Net New Deals v. Net New Logos
Company was already doing business with almost
everyone who mattered in the global aerospace industry, so classic “awareness” and “lead generation” were not significant issues. For this reason, most new leads were new deals from existing customers, not new logos.
Op Income Improvement
The company had been going to market in product siloes, often losing to smaller competitors while also failing to capitalize on portfolio strength.
Broader Portfolio Adoption
The company needed more customers to purchase more products from the portfolio. The very broad and deep portfolio had not been leveraged effectively, leading to stagnating share of customer wallet in many accounts.
Expense Focus as Cash Flow Driver
Strong cultural belief that sales velocity could not be pervasively improved, so often extreme cost containment was only lever to improve cash flow. Deal velocity ranged from many months to years. This was ascribed to a risk-averse and regulated industry, not factors that company could control or influence.
Marketing & Communications Challenges
Ungoverned $100M+ annual Marketing & Communications budget. Lots of instrumentation and data, but no strategy or framework for insight or effective strategy.
Lack of Market and Audience Focus
60 percent of Marketing & Communications people and budget were focused internally, effectively isolated from market knowledge
Functions Not Seen as Strategic Except in a Crisis
Marketing & Communications were “utilities” that had been taken for granted unless the company experienced an “outage”.
High Cost Increased Scrutiny
Large program investments like advertising and trade shows were not seen as paying off. Budgets and team size had continued to contract.
Deployment and Expansion
The Proof System was deployed, tested and proven in a two-year global deployment. During this time, the system continued to be improved and expanded based on ongoing feedback from 600+ Fortune 1000 business leaders, including the company’s CEO and CFO.
Results and ROI
The Proof System gave the company – for the first time – a clear view of computed marketing attribution and its “ripple effect” on key areas of business performance, and to make investment decisions on that basis.
The company repeatedly recognized the business contributions delivered by marketing and communications. By 2011, the marketing teams, including outside agencies and contractors, were compensated to a large degree based on the cause-and-effect relationships between their functional performance and business impact.
- Delivered First Portrait of Business Impact. Fully correlated historical marketing investments against historical outcomes, despite the lengthy time lag separating the Marketing “causes” from the business “effects.”
- Rebalanced Marketing Investment. Provided the basis for a rebalancing of the Marketing & Communications budget, including the reallocation of 55-60 percent of spend to more effective investments.
- Identified Point of Diminishing Returns. The Proof system indicated in Year 2 that Marketing & Communications were overfunded by 7 percent relative to incremental business value, prompting the release of those funds back to the company
- Drove Recognized Deal Expansion. Credited by the company with driving a 28 percent improvement in deal expansion through calibrated mid-stage campaigns focused on solutions to big customer problems. Over a 2-year period, 74 percent of existing customers began to purchase products from areas of the portfolio they had never purchased before.
- Delivered Unexpected Cash Flow Impact. Credited with pervasively improving longstanding sales velocity performance by almost 5 percent. This translated into an increase in the number of deals that the existing sales team could handle, dramatically reducing the unproductive sales compensation expense.
This company continues to license use of the Proof System today.
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