Is the labor shortage making it difficult to add to your sales team? Build an effective marketing system. In addition to attracting more potential customers to your business, a benefit can be doubling the size of your sales team – by finding or hiring a salesperson.
Your sales team shouldn’t be acting as a marketing department. If your sales team is trying to build their pipeline, they’re not performing at their highest, most productive use.
The term âsalesâ does not necessarily refer to the traditional promotion of products that you might be considering. The sale can be very high end, especially when it comes to referring to a valuable service.
For example, suppose you need a litigator to handle the breach of a non-solicitation agreement or an accountant to calculate your business’s cost of capital. In this case, the “seller” is the service provider. When the service is highly specialized, it is not uncommon for the seller and the professional to be the same.
The traditional importance of a marketing campaign is to increase revenue growth. It is essential to know whether your company’s marketing efforts are improving its results. Your Return to Marketing (ROM) is used to justify budget allocation for current and future campaign efforts.
ROM calculations help a business attribute revenue growth to the impact of a marketing initiative.
An essential part of measuring ROM is determining a baseline against which to measure the success of a campaign. You can use this information to determine the dollar value of the campaign effort and better identify the best combination of analog (offline) and digital (online) campaign efforts. If you find some successful campaigns and some not, you don’t need to delete the bad ones. Once you’ve identified the losers, you can apply the lessons learned from top performing campaigns to increase your overall ROM.
A stagnant or declining ROM lets you know that you are not using a medium that is reaching your target audience or that your message is not resonating with them. You don’t want to ignore the red flags that suggest you change course.
The authors of “Freakonomics”, Steven Levitt and Stephen Dubner, are sometimes hired by large companies to help them think outside the box. The Steves worked with an unnamed national mattress company to help them rethink their messaging and ad placements.
For more than a decade, the mattress company’s primary advertising medium was a weekly insert in the Sunday newspaper. When the Steves called on management to stop those ad placements and direct marketing dollars elsewhere, there was an uproar; management would ignore it. Once, a new employee nearly lost his job because he hadn’t placed these ads for about a month.
The Steves asked if the lack of data was affecting sales, but management had never followed that information. The Steves found no effect on sales. But, it was the reaction that was more important than the data. It is crucial to review the ROM of campaigns that have become a habit.
Each industry has its most relevant metrics. Don’t let the marketer cloud the conversation with terms like website visits or impressions. You know what is essential: sales.
Marketing isn’t just about driving new leads to your website; it’s about converting them into transactions. You should ask your marketing team for monthly, or even weekly, results: number of leads, how far in the sales cycle, and which leads are closing, for example.
The concept of ROM is no different from measuring return on investment (ROI). You measure the return on marketing (or investment) against the cost of marketing (or investment).
The equation is: (sales growth – marketing cost) / marketing cost = ROM.
If sales increased by $ 100,000 and your marketing costs were $ 25,000, then your ROM is 300% ($ 100,000 – $ 25,000) / $ 25,000 = 300%.
This classic equation contains a false assumption – that all sales growth was attributable to a marketing campaign. For ROM to be meaningful, you need more than a snapshot. You need to track sales over time and measure the growth that occurs during a campaign.
Suppose you track sales for 12 months before running a marketing campaign and find your organic growth was $ 30,000, then the math looks like ($ 100,000 – $ 30,000 – $ 25,000) / 25,000 $ = 180%.
More than one marketing company will tell you that a “good” ROM is 500% and anything below 200% is considered unprofitable because of the costs of producing and distributing the goods and services. I object to this rule of thumb because recurring income should be treated differently from recurring or transactional income. Additionally, some companies are exceptional at delivering value at a low cost to the business.
The measurement can become more precise, especially given the tools available for gleaning information – tools like Google Analytics, Cyfe, Hotjar, Semrush, and MSights.
A review process to track success rates will allow you to determine whether you should change campaigns, abandon or modify a struggling campaign, or hire a new marketing team.
Skillful marketing not only increases revenue but also streamlines your pipeline of leads so that your salespeople / service providers don’t waste valuable time in their day.
Marketing helps a business become more efficient because it allows its sales team to filter the pipeline. Salespeople then only talk to prospects who match your ideal customer profile, instead of talking to people they can’t help.
Suppose your sales team members are currently closing half of their leads. This will help them close runs, as they won’t waste their time on unqualified leads. Instead, they will be in front of optimal prospects. Effective marketing is better than hiring additional salespeople because it keeps costs down and saves you the trouble of training new employees.
Conventional measures of the success of marketing efforts focus only on increasing revenue. They don’t measure the value of protecting the best members of your team from unproductive and disruptive meetings. In addition, administrative staff do not have to schedule these meetings and take calls when they might be more useful for other support activities. It makes all parties more meaningful, their jobs become more enjoyable, and the employees and the business flourish.
If you don’t have a marketing campaign yet, start small, maybe 2% of the income. Then you can grow when you find success. You can test your way to profitable ROM and happier employees.