9 steps to calculate your sales and marketing ROI

You may be wondering how to calculate your sales and marketing ROI. If you are not a sales manager or unfamiliar in setting sales targets this might be of value to you, especially if you are used to marketing metrics and ROI only.

For a fully aligned sales and marketing approach, you need to ensure that the ROI and metrics you are using make sense. The accountability of marketing to sales AND sales to marketing needs to be agreed upon as a vital component of the overall strategy.

We believe the only real way to ensure the sales and marketing ROI is tangible is to measure common metrics. To start the process, reverse engineer your sales objectives and flip your full funnel upside down from your desired sales (bottom of funnel) first right through to marketing (top of funnel) to determine the required marketing budget and lead activity required to help achieve your sales target.


1. What is your sales target?

What is your annual revenue target for the financial year? This can be broken down into annual, quarterly or monthly measurement for tracking.

2. What is your required sales pipeline?

Depending on the product and services you are selling, from historic performance and average trends, how many qualified deals do you need in your pipeline at any one time to reach your sales goals?

A typical rule of thumb is 3x to 5x times pipeline value in order to reach your sales quota.

3. What is your average sales cycle?

How long does an average sale take to close?

4. What is your average deal size?

What is the average dollar value of your typical sale for your product or services?

5. How many proposals and quotes do you need to deliver?

Simply divide your sales revenue by the average deal size to get an estimate of how many quotes/proposals you need to send out.

6. How many Sales Qualified Leads (SQL) do you need?sales-marketing-alignment

The definition of a SQL is based on what your sales team will accept as a qualified lead

Typically we work off a 3x times ratio for SQLs to quotes/proposals issued after sales engagement.

7. How many Marketing Qualified Leads (MQL) do you need?

The definition of a MQL is based on what marketing generates from a cold lead prospect.

Typically we work off a 3x times ratio for MQLs needed to generate enough SQLs – i.e. one in every three MQLs will progress to be accepted as a SQL.

8. How many lead prospects do you need?

In order to generate sufficient MQLs, we work off an average of 3x times leads and prospects to create and qualify MQLs through the nurturing and generation process during initial qualification.

This is normally generated from digital marketing metrics or event attendance metrics like web visitors, CPC, Google Adwords or forms submitted.

9. What is the cost of your marketing campaign needed?

By working through the sales and marketing alignment process, this will highlight how much marketing budget and investment is required to support your sales team and targets, and ultimately company revenue goals.

Summary

What period of time do you need to generate a return from marketing to sales?

We typically measure and report on a quarterly or monthly basis from a starting position of your annual target or financial year target.

Working through this process will either identify an alignment or misalignment between sales and marketing, in either, or both directions. sales-and-marketing-ROI

As an example, we worked with an IT industry client through this process, where we found there was at least a 50% gap in marketing investment to support their annual sales target of $1M – the BDM didn’t have the marketing support or budget needed to hit their sales target for the year.

This alignment process is helpful to demonstrate to executive management when planning out your sales and marketing strategies with goal setting. Working with, and to, the sales and marketing ROI required for writing the business case internally will help identify and justify whether to allocate towards either sales headcount or marketing activities.

 ROI = Sales Revenue/Profit Generated MINUS Cost of Marketing Investment DIVIDED by Cost of Marketing Investment X 100%

            An example:

Sales calculator ROI example

 

IBM Business Partner drives up lead generation conversion rate by 25%

 

Marketing-ROI

 

 

 

This well established leading IBM Business Partner in Australia requested our assistance late last year after launching an IBM marketing funded campaign. They requested our help to qualify their registered contacts generated from their current campaign with IBM which focused on Cloud Services.

There were about 400 Enterprise and Government sector leads delivered from the marketing campaign between IBM and the preferred marketing agency.

The Challenge

Our client used the vendor preferred marketing agency to run the survey campaign including the creative elements through advertising on a leading IT publication channel however the client felt it wasn’t as effective. The need from the client to follow up these cold leads resulted in Alchemise Consulting being asked if we could assist in working through the survey contacts that had been generated.

