The primary role of marketing is often associated with ‘building the brand’ via developing and executing programs and tactics to fulfill that objective.  The more valuable the brand becomes, the more you can sell or charge for it.  To validate these brand building efforts marketers will field exhaustive U&A studies (usage and awareness) plus a host of other semi-quantitative studies.  If the numbers are good marketers will say, “we’ve done our part, now it’s up to sales to do theirs.”

This is particularly true in B2B.  Here, sales cycles are longer.  Investments are higher.  Marketing budgets are limited.  Silos are still quite strong.  (Even consumer-oriented firms will not achieve the full value of the opportunity unless their B2B infrastructure is maximized.)

So, those evaluating B2B marketing success solely through brand research, and rewarding marketing based solely on positive research results, have been duped.  Worse yet the marketers are duping themselves.  When marketing success is solely based on research it’s grasping at straws and it becomes very easy to get downsized, rightsized, optimized and any other form of cost containment that the CFO finds important.  Research is not real.

Revenue is real.  Marketing must be held accountable to numbers just like every other department.  Unless you can prove value beyond semi-annual brand research, marketing will not be a key, integrated, relevant component of a company’s long-term success.  Marketing must show results.  It must show value to the bottom line.  It must add up.

For B2B, I believe the formula to marketing success is:

Gross Revenues = A x E x O x C

A =   Awareness level (among target audience)
E =   Expertise (perceived)
O =   Opportunities (new business)
C =   Conversion rate (of new business opportunities)

Improve one factor and gross revenues go up.  Improve more than one…  While other factors certainly exist, these are the biggies.  Ignore the biggies and suffer the consequences.

The beauty here is that these numbers are measurable and the formula is simple.  Those reading my blog know my POV on relevancy.  To me, well-optimized brands are a function of awareness (‘who you are’) and perceived expertise (‘why you matter’).  Unless both are optimized, gross revenues will not.

Generally speaking, most firms’ awareness levels (A) are pretty well-established.  If you’ve been in the market for a minimum of five years, the market has accepted you and you’re known.  The market knows who you are, what you do, how to contact you, how much you cost, and have an opinion of what makes you better or worse.  This is great!  Further investments in awareness efforts (ads, redesigned trade booth, etc.) will not yield the gross revenue results you desire.

Expertise (E) is also a manageable factor, but one that is rarely leveraged.  The higher you elevate E, the more you dimensionalize your awareness with real value and the more gross revenues you generate to the firm.  When A and E are optimized, more opportunities (O) naturally arise in the form of referrals, qualified inbound leads, trade meetings, etc.

This is what marketing should be doing each and every day.

The fourth factor (C) can also be managed.  Converting leads into revenue is sales in the purest form.  The more sales can improve their closing rates, the more gross revenues go up.

In an ideal world, sales and marketing work closely together to drive gross revenues.  In the real world however, corporate cultures often keep them apart.  In these cases, A & E reside in marketing while O & C in sales.  When awareness levels are already strong — focus on expertise.

Then let your CFO do the research.  Did gross revenues go up?  Research can deceive.  Numbers cannot.  When the CFO is happy, everyone is happy!