Many business leaders look at the marketing department as a “nice to have” or even consider it simply a “necessary cost center.”
At our B2B marketing agency, we believe that the marketing department plays a critical role in lead generation, nurturing prospects, and even closing deals.
In this blog post, we provide guidance on how to evaluate the value of your marketing department.
What is a revenue center?
A revenue center is a department that increases profitability or helps to grow the client base for an organization.
Traditionally, the sales department is seen as the only revenue generator in a company. However, when you consider that the marketing department oversees inbound marketing, content marketing and key messaging that drives leads and conversions directly on the website, the marketing team is often generating revenue as well.
How does a marketing team generate revenue?
There are a number of ways that a B2B marketing team generates revenue, including:
- Driving Leads
- Nurturing Leads
- Converting Prospects to Clients
- Retaining Clients
- Upselling Clients
Often, these activities are associated with sales, but today, these activities are often shared by sales and marketing and/or done in tandem. A marketing department has a variety of different channels available to perform these activities, including outbound marketing (direct mailings, radio ads, and print ads), inbound marketing (search engine optimization of a B2B website, blogging, and paid search ads), and event marketing (tradeshows, conferences, networking events, and client events).
If you don’t think your marketing department generates revenue, imagine trying to make sales with the following:
- No website or a poorly designed website with unclear messaging
- No email or direct mail campaigns
- No collateral or presentations that outline your value proposition for your sales team
How can marketing revenue generation be tracked?
The key to determining the value of your marketing efforts is to track all marketing activities. Regardless of whether a lead comes in through your website, a direct mail campaign, print ad, search engine ad, blog post, or networking event, it’s crucial to determine where that lead came from. Tracking lead generation from each channel varies, but there is often a way to trace it back to a particular campaign or activity.
Attribution to a lead source is beneficial in determining where leads come from but also the quality of leads that come from that source. For example, many inbound B2B website leads are typically farther along the sales process than those in a cold-calling campaign. Ideally, you will sit down once a month to review the leads generated for the previous months and the status of that lead. For many B2B companies, leads often take months to close, however, there may be status changes or progress toward a closing (such as demos, proposals, proposals to the C-suite, trials, negotiations, etc.).
What is the value of marketing to other internal teams?
As you consider the real value of your B2B marketing efforts, it’s important to consider not only the revenue generated by the marketing team but how the team impacts other departments in the organization. Here are a few other questions to consider:
- Does your marketing team drive inbound leads that boost revenue for the sales team?
- Is marketing streamlining lead nurturing processes through automation that enable the sales team to be more efficient?
- Does the sales team handoff MQL’s that are ready to talk to a salesperson (aka making that salesperson’s job easier?)
- Are the marketing efforts producing content pieces, like informative blogs, guides, and case studies, that educate prospects and move them along in the sales cycle?
- Does the marketing department vet inbound leads and disqualify leads that aren’t the right fit?
When the marketing team is enabled to work in tandem with the sales team, they not only help generate more revenue, they help save time on wasted activities, improve closing rates, and help to retain current clients or upsell existing customers.
When evaluating the value of your marketing team, it’s essential to not just consider the cost or the spend of marketing activities but to consider the incremental and additional revenue generated. In many cases, the marketing team is generating far more revenue than the allocated marketing budget.