I have found coins down the back of the sofa. Sometimes, even, the exercise returned enough value to compensate for the need to wash and sanitise my hands afterwards.
What about in business? Is it possible to find money down the back of the sofa? What is the metaphorical sofa for a business?
I believe that this metaphorical sofa is in fact your CRM (Customer Relationship Management) solution – that safe place for customer information is where you will find money. Potentially lots of it!
I have recently been undertaking a marketing audit. While a little bit of a cliche, it holds true that to know a more certain way forward, you need to know how you got to where you are. It was through investigating this historic data that I put my hand down the back of the sofa and found a sizable wad of notes. OK, the money isn’t in actual sales, it is not readily accessible revenue, but what I found was information about potential revenue that was in easy reach of the company, but that became hidden and lost within the CRM.
The point is that a CRM holds a lot of data. Typically a business will rely on it for the NOW, to manage the sales due this month, may be even next month. For businesses seeking growth, however, it holds more than that – clues to where serious growth will come from and knowledge of what small actions will begin to deliver quick wins. With imaginative exploration, your CRM might just be the metaphorical sofa packed with money that is waiting to be realised.
With this in mind, here are three reports that I believe essential to defining a growth-focused Marketing Strategy:
1. Revenue by Lead Source (including ROI)
Before you invest more money in a marketing channel, you have to be in a position to know that it has previously generated income and link this to a cost. This Return On Investment should guide the selection of Marketing tools and technologies deployed.
2. Lead to Opportunity Conversion Rate
Leads are one thing, Opportunities are often something else. Typically Marketing teams are responsible for Lead generation and Sales teams are responsible for Opportunities. There is a constant divide between the two teams where 80% of Marketing generated Leads are rejected by Sales, and the Sales team is blamed by Marketing for dropping Leads… I digress. The important thing to understand is what Leads make good Opportunities.
3. Closed as Won Rate
The final report covered here is simply the final conversion rate in the sales process; the quantity of won Opportunities divided by the total quantity of Opportunities multiplied by 100. This completes the beginning analysis of a Marketing Strategy.
With these reports in place you should be able to work backwards:
How many sales are required to deliver the turnover desired?
How many Opportunities are required to deliver those sales?
How many Leads are required to deliver those Opportunities?
How much will that cost?
By putting data to work, you can build an effective Marketing Strategy that is based on capability and realistic expectations and not on wishful thinking or unfounded ambition. In the short term, running these reports will give you a stock take on your activities and give you the confidence of carry on or the opportunity to stop losing money. As far as the ‘Money down the back of the sofa’ metaphor goes, there are other reports that can give even greater value. However, the reports listed here are surprisingly under used and still valuable! If you know where good and profitable business comes from, why wouldn’t you scale up efforts in that direction?
Of course, a Marketing Strategy is more than just this exercise, it needs to understand the persona of your customer, the make-up of your product, its positioning, your competition and much more and be shaped around a business objective greater than a sales value. That’s where Marketing specialists demonstrate their worth.
If you wish to explore the current state of your Marketing activities or are considering deploying an ambitious Marketing Strategy, get in touch, I’d like to help.
Paul Cranston is Marketing Services Director at Headway Marketing, an agency specialising in high-growth B2B Marketing Strategy. Comment, sign up for more or connect on LinkedIn.
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