The list of 400 leads were segmented by the client according to which were better prospects to follow up with, and about 200 leads were discarded because they were not a good fit with the client’s solution.

There was only limited time to ensure the relevance of this campaign and follow up to provide a measured ROI report back to IBM.

Campaign Problem

Due to the timeframe of launching this campaign at the end of year, the IBM Business Partner used both cloud services and application campaign used the same digital campaign assets.

It was challenging to reach survey participants during the holiday period.

The client collateral available was insufficient to convert more leads as many prospects were expecting a relevant digital online presence. There were still at least over several warm lead opportunities available to be progressed further through the lead nurture process for prospective Enterprise and Government contacts.

Our Solution

Using our integrated inbound account based marketing and sales development approach with a limited timeframe available of 3 weeks, we set up a detailed data profiling exercise working only off 170 quality contact list and engaged with multiple touch points.

The depth of qualification was achieved with strategic and tactical knowledge of the subject matter and use of inbound marketing automation.

From the 170 contacts, a validation process found 115 valid registered leads which developed into 23 marketing qualified leads (MQL) which were developed further to 8 sales qualified leads (SQL).

contacts-by-lifecycle-stage

This was achieved based on our experience and lead generation structure to ensure we touched every high priority and low priority contact with a multi-channel approach. The data was loaded in the CRM and using marketing automation analytics helped tracked for lead activity capture to help us.

Outcome

We achieved 8 SQLs and 23 MQLs from only 170 lead contacts in one month.

The outcome represents an overall 25% conversion from MQL to SQL using our inbound marketing and outbound sales approach for handover to the sales team.

There are still several further qualified lead opportunities to still be nurtured before aiming to convert within the next 3 months.


If you are a technology vendor, consulting services, systems integrator or business partner in software, infrastructure or cloud services wanting a tangible ROI and a proven alternative way with marketing funding to accelerate your APAC sales we can assist.

Learn how to align, implement and measure sales outcomes with limited marketing spend for brand awareness, lead generation initiatives or events follow up, please contact Alchemise Consulting for an obligation free discussion on how we can help you deliver REAL results with a measurable Return on Investment.

digital-readiness-assessment


If you are interested in reading our recent marketing insights white paper, please click the link

” 5 Reasons Why Marketing Campaigns Fail

 

5 Reasons Why Marketing Campaigns Can Fail

As End of Quarter and End of Financial Year approaches again, perhaps you are thinking ahead to prepare yourself now for reporting season – and the questions that arise from EOFY trends and data from your marketing campaigns.

If you are a marketing manager now having to explain why the ROI on your recent marketing campaign has been so poor, or a business owner wondering why a marketing campaign hasn’t produced the expected tangible results, we’ve highlighted five key simple reasons as to why your marketing campaigns and efforts have underperformed or failed with expectations.

  1. Wrong target audience
    Is the audience you are targeting actually your target audience?

The aim of your marketing is to attract the audience – but if it is pitched at the wrong demographic, the message will be lost. For example, not many 35-40 year olds will be able to afford a $70K car when they have family commitments taking the financial priority.

  1. Trying to solve more than one problem
    Is your solution clearly addressing the pain points that your customers are feeling?

Using the above example, a customer looking to buy a car may have the problem of many cars being too expensive for them, or needing a reliable car that is not a lemon, or a larger car that can accommodate a growing family. Which is the most important to your buyer?

  1. Selling ice to the eskimos
    Are you trying to sell a product or solution that your customers already have?

This one is straight forward – if you are trying to sell a new car to a person that already has a new car, chances are that they will not be interested.

  1. Wrong communication channel
    Is your campaign even visible to your potential customers?

Know where and how to find your customers – don’t promote $15K hatchbacks at a $150K luxury car emporium… people simply won’t bother to look inside the hatchback.

  1. Wrong medium used to communicate your message
    Is your campaign presenting the message to your customer in the right format?

