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Do you have a GPS for your marketing and sales spend?

see clear patterns between the investments you’ve made and subsequent success or failure

Recently, a survey of more than 400 Fortune 1000 C-suite leaders revealed deep anxiety over one question: how much to spend on marketing and how much on sales.

In many companies, resolving this debate has relied on general rules of thumb or the current norms in an industry. Many leaders seek the advice of peers or perhaps an agency. Still others rely on a bottoms-up, cost-based budgeting process that at least helps them feel better about the end result.

But what would it be like if you could make these decisions based on an understanding of cause and effect? What if you could see clear patterns between the investments you’ve made and subsequent success or failure?

Seeing Proof Analytics at work is a bit like using a GPS for the first time. You may have had a map before, but now you see precisely where you are, where you need to go, and the best way to get there by a certain time. And as you move, the GPS updates your position and makes new recommendations based on new factors that might slow you down or help you get there faster.

With that GPS in mind, let’s take a look at the biggest questions Proof Analytics can help you answer.

1. How do you balance the spend between sales and marketing?

The relationship between Sales and Marketing is one of the most important in any company. First and foremost, it’s #oneteam, not two. They share a common mission, and marketing’s job is to help sales sell more product to more customers, faster and more profitably, than sales could do by itself. Simply put, great marketing is a multiplier, a magnifier, and an accelerator on sales performance. It’s the grease on the wheel that drives more deals, bigger deals and faster deals.

At BMC Software, the right marketing meant that the Asia-Pacific sales team was able to take on more deals per rep than they ever had before. Not only did this lead to more income for the commissions-based sales team – it also reduced the total cost of sales because they no longer had to hire new, nontenured sales reps with big base salaries but few sales. The analytics confirmed that marketing and communications had pervasively improved individual sales quota performance across the entire team. The sales leader was so impressed then that he’s an investor in Proof today.

The typical logic has been that if you add 50% more salespeople, you will you grow sales by 50%. But that’s like saying if you exercise 50% more you will be 50% more fit – when we all know that even the best athletes (especially the best ones) reach a plateau after which more does not help. Knowing when to apply the marketing fuel to the sales engine is all about knowing where you are on the S-curve – and that is something Proof can show you.

Furthermore, what your CEO and CFO want to see is how marketing can increase the speed with which revenue comes into the company. So if you can prove that marketing helps sales improve their average time to close as a direct correlated result, you will no longer have a problem asking for a bigger budget.

2. Which marketing categories should you increase, decrease, add or remove?

Today, many marketing teams allocate their budgets based on the cost of different marketing deliverables. In doing so, many also seek to cost-optimize their KPIs, which is impossible unless you know their business value. Recently, a CFO asked a CMO, “what is the business value of this metric? What is its downstream effect on our business?” He could not answer. The CFO said, “the fact that you’ve driven the cost of this down and down is interesting, but if this doesn’t drive business value, the investment you’re making is literally worthless.”

With Proof, that conversation would have been completely different, enabling the CMO and CFO to understand what marketing categories needed more investment and which could be cut back or removed altogether.

Another thing that Proof has shown our customers is that marketing teams tend to over-spend on the top-of-the-funnel and under-spend on the middle and the bottom. They also can miss the real value of their investments.

PR is a great example – most marketers think of PR as just another top-of-the-funnel awareness generator. It does deliver that impact, but the analytics show that PR’s greatest effect on customers and deal flow is expanding deal size in the middle of the funnel and accelerating velocity at the bottom. In many companies, PR and similar disciplines are without equal in their ability to help drive bigger deals and faster deals.

3. How do your marketing and sales activities contribute to revenue, profit, and cash flow?

Many surveys indicate that CEOs expect to increase their investment in marketing in the coming year. Most understand that marketing benefits their companies, but most of those say they still don’t understand how or how much they should be spending to get those benefits. That’s not surprising, because according to Gartner’s 2018-19 Spend Survey, “many CMOs still gravitate toward metrics that have little meaning outside the marketing organization.”

Bob Beauchamp was a legendary software CEO who now serves on the boards of companies like Raytheon. Not long ago, he wrote this article in the Holmes Report, in which he identified marketing and PR’s inability to prove their sales impact and business value is the #1 reason why many Fortune 1000 companies fire their CMOs so frequently. The article also suggests that this is why so few CMOs sit on company boards.

This ability to prove marketing’s business impact is why CFOs and CEOs love Proof. If you’re a marketing and sales leader who constantly wants to prove and improve, your value, increase your budget and have a seat at the table, you will love it too.

The most important question you can ask Proof

Great analytics shouldn’t just provide answers — they should take you on a journey toward even better questions. At Proof we say that the most powerful question you can ask is, “I wonder what would happen if…”

That could mean, “I wonder what would happen if we asked Suzy for her data and put it into the analytics mix?” Or it could mean, “I wonder what would happen if we changed our investment in this channel? What would be the short-, medium- and long-term effects of that change?”

Once you understand the relationship between audience impact and its business value, you can start to hypothesize. This is how analytics empowers creativity. Because creativity is all about the question: “I wonder what would happen if?”

What would you ask?

Christopher Engman, lead investor, CMO/CRO Proof Analytics