner, and online sales models)
* Hard dollars still in the pipeline as a result of your campaigns
* Total cost per click for your email campaigns (primarily online sales models)
* Total revenue per click for your email campaigns (primarily online sales models)
* Collected hard dollar results for multi-channel campaigns

There is a paradigm shift in how marketing teams are measured. Now there needs to be a shift in what marketing teams are able to deliver. By being able to measure what your exact results are—in dollars—for campaigns, you can demonstrate your team’s value to executives and more competently make decisions about future marketing projects. You can also secure the budget necessary to execute on these projects.

While the concept of going beyond simple email marketing to demand generation may be apparent, but hard to implement for some, the importance of doing it right to get at real ROI is even more important. Otherwise, you’re left with the same fuzzy value marketing often claims they contribute to a company’s bottom line.



Chris Frank is the Director of Marketing at TreeHouse Interactive, a provider of SaaS solutions for partner relationship management (PRM), sales force automation (SFA), and demand generation. Mr. Frank has also served in a variety of director and consultant roles over the years. Specialties include everything from demand generation and PRM to eCommerce.

1 comment:

Kris said...

When it comes to Partner Relationship Management topic I always don't get it. But with this post. I kinda understand it very well. Great explanation.