My first professional jobs were in sales – selling financial services, office supplies, and software. I literally carried a bag. In two of the cases, I owned Marketing as well. One of my first mentors, an accomplished salesperson who regularly exceeded his quota, told me, “It’s just math. Whether you are on the Sales side or the Marketing side, it’s a matter of working the numbers; they may be different numbers, but at the end of the day, the numbers are what bring in the revenue.”

Now over 30 years and many deals later, I can say there is still a great deal of truth in this advice. Marketers and salespeople are both on the demand side of the equation. Marketing jointly and equally shares the responsibility for generating value and revenue with our very important partners in the Sales organization. Phil Kotler articulated the responsibility of Marketing to achieve profitable revenue growth derived from acquiring and retaining profitable customers in his 1999 book, Kotler on Marketing: How to Create, Win, and Dominate Markets.

Marketing’s Role in the Revenue Equation Needs to be Customer-Centric

Many marketers today are focused on the “work of Marketing.” Their numbers are related to Marketing activity and output, such as open rates, click-through rates, downloads, shares, mentions, and so on. The math calculates awareness and qualified leads. Today’s executives expect more than awareness and a higher number of qualified leads from Marketing — they want a measurable return on their Marketing investment, and they want Marketing to be able to communicate how it is relevant. The microscopic scrutiny on Marketing that places Marketing in the hot seat, and brought the topic of Upstream Marketing into sharper focus.

But here’s the rub — and the trap. As marketers, we don’t market to buckets of revenue. Focusing on revenue is an internal point of view. The job of Marketing is to help the company be customer-centric and to focus on what customers need and want, how to engage them, and how to create the best customer experience. The questions that marketers need to ask are those of how Marketing helps the company acquire, keep, and grow the value of profitable customers:

How many customer “deals” — both net new and additional business from existing customers — are needed to achieve the revenue target?
How many of these is Marketing expected to drive?

Armed with information about the state and size of the target market, their needs and wants, and how our offer best meets these needs and wants, we can develop strategies and programs designed to connect with these customers, increase and accelerate their consideration, and motivate their conversion to purchase.

Marketers should focus on counting customers — Marketers should focus on customer-centricity

Customer-Centric Marketing Math

Key Performance Indicators (KPIs) are a primary variable in Marketing math. Without these, it is nearly impossible to connect marketing to the revenue equation. As a marketer, you must set KPIs and program performance targets that will enable you to measure your value and impact on revenue. For example, let’s say you need a certain number of net new customers for a business unit by the end of the year. Before you can set a target for the number of customer deals that Marketing will generate, you will need to know the typical sales cycle type, the average deal size, the typical conversion rate of opportunities to deals, and the cost to acquire a net new customer for this business unit.

This information can then be used to establish a target win rate number for Marketing generated opportunities, the cost per new customer, and the potential Marketing generated revenue. Because in most companies, Marketing doesn’t negotiate the final contract, the important number is the win rate, the actual number of customers acquired, and not the revenue number. With the back end of the equation, you can now work the front end of the equation and set a performance range for how many customers/prospects a program must engage, and a target conversion rate and cost for these.

Driving revenue for the business means working the numbers, then tracking and reporting on the performance to the numbers. Taking a customer-centric view rather than an internally oriented revenue-centric view, and “doing the math” facilitates the creation of a Marketing organization that is relevant, can measure its value, and more importantly, positively impact revenue and growth. A good Marketing plan starts with customer-centric math as the basis of Marketing objectives and Marketing KPIs. Use our patented Accelance® application to build your customer-centric Marketing plan.

FAQ:

(written by Penn of Sintra.ai)

Q1: What does “Marketing is just math” really mean?
A: It means revenue performance is driven by measurable inputs and conversion rates—whether you sit in Sales or Marketing. The specific numbers differ (pipeline, engagement, conversion, win rate, CAC), but the discipline is the same: work the numbers, manage to targets, and track performance against them.

Q2: How does Marketing share responsibility for revenue with Sales?
A: Marketing and Sales are both on the demand side of the equation and jointly share responsibility for generating value and revenue. Marketing’s responsibility is profitable revenue growth derived from acquiring and retaining profitable customers—an idea articulated by Philip Kotler in Kotler on Marketing (1999).

Q3: Why is a purely revenue-centric focus a trap for marketers?
A: Because marketers do not market to “buckets of revenue.” Revenue is an internal point of view. Marketing’s job is to help the company be customer-centric—understanding what customers need and want, how to engage them, and how to create a strong customer experience. A customer-centric view is what enables sustainable revenue performance.

Q4: What customer-centric questions should Marketing ask to connect to the revenue equation?
A: Marketing should focus on how it helps the company acquire, keep, and grow profitable customers by asking:

How many customer deals (net new + expansion) are needed to hit the revenue target?
How many of those deals is Marketing expected to drive?

Q5: What inputs are required to do “customer-centric marketing math”?
A: Before setting Marketing targets tied to customer deals, you need to know:

Typical sales cycle type/length
Average deal size
Conversion rate of opportunities to deals
Cost to acquire a net new customer (CAC)
These inputs enable realistic performance targets and accountability.

Q6: Which KPIs help connect Marketing to revenue without over-claiming revenue?
A: In many organizations, Marketing does not negotiate the final contract, so the most meaningful KPIs are those that reflect contribution to customer acquisition and deal outcomes—especially:

Win rate of Marketing-generated opportunities
Number of customers acquired (net new and/or expansion)
Cost per new customer
Marketing-generated opportunity volume and conversion rates
Revenue can be estimated, but the operationally accountable measures are wins and customers acquired.

Q7: How do you work from the “back end” to set front-end program targets?
A: Use the required customer deals and conversion assumptions to set targets for Marketing-generated opportunities (and win rate). Then work forward to determine how many prospects must be engaged, what conversion rates are required at each stage, and what cost ranges are acceptable for programs and channels.

Q8: What is the outcome of doing the math with a customer-centric lens?
A: It enables a Marketing organization that is relevant, measurable, and aligned to growth—because it sets outcome-based Marketing objectives and KPIs grounded in customer acquisition and retention realities, not just activity and output metrics.