White Paper. Marketing s Role in Outperforming the Fortune 500

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1 Marketing s Role in Outperforming the Fortune 500 Increasing Marketing s Relevance to the Bottom Line March 2013 Increasingly, Chief Marketing Officers (CMOs) are being held accountable for revenue performance. According to a recent Forrester survey, the ability to demonstrate the revenue return on marketing investment (ROMI) is the leading concern of business-to-business marketing executives. 1 In another survey, the majority (66%) of marketing executives who responded cited revenue growth as the top goal driving their strategies. 2 1 B2B Marketing Organizations And Investments Survey. Forrester, handholds_for_b2b_marketers_on_the_slippery_slope_to_cost_center 2 Sales and Marketing Alignment: The New Power Couple. The Aberdeen Group

2 Unfortunately, most marketers still lack the technology tools and repeatable processes that would enable them to play a more direct role in driving revenue. Like the runner on the third leg of a relay team, they pass the baton or the lead to sales and are functionally left behind, unable to meaningfully impact the close of the race from that point forward. What happened to the lead? Was there a misstep on the way to the finish line? Could marketing have given sales a boost? Did the opportunity convert to a sale? Deliver the expected return? The same analogy can be applied to marketing materials destined for front-line sales. Once sales tools leave the hands of the marketing department, there is, in most companies, scant opportunity to guide their use or learn from their performance. It s like the old joke about the shipbuilders in Belfast who built the Titanic. Asked to comment on the sinking, one of them said, Well, the ship was fine when it left here. In marketing, as in shipbuilding, the success of the exercise cannot be measured by the boat or the lead or the brochure itself, but how effectively it gets you where you want to go. And in marketing today, that destination has to be revenue growth. When marketing and sales join forces The sad fact is that 70% of revenue growth initiatives sink and one reason, we believe, is the ongoing disconnect between marketing and sales. When companies are able to bridge that gap and bring the full force of their marketing and sales savvy in synch to the marketplace, what is the effect on revenue growth? That s what we wanted to know in commissioning a survey of more than 500 executives at 125 companies that use sales enablement methodologies, including ones that enable a tight collaboration between marketing and sales to drive revenue. How did these companies which spanned a range of sizes ($100 million to $5 billion in annual sales), industries (high tech, life sciences, software, manufacturing, and communications, predominantly) and included such well-known names as Cisco, ADP, Medtronic, The Principal Financial, Philips Healthcare, and Autodesk rate themselves on more than 250 sales enablement factors and how did that rating correlate to their revenue performance over time? Here s what we found. The control group was the Fortune 500. Over the past decade, Fortune 500 companies have posted an average year-over-year growth rate of 7.8%. 3 3 Fortune 500 and CNN Money. This number was adjusted to account for the cataclysmic effects of 9/11 and the 2008 economic collapse to reflect a typical growth rate. 2

3 The totality of SAVO customers practicing sales enablement, as measured through the survey, have an average annual revenue growth rate of 11.3%. Those SAVO customers identifying themselves as high-maturity performers in sales enablement have an average annual growth rate of 15.3%, which is nearly double that of Fortune 500 companies. Companies that practiced sales enablement out-performed the Fortune 500 by nearly four percentage points on average. And the 20% that felt their sales enablement practices were highly mature had an average revenue growth rate that outpaced the Fortune 500 nearly two to one. Obviously, many factors go into business performance but few, we would argue, are as directly impactful as the quality of the conversations that consistently take place between sellers and buyers. Marketing organizations that make it a priority to enable their sales teams are clearly playing a key role in accelerating revenue growth. What do they do right? Sales enablement covers a wide range of activities. The survey asked respondents to rate their company s prowess in nine different domains of sales enablement: 3

4 What separated the top performing companies the 15.3 percenters from the rest? What are they doing differently or better than their peers in terms of the marketing side of sales enablement? Here are some of the key differences. 1. They don t go to market on gut instincts alone. A common characteristic shared by successful companies in every sector is that they are learning organizations -- continuously soliciting and using experiential data to improve their ability to reach growth objectives. In our survey, the top performers were distinguished by an insistence on applying key performance indicators (KPIs) to measure whether go-to-market strategies were successful in driving sales. This includes such metrics as percentage to quota, win/loss percentage, and early pipeline lead conversion rate. Revenue-oriented marketers verify whether something works or they don t use it again. Marketers in these organizations are also more likely to: Monitor the marketing tactics of competitors and leverage successful ones to their own benefit to drive demand. Align demand creation targets with sales pipeline requirements so that marketing and sales are in step. This aligns with an Aberdeen study that showed that over 90% of best-in-class companies believe marketing should have a strong understanding of sales goals They repeat successful strategies. In some organizations, marketers feel pressured to be creative and do something different every time whether developing a marketing campaign, lead generation program, or sales tool. Innovation has its place but the most successful marketing organizations take the time to capture which strategies work and disseminate those best practices to the sales force at large. In addition, they have mechanisms in place to: Measure the success of sales enablement programs and analyze pipeline attrition for clues on how to improve sales strategies. Use technology to automatically capture seller usage behaviors and feedback. 3. They value content customization so highly, they automate it. Every marketer knows the depressing statistic: 90% of marketing deliverables are ignored by sales. And the scary corollary: Salespeople spend hours a month creating their own tools. Rather than bemoaning this fact, successful marketing organizations recognize that content customization is a good thing because it leads to personalized, focused and compelling customer conversations that move the sales needle. Instead of creating a static bill of materials, they put the framework in place to: Automatically push meaningful content to sales materials that are easy for salespeople to customize to their exact needs. Align sales messaging to different stages in the sales process to increase the likelihood of success. 4 Sales and Marketing Alignment: The New Power Couple. The Aberdeen Group

5 4. They personalize new product introductions (NPIs). If there is ever a time to go big and go generic with marketing materials, it s at new product introduction time, right? Wrong. Many marketing organizations make the mistake of inundating the sales force with everything they need to know while high performers follow the mantra of only what you need to know, when you need to know it. They put mechanisms in place to: Make sure NPI material and training is relevant to the sales opportunity and is in front of sellers when they are most receptive. Provide sales materials and tools well in advance of new product launches so that sales can become comfortable in using them. 5. They control brand and legal compliance without stifling change. It s important to keep sales materials within brand and legal guidelines to achieve maximum bang for your marketing buck and manage risk. But the accessibility of digital communications has made governance difficult. Top performing marketing organizations: Maintain sales materials in a centralized, structured digital environment that allows automatic updates to branding and legal language as needed by authorized users Lock down branding and legal elements while giving sales the freedom to adjust and tailor noncompliancy content as they wish The power of marketing to accelerate sales and revenue In highly successful companies, marketing is tightly and visibly woven into the revenue generation process. The high performing marketing organizations in our survey have transitioned from primarily producing things (brochures, PowerPoints, leads) to becoming sales enablers through dynamic involvement throughout the sales process. It s a true collaboration fed by mutual gain: marketing pushes needed content and training at the right time to help reps win sales, and reps provide continuous performance feedback to help marketing refine their efforts. Sales and marketing become better and better at what they do and stellar revenue growth follows, as our survey shows. Any company your company can harness the power of sales enablement to achieve its growth initiatives. Learn more by joining our Marketing: Enablement webcast, taking place on April 16 th Register today to learn the value of Smarter Selling. 5

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