Are you using video format when you should be using white papers? The wrong medium can also sink the campaign before it starts.

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The lack of alignment between marketing and sales continues to be deeply problematic in so many companies, and taking action for the first steps to resolving this divide can provide vast improvements on marketing ROI and achieving sales targets.

For a more in-depth discussion around these areas of your marketing approach and how to take steps today to turn your failed or underperforming marketing campaigns around, just contact us below to discuss.

marketing-campaigns

If you would like to schedule a time to speak with us, please email us at info@alchemiseconsulting.com or contact us on +61 3 9225 5022.

 

3 Actions for Sales and Marketing Alignment in Financial Institutions

What actions to take with Sales and Marketing Alignment.

In any organization, sales and marketing are the two most important functions for the business to grow, especially in the competitive financial industry for Singapore financial institutions. Even if your company has an awesome product, it would need a capable marketing team to build its brand and create marketing collateral before the salespeople can sell them effectively.

In the ideal situation, sales and marketing should work hand in hand but this is not always the case. Previously, I pointed out the three benefits of sales and marketing alignment but the question of how to do it remains open. In this article, we will look at three different methods of aligning sales and marketing.

1. Content Alignment

In this information age, content is king. Once you get your content right, everything else will follow. Content starts from your company’s website to your brochure to your Facebook posts and YouTube videos. The key to content alignment begins when both sales and marketing come together to agree on a consistent message to be used across the company.

Content should be created to nurture prospects along the various stages of the sales funnel. There should be sufficient and relevant content for each stage and sales should understand the motivation of clients for reaching out to them. In the consideration stage, the materials would address a pain point and once sales know the pain points from the downloaded content, the sales representative would be more effective at selling their products.

sales-marketing-consulting

Source: OnePage CRM

Such alignment will also prevent overwhelming the sales person from leads that are not ready to buy so that they would be more effective and trust the leads given by marketing. Marketing can cultivate leads to the decision stage by disseminating content through marketing software and tracking their effectiveness.

After a period of time, both departments should also conduct a content audit. The departments should check what materials are being used by the sales representative, if there is sufficient content at each stage of the funnel and the actual materials used by sales when they face the prospect. For the finance industry, it is also important to ensure that all marketing materials clear compliance. This is to prevent any misleading information being disseminated.

2. Lead Scoring Framework

For sales and marketing to be aligned, they have to on the same page on the quality of the lead. Lead scoring looks at the digital body behavior of a lead and checks if it fits your company’s ideal customer profile. The hardest part is come up with the right criteria to gauge the prospect’s qualification and interest level.

For instance, if you are in the private banking space, qualified prospects should have at least $10 million of net worth and can put up $1 million worth of assets. Your ideal prospect would be between the age of 40 to 60, owns multiple businesses, have three children and are probably worried about wealth preservation. Such prospect would score highly in terms of qualification.

Then you look at their actual behaviour online. The prospect might end up downloading your white paper on the emerging market trends report, signs up for your seminar and visited your site three times in a week. All these are easily trackable with a decent CRM software and more points should be added for this prospect.

Buyers-journey

Source: CRM Search

For leads that are sales ready, marketing can qualify leads with grades of A, B, or C based on the points of the lead. There are external resources that can be used to enhance your scoring of these leads. Finally, there should be a review process to examine the effectiveness of these lead scoring.

3. Service Level Agreement (SLA)

To paraphrase Stephen Covey, one of the traits of an effective executive is to begin with the end in mind. The same principle applies for the setting of service level agreements. The end is clearly the sales quota and then we work backwards. Suppose one team of private bankers has a monthly sales quota of bringing in $1 million of new assets. Based on your existing marketing effort and sales funnel, marketing will qualify leads based on the lead scoring framework. Based on the activity of the lead, marketing would know the conversion rate and revenue which would be set on a table.

