Many companies are focused on revenue now and may not realize without investing some money in Upstream Marketing they may not be able to be effective at selling today. Stated simplistically, Marketing is the process of creating demand, Demand with a Capital D, and Sales is about filling it. It’s important to properly allocate your budget across both functions.

If you have more qualified prospects and customers than Sales people to fill those orders, then you may need to invest more in sales. However, if you are having a hard time identifying and acquiring qualified prospects, keeping customers and growing the value of your customers, then you need to invest more in Marketing, both Upstream and Downstream.

In his book “Profitable Growth is Everyone’s Business,” Dr. Ram Chara, who has taught at Boston University, Northwestern University and Harvard’s Business School, explains the difference between upstream and downstream Marketing.

Upstream Marketing, Dr. Chara says, refers to “the strategic process of identifying and fulfilling customer needs.” He posits that developing clear customer segments along with analyzing how the customer uses the product or service and what competitive advantage will be required to acquire the customer is the focus of upstream Marketing.

Dr. Chara defines downstream Marketing as efforts, such as advertising, promotion, brand building, and other forms of communication and engagement such as PR, events, and content. He proposes that the purpose of these efforts is to motivate customers to adapt existing products and services.

Downstream Marketing supports your company’s value proposition. Upstream Marketing defines your company’s value proposition. Downstream Marketing delivers programs to support product adoption. Upstream Marketing directs the innovation process to ensure long-term sustainable growth. Clearly, you need both.

18 Questions to Help You Assess Whether and Where to Invest in Marketing and Sales

If you’re wondering whether you are investing enough in Marketing, take a stab at answering these questions. Based on the answers it may become clearer as to where you need to invest and the impact it will have on your budget.

1. How strong is your value proposition? How does your company create value for your customer?
2. Are your name and logo easily recognizable?
3. Do your target customers understand what you do, the problem you solve, and how you solve it better that the alternatives?
4. How do your current customers rate your products, services and their overall experience with your company?
5. How do your competitors’ customers rate you? Do they see you as a force to be reckoned with?
6. How well are you known within your ecosystem?
7. What is your company’s current market share? Are you considered a player?
8. What are your key performance indicators of success for your company, such as customer renewal rates, footprint expansion, share of preference, etc.?
9. Which of these will have the greatest impact on your success next year, direct customer contact or improvement in market traction and penetration?
10. Based in your metrics for success, such as product adoption, pipeline contribution, win rate, and so on, how well is is your marketing and sales performing against these metrics?
11. Which markets exist that are currently going untapped due to lack of resources? If so, where are these markets? What size are they? Are they profitable? Are they accessible?
12. How many qualified opportunities are currently in the pipeline? Are there enough to drive your customer acquisition and revenue goals?
13. What would additional resources (people/money) bring in gross sales and margin? How would more people impact the conversion of these prospects to customers
14. How effective is your current sales staff in converting prospects to customers?
15. How much reach/penetration into your customer base does the current sales staff have?
16. Which is a greater priority for your organization in the coming year, growth or retention?

You’ll probably think of some others once you get going. Once you have everyone’s answers, compile the results (keep answers confidential). Review the information together and discuss what makes the most sense in terms of allocating the budget, does Marketing or Sales need a greater portion of the investment or is a more equal distribution in order.  Then together build consensus on where to invest and develop an action plan that takes a customer-centric approach to aligning both functions and establishing a budget that enables both to be successful. Consider employing an external expert facilitate this process.

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