Marketing is a Strategic Partner
With so much emphasis on the execution of marketing activities and supporting the Sales organization, it’s possible to forget that Marketing plays a far more important role. Peter Drucker is attributed with saying that ―Business has only two basic functions – marketing and innovation. Why is Marketing so important? Perhaps the answer lies in Phil Kotler’s point of view that:
Marketing has the main responsibility for achieving profitable revenue growth derived from acquiring and retaining profitable customers.
If you subscribe to this thinking that Marketing must act as a strategic partner to the leadership team.
Marketing Owns Far More than Revenue
Yes, Marketing jointly and equally shares the responsibility for generating revenue with our very important partners in the Sales organization. That being said, I must confess I am confused by the recent emphasis on Marketing being focused on revenue. We now have blogs, websites and roadshows dedicated to the topic of Marketing and revenue, but hasn’t Marketing always been focused on revenue? I mean, isn’t that the job, growing the top line? Did I miss something over the past 30 years?
Maybe the reason for the recent surge is that so many marketers have focused on generating awareness and leads without real clarity around how investments in these efforts drive revenue. Today’s executives expect more than awareness and a higher number of qualified leads from Marketing – they want Marketing to create value and accelerate growth. They want Marketing to be able to communicate how it is relevant. Perhaps, the microscopic scrutiny on Marketing that has put Marketing in the hot seat has also brought the topic of revenue generation into sharper focus. Marketing must focus on far more than revenue to sustain the organization for the long-term.
Zoom in on Customers
But here’s the rub and the trap. As a marketer, when was the last time you marketed to a bucket of revenue? This is not the question you should ask. The questions to ask are: how many customer “deals”, both net new and additional business from existing customers, constitute this number? And how many of these is Marketing expected to drive? Why? Because as marketers our job to help the company acquire, keep and grow the value of profitable customers. This approach allows Marketing to help the organization take a customer-centric approach rather than focus on an internal revenue number.
To make this approach work, Marketing needs to translate the revenue number into how many customers and which ones. Ideally, marketing should be informing our respective organizations which customers and prospects to target, because as marketers, we are the ones who are supposed to identify the best customers and market opportunities from our customer and market segmentation and sizing efforts.
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.
Now as a marketer, you can go about setting marketing key performance indicators and program performance targets that will enable you to measure Marketing’s 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 Marketing will generate, you will need to know the typical sales cycle type and cost to acquire a net new customer for this business unit. This information can then be used to establish a target number for marketing qualified leads, the cost per lead, and a target conversion rate for how many of these will be accepted by sales. And before you establish these numbers, you will most likely want to set a performance range for how many customers/prospects a program will enable you to connect with and a target conversion rate and cost for these.
Driving revenue for the business takes working with 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 creating a marketing organization that is relevant, can measure its value, and, more importantly, affect revenue.
What do you think? Do we need a return to the fundamentals? Or are you as surprised as me about all this talk about something that should not need to be said? What do you think is happening to our profession? We would love to hear from you!
FAQ:
A: Because Marketing and innovation are foundational business functions, and Marketing holds primary responsibility for profitable revenue growth by acquiring, retaining, and expanding profitable customers—making it a leadership-level discipline, not a support role.
A: Marketing shares revenue responsibility with Sales, but long-term success requires Marketing to create value, accelerate growth, and demonstrate relevance—not merely generate awareness or leads without clear linkage to business outcomes.
A: Many organizations historically emphasized awareness and lead volume without clarity on how those investments translate into revenue. Increased executive scrutiny has raised expectations for Marketing to prove contribution and impact.
A: Marketing does not market to a “bucket of revenue.” Revenue targets must be translated into customer deals—net new and expansion—and into how many (and which) customers Marketing is expected to influence.
A: Start with customers: identify the best customers and market opportunities through segmentation and sizing, then build strategies and programs to connect, increase consideration, and motivate conversion.
A: The number of customers required, typical sales cycle, and cost to acquire a net new customer—so Marketing can set realistic targets for MQL volume, cost per lead, acceptance rates, and conversion rates.
A: “Do the math” from customer deals backward: define required customer outcomes, then set performance ranges for reach/connection, conversion rates, cost targets, and downstream Sales acceptance—then track and report performance to those numbers.
A: Marketing becomes more relevant, can measure and prove its value, and can more directly influence revenue—because it aligns strategy, segmentation, programs, and performance management to customer acquisition, retention, and growth.
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If A=B and B=C, then A=C. Marketing ‘pros’ forgot Marketing (A) leads to revenue (C) and one way is through customers (B). Everything seemed to shorten during the last twenty years. Venture Capitalists, social media, and internet companies were sold on the idea of building a base was the goal for so long that they forgot why.
Recent stories about Amazon’s revenue growth without profitability and the entire technology bubble showed how B does not always equal C. A huge customer base without revenue ends up being ‘B’ologna.