 

Sales and Marketing Alignment

Source: Slideshare

Marketing would then commit to deliver 10 leads who takes the initiative to contact sales (worth $110,000), 200 whitepaper leads (worth $320,000), 100 webinar leads (worth $300,000), 100 online demo leads (worth $300,000) in a month to support the $1 million sales target. The Marketing SLA can be any combination of Marketing Qualified Lead (MQL) for a sales cycle of 1 month.

The Sales SLA would be based on the optimal time needed to contact a lead before it goes cold based on past experience. For instance, if a lead were to contact sales directly, it might indicate that the lead requires urgent service. Sales would commit to a 30 minute response time and to contact all 10 leads within a day. For whitepaper leads, they are still taking their time to consider and sales can commit to a SLA of 1 day response time.

So it is up to marketing and sales to plan their activities such that they can commit to the agreed SLA. There should also be periodic review of the actual SLA being achieved and based it according to the actual sales closed.

The Ultimate Alignment

Great organizations do not happen by chance. It takes careful planning and implementation. The alignment of sales and marketing should form the core of your business plan and they should be updated constantly.

Content alignment, lead scoring framework and SLA are the main engines which will align both departments and with your customer’s demand and behaviour. Any organisation that aligns themselves with their customer will have sales follow naturally.

What’s Next

Now that you know of the importance of aligning both the sales and marketing processes, you will have to take action. In the next article, we will detail the framework to make that alignment possible. Stay tuned.

To find out more about how we can help take your business to the next level, please register below for an obligation free discussion and initial assessment.

Sales-Marketing-Consultant

How a CMO can create more marketing impact with a limited budget

 

As a CMO of a medium sized financial services company may have limited marketing budget and resources . After you have stood out from the competition, you will have to accept that unlike the larger companies; your marketing efforts have to be targeted and effective with lesser room for errors. One approach of creating such effective marketing strategy is to stand in the shoes of your client’s CFO.

1) Crafting The Right Message
A recent Oracle survey provided a powerful insight into the shifting role of the CFO. In today’s digital world, CFOs place priority in the capturing, measuring and reporting of company’s data in real time. For instance, for 76% of CFOs, customer satisfaction is their top business value priority but only 25% of them are able to capture measures of customer satisfaction effectively.

64% of CFOs put emphasis on the quality of their business process but only 33% have captured sufficient data on it. In such an environment, for your marketing materials to land with your client’s CFO who will be deciding on the facilities provider, it must emphasize the integration with their system (e.g. API), real time data analytics and your relationship with cutting edge technology.

In other words, the key message of your marketing materials would be to help them to identify future priorities and opportunities instead of looking at the rear view mirror. The shift in focus from strict expenditure control (‘bean counters’) to being forward looking reflects the changing customer preferences which financial institutions must grasp.

2) Client Preference For Direct Communication
This coincides with the HubSpot survey of salespeople which agreed that changing preferences is a sales disruptor. In particular, one of them wrote this:

“There’s a generational change away from personal service and direct communication fed by a growing preference for technology—not people.”

In today’s generation, marketing efforts would take the front side while salespeople would take a back seat in defining the sales revenue of a company. For customers, this is reflected in the related ranking of trusted information as presented in the chart below.

Channel-Sales

Source: HubSpot

Both business software and financial products are long term and weighty decisions to be undertaken by companies. In today’s environment, they are least likely to trust sales people compared to word-of-mouth, customer references and media articles. This means that the marketing strategy has to evolve into a multi channel approach to reach out to customers to build the sales momentum needed to break into the bigger playing leagues.

3) Team Work and Alignment
A targeted and effective marketing plan requires a process of discovery and detailed planning. Alchemise Consulting is the marketing expert in this field and we can help you to define a customized strategy to appeal to your target audience. For the financial sector, we recommend that the CMO and the CFO come to the table. The CMO can explain the organization’s target audience and the results of previous marketing campaigns.

Internally, Alchemise will also aid you to align your marketing and sales efforts. This has been the missing link in most companies which means that even the strongest marketing efforts go to waste. For instance, if your marketing effort results in a query in your webform, how long does it take for your sales people to contact them?

sales-marketing-consultant

Source: HubSpot 

Alchemise will provide the strategy and the CFO would contribute the viewpoints of his counterparts from the client’s side. Based on the CFO’s input, we will refine the plan further for your consideration. We will not rest until we have an effective marketing strategy for your organization that fits your goal and budget. This can be achieved starting with a monthly budget of S$25,000.

See The Results In 6 Months
Our senior consultants will form the working team with your CMO and CFO to reach out to your target audience effectively and avoid the pitfalls. You will see actual results after 6 months and pull ahead of your competition. This will be an investment that will be worth your time and money.

By: Ong Kai Kiat – Alchemise Consulting Content Specialist – Singapore

 

Sales and Marketing Consultant

Increasing your return on marketing investment for sales growth

“Want to increase your return on marketing investment? It’s All In Your Mind…”

Too many business people and marketers remained grounded in one-dimensional thinking habits. Marketing is a tool of the mind, and it’s in the mind where true wealth is made. Before this starts to sound like some kind of New Age lecture, let me give you an example of what I mean.

Let’s say you mail a sales letter to 50,000 people at an average cost of $1 each, for a total cost of $50,000 – That’s a fixed cost. If you get a poor response and only manage to break even then there is a strong tendency for you to give up and say: “Why should I spend $50,000 and go though all that work, only to break even?”

If by scientifically changing and testing a few characteristics of the mailing piece you are able to multiply the response by five, fifteen, fifty or even five hundred times then you are using leverage. The concept of A/B testing for digital marketing or trial and effort is part of the marketing lead generation strategy as an art and science.

How To Massively Boost Your Response…

The sales letter that broke even has the potential for almost infinite change. It’s highly likely that something in the sales letter can be improved to increase response. Often, simply using a stronger opening headline, or making a better offer in the body copy of the letter, a bonus, or trying a different price, can increase response dramatically.

By improving the content of the sales letter, and doing it successfully, you employ the leveraging action of marketing. You’re still sending a sales letter – but it’s not about the physical tool. It’s about the infinite possibilities impregnated in the marketing concept carried by that tool.

How To Never Run Out Of ‘Marketing Budget’

Other than available cash flow, there should be no such thing as a marketing budget. It is a ridiculous idea based on the assumption that marketing is a cost rather than a revenue generator, so the return on marketing investment should be seen a key indicator for sales growth.

Here’s why:

If an ad costs $1,000 and the revenue generated from the ad is $1,200, why would you stop the ad just because your budget dictated it? With a scientific approach and providing the cash is available, the marketing budget is unlimited. It is self-generating. Understanding this self-evident truth is the key to marketing leverage and massive business growth.

Your can never truly run out of ideas. In marketing, persistence almost always pays off. Marketing ROI can leverage a losing or a bland idea into something spectacular – if you have what it takes to make it happen. It’s all about thinking out of the box!

Alchemise Consulting is able to assist with “thinking out of the box” marketing campaigns and drive profit multipliers for stronger sales growth.

To learn how you can grow your sales with the 7 profit multiplier method, click here below to register for your FREE E-Book or our recent blog article

Feel free to comment, follow our Company Page if you liked this post or contact me to discuss any specific needs.  www.linkedin.com/company/alchemise-consulting

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How sales and marketing alignment can increase your revenue by 208%

Alchemise Consulting recently was interviewed by Thirst Creative on How Sales and Marketing alignment can increase your revenue by 208%.

‘The digital and online world has changed the way prospective buyers engage with your brand to be more personalised and direct. Hence the marketing funnel has deepened and so has most of the buying cycle before sales engage. Meaning sales now engage much later in the sales process.’ – Chak Ng, Managing Director of Alchemise Consulting

Please see the article writeup and also as a guest speaker at the “If you build it, will the come” event hosted by Thirst Creative here.

Sales and Marketing as